Shares of Cassava Sciences (NASDAQ: SAVA) rocketed higher last week in response to compelling results from a clinical trial with sumifilam, an experimental treatment for Alzheimer's patients. This disease affects roughly one in 10 adults over 65, and there still aren't any effective treatment options that curtail its progression.
Recently released results from a midstage clinical trial with mild to moderate stage Alzheimer's disease (AD) patients are compelling, but we've been here before. Here's what investors should know about sumifilam, the potential new AD drug from Cassava Sciences, and potential pitfalls the company's peers have stumbled into before.
A big opportunity
There still aren't any available treatments that curtail progressive mental deterioration brought on by the disease. In the past decade, we've seen AD candidates from Pfizer, Roche, Eli Lilly, and Biogen (NASDAQ: BIIB) exhibit signs of efficacy in early stage clinical trials only to disappoint in larger and exponentially more expensive phase 3 trials.
While there aren't available AD treatments at the moment, there could be one before the end of the year. The FDA is currently reviewing a controversial application from Biogen for its AD candidate, aducanumab.
There's a chance the FDA will decide that the hazy benefit Biogen reported outweighs clear health risks seen among patients who received regular infusions of aducanumab. In a far more likely scenario, there will still be an enormous unmet need for effective AD drugs years from now when Cassava's ready to present phase 3 results for its AD candidate.
Ready for the next phase
Sumiflam's a first-in-class small-molecule drug that's designed to fix misfunctioning filamin A, a scaffolding protein associated with higher concentrations of protein fragments that form plaques in the brains of AD patients. Successful results from phase 2 suggest it works as expected.
In a randomized controlled phase 2 trial, investigators split 64 patients with mild-to-moderate AD into three groups, two that received pills containing 50 milligrams or 100 milligrams of sumifilam twice daily and a third that received a placebo.
After 28 days of treatment, researchers examined samples of the fluid that was bathing their brains and spinal cords for signs of tau, amyloid-beta, and several other biomarkers associated with AD and other forms of dementia. Across all biomarkers measured, patients in the sumifilam groups showed reductions that were significantly lower than the placebo group.
What really matters
Biomarker reductions are all fine and good, but the FDA wants to see proof that a drug can improve outcomes before approving it to treat millions of relatively healthy people. Patients treated with sumifilam tested higher when asked to remember new information, but the difference wasn't strong enough to be considered statistically significant. Remember, this was a small study, funded by the National Institutes of Health, that enrolled just 64 patients and observed them after only four weeks of treatment.
The cognitive symptoms associated with Alzheimer's disease progress so slowly that we can't realistically expect measurable cognitive benefits after just 28 days. The results Cassava reported in this NIH sponsored phase 2 trial, though, suggest sumifilam's doing something right.
What's next for sumifilam
If a sumifilam can repeat it's recent success in a larger study designed to measure long term cognitive benefits, it could eventually become the top-selling drug of its time. Anyone considering an investment in Cassava, though, needs to understand there's still a long road ahead.
In a nutshell, Cassava Sciences isn't equipped to run a pivotal AD trial with thousands of patients and dozens of study locations. At the end of June, the company had just $25 million in cash, no reliable sources of revenue, and hardly enough employees to fill a small conference room.
One way or another, Cassava's going to need capital to run a phase 3 study with sumifilam. This could come in the form of a collaboration agreement with a larger pharmaceutical company or a complete buyout offer. At the moment, the company sports an extremely modest $251 million market cap that puts the company well within reach of dozens of potential suitors.
Investors should know that sumifilam was Cassava's last hope just a couple of years ago, when the company was still called Pain Therapeutics. You may remember, Pain Therapeutics shifted gears in 2018 after receiving multiple rejections from the FDA for Remoxy ER, an abuse-deterrent opioid.
The data we've seen so far from sumifilam clearly warrants further study, but Cassava's still run by Remi Barber, the same CEO who spent years convincing shareholders Remoxy ER was a good bet. If you're going to take a chance on Cassava Sciences stock, don't risk anything you can't afford to lose.
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