Cassava implies 'short-sellers' to blame for leaking CUNY report alleging scientific misconduct

Cassava Sciences is leaning on a classic villain to parry away a fresh wave of criticism, blaming short-sellers for leaking a report that alleges scientific misconduct behind the company’s Alzheimer’s drug. 

The investigative report by the City University of New York (CUNY) into Hoau-Yan Wang, Ph.D., an associate professor at the university's school of medicine, was obtained by the journal Science, which published a story Thursday afternoon. The report contends that there’s “highly suggestive” evidence that Wang, who has collaborated with Cassava in the past, deliberately twisted scientific findings on 14 of 31 allegations.

The allegations center on Wang altering or manipulating western blot images “thereby presenting falsified or fabricated biochemical data,” according to the report. 

Those data have been used to identify elevated filamin A as a target in the brain with therapeutic potential for conditions like Alzheimer’s or opioid dependence. And Cassava’s lead asset, simufilam, has been the byproduct of this research. Red flags have been raised about the drug and this research over the years as the company chased regulatory approval. 

Cassava's response yesterday did little to address the underlying theme of the report, which is that Wang failed to corroborate the research in question with original blot images. According to the report, Wang has argued that the university’s definition of original blot data is “unreasonably strict." In its own statement this morning, Cassava said the report really centers on how Wang stored data. 

Rather than countering the specific details of the report, Cassava took aim at short-sellers, who have been a consistent target of the company’s wrath.

“The Science article quotes a person paid by a lawyer for certain short-sellers, but does not indicate what role, if any, short-sellers had in the leak," Cassava said.

According to Science, CUNY completed its investigation in May 2023. The short interest in Cassava Sciences’ stock jumped 40%, to over 14 million shares, between June 30, 2023, and September 29, 2023, the company said, pointing to Nasdaq data.

Cassava’s grievance dates back roughly two years when a petition filed to the FDA from a whistleblower questioned the integrity of the company’s clinical trials for simufilam. The whistleblower wasn’t named, but the law firm representing them disclosed that they did have a short position in the company’s shares.

Cassava CEO Remi Barbier said at the time that “the short attack against Cassava Sciences feels unprecedented in its boldness, its scope, its immediacy and its intensity.”

The biotech’s shares were down more than 21% shortly after the market opened on Friday, to $13.80 from a Thursday closing price of  $17.54.