By Mackenzie Tatananni

Cassava Sciences stock collapsed after an Alzheimer's drug the company was testing failed to significantly help participants in a clinical trial.

The stock plummeted 84% to $4.15 Monday after reporting that a Phase 3 trial meant to demonstrate the efficacy of a medication called Simufilam fell short of key milestones.

The treatment didn't show a significant reduction in cognitive or functional decline compared with a placebo during the 52nd week of the study, Cassava Sciences reported. All patients included in the trial suffer from mild to moderate Alzheimer's.

The drug's efficacy was gauged using scales that measure a patient's ability to perform a set of tasks. Cassava Sciences pledged to present "detailed study results" at a coming meeting and noted that Simufilam continues to show an overall favorable safety profile.

CEO Rick Barry conceded that the results were "disappointing" for patients living with the disease as well as physicians who have been searching for new treatment options.

"We took careful measures to enroll patients with mild-to-moderate AD," Barry said in a news release. "Despite that, the loss of cognition in the placebo group was less pronounced than was previously reported in other placebo-controlled studies in AD. We are working to understand this better."

The fall in the stock, the biggest percentage decline on record, left it on track for its lowest close since 2020, according to Dow Jones Market Data.

Shares of the Texas-based biotech stock have dropped 82% over the past year, putting the company on pace for its worst year on record.

CFO Eric Schoen said Cassava Sciences is "well-capitalized" with around $149 million in cash and cash equivalents as of the end of its third quarter, the three months through September.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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November 25, 2024 10:06 ET (15:06 GMT)

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