Cassava CEO, 'dazed and confused,' takes to biotech defense handbook by blaming short sellers for woes

The Cassava saga continues as chief Remi Barbier has come out, guns blazing, against accusations that the biotech may have deliberately misdirected investors on a recent Alzheimer’s disease readout.

Last month, a citizen petition filed with the FDA questioned the scientific integrity of the company's clinical trials for the Alzheimer’s drug simufilam and asked the agency to put them on hold.

The whistleblower petition detailed “grave concerns about the quality and integrity of the laboratory-based studies surrounding this drug candidate and supporting the claims for its efficacy.”

While the data in the petition came from publicly available information, the whistleblower is not named, and the document is signed by lawyer Jordan Thomas from Labaton Sucharow on behalf of his clients.

RELATED: Lab named by Cassava to back up Alzheimer's data says it wasn't involved, sending biotech's shares into freefall again

Cassava came out against the petition with a "true and false" piece, trying to defend against the allegations. Quanterix, a digital health company focused on digitizing biomarker analysis, was one of the central parts Cassava cited in the rebuttal (PDF).

Last week, however, the lab company denied involvement in preparing some of the data in question, leading to deeper pressure on Cassava.

In the last few weeks since the petition came out, around $2 billion of value has been wiped off the company, Barbier said. Hence another rebuttal.

“Let me be very clear: I think these allegations are false. The allegations claim our science is improbable, unexpected and unique to Cassava Sciences, and therefore it’s all an elaborate fraud," Barbier said in an audio and written statement (PDF). "By these criteria, all drug innovations are fraudulent. We intend to vigorously defend ourselves and our stakeholders against false and misleading allegations.”

He also alleged, as many biotech CEOs under attack often do, that a company or organization with a short position in the biotech is to blame. Labaton Sucharow did disclose in a follow up response to the petition that the clients the firm is representing have short positions in Cassava. 

“When I first read the allegations, I felt dazed and confused […] But I think what we're currently seeing is no ordinary short seller betting our data will disappoint," Barbier said. "To me, the short attack against Cassava Sciences feels unprecedented in its boldness, its scope, its immediacy and its intensity. It feels highly organized and well-funded. It feels like whoever is behind this effort wants to make a lot of money quickly, at the expense of our science.”

RELATED: Cassava defends Alzheimer's science after citizen petition raises 'grave concerns' about clinical studies

Cassava is developing simufilam as a different approach to treating Alzheimer’s disease. The therapy does not try to clear amyloid from the brain, which many competing drugs aim for, but instead tries to stabilize a scaffolding protein called filamin A.

The biotech recently reached an agreement with the FDA to conduct a phase 3 trial. The petition asserts that the link between filamin A and Alzheimer's has not been established. 

Barbier's dramatic language appears to have had the desired affect; shares were up 9% to around $59 premarket Friday.