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This article is a counter opinion to Stat News article on 10/2/20 with the headline, "Failure has paid handsomely for Cassava Sciences’ CEO. His latest cash grab is a risky Alzheimer’s drug".
This article is unidimensional in my view. The fact that the CEO made money while the company tried hard for several years and failed in later stages of FDA approval process for an abuse deterrent drug, is overblown. So, is the fact the CEO and senior management stand to gain if the company’s market cap is higher than a pre-specified threshold; for certain number of consecutive days. I would like to offer an alternative analysis of the company’s prospects: Consider this: Based on current limited testing in Phase 2a (single arm, 13 patients) and Phase 2b (double blinded, randomized placebo controlled trail, 64 patients), Cassava's product Sumifilam (formerly, PTI-125) has shown remarkable results in patients with mild to moderate Alzheimer's disease (AD): biomarkers for AD pathology, neurodegeneration and neuroinflammation have improved in all these studies. No other AD drug has shown improvement in a broad spectrum of AD disease biomarkers, like sumifilam has. Most of the companies developing AD drugs took the approach of reducing amyloid plaque in the brain; or some variation of that approach. Cassava’s is a totally unique approach in that its molecule, sumifilam, binds to altered FLNA protein; corrects the protepoathy of FLNA; which in turn corrects the downstream effects that contribute to AD. The fact that earlier Phase 2b results were a failure and the revised ones are a success are easily explainable: In the earlier study; the results were deemed bogus because of several factors which indicate flawed testing (not a flawed trial): there was huge variability of biomarkers in patients on placebo; related biomarkers moving in opposite directions; and related biomarkers having no (or very little) correlation. The new results from a different (blinded) lab don’t have any of those issues and are deemed to be correct. If the Phase 3 studies are successful, this could be a blockbuster drug and could reward investors handsomely. Of course, the following risk factors remain, which potential investors should be cognizant of:
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Manish JThis page is to document my day to day thoughts on Investing in stocks. Archives
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