H.C. Wainwright downgraded Cassava Sciences to Neutral from Buy without a price target. A federal grand jury in the District of Maryland returned an indictment on June 27, charging Hoau-Yan Wang, for allegedly defrauding the National Institutes of Health of approximately $16M in federal grant funds, the analyst tells investors in a research note. Dr. Wang was formerly a Cassava Sciences scientific advisor, the firm points out. “The matter that is inescapable is that Dr. Wang has been formally charged with false statements and fraud related to Phase 1 and Phase 2 study results used as evidence to support simufilam’s advancement into late-stage clinical testing,” according to H.C. Wainwright. It believes this controversy “could be a significant long-term challenge to realizing upside” in Cassava shares. It believes the stock could be range-bound between $10 and $15 per until the top-line readout from the 52-week RETHINK-ALZ Phase 3 study, which is not expected until year-end 2024.
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