Investors didn’t like the latest update from the Alzheimer’s drug maker Cassava Sciences (NASDAQ: SAVA). After showing great results from the first 50 patients treated with simufilam, the company’s Alzheimer’s drug candidate in an open-label, mid-stage study, results from the 200+ patients weren’t as good.
Patients were given 2 100 mg tablets per day for an average of one year, and they showed only a minimal change in the ADAS-Cog score. In Alzheimer’s disease clinical research, this is the cognitive scale used to measure effectiveness.
At one year, 47% of patients had an improvement of 4.7 points, while 23% had a drop of less than 5 points with an average drop of 2.5 points.
However, when the company reported results from the original 50 patients in September 2021, on the same scale, 68% showed improvement – or 6.8 points.
The company said that in this patient population, a minimal change or improvement over the one-year period equates to a “highly desirable outcome.” Investors apparently disagreed with that assessment and sent shares down 24% in subsequent sessions.
That said, comparing the results to Eli Lilly’s Alzheimer’s treatment, Jones Trading analyst Soumit Roy finds plenty to be encouraged about.
“We continue to see modestly better performance with Cassava’s simufilam vs. Lilly’s donanemab in the mild to moderate patient population… We would expect the base case to be Cassava’s simufilam marginally outperforming LLY’s donanemab , which we consider a big win considering LLY’s donanemab could be the only drug approved in the near term (front-line Phase 3 data in 2Q23) in mild to moderate patients and increasing the rarity factor for simufilam” , Roy said.
Indeed, Roy is very much on the bullish side of the spectrum here. along with a Buy rating, the analyst gives SAVA shares a $100 price target, suggesting the stock is undervalued by a whopping 264%. (To watch Roy’s story, click here)
Only two other analysts are tracking Cassava’s progress, with one staying on the sidelines and the other joining Roy in the bull camp, making the consensus view here a moderate buy. Still, everyone believes the stock has room to grow. the average target of $89.33 implies a one-year upside of 203% for the stock. (I see SAVA Stock Forecast)
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Disclaimer: The views expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.