SAVA

Cassava Sciences ($SAVA) President Buys $524K in Stock After 90% Crash...New Indication Discovery Signals Turnaround?

09/22/2025 20:14

Cassava Sciences ($SAVA) President Richard Barry executed substantial share purchases totaling approximately 240,000 shares worth $524,000 on September 18-19, sending a powerful signal of confidence after the stock's devastating 90% decline from its peaks. Cassava Sciences is a clinical-stage biotechnology company headquartered in Austin, Texas, focused on developing novel therapeutics for neurodegenerative diseases. The company gained attention for its innovative approach targeting brain protein filamin A (FLNA) stabilization, but has faced significant challenges following the failure of its lead Alzheimer's drug simufilam in late-stage trials and ongoing SEC investigations. Barry's purchases were executed under a Rule 10b5-1 trading plan, demonstrating transparency and indicating the trades were not based on material inside information. The average price of approximately $2.20 per share, close to the then-current stock price of $2.08, suggests management views the current valuation as significantly undervalued. Notably, this buying coincides with what could be a pivotal moment for the company. On August 4, Cassava announced positive preclinical results for simufilam in tuberous sclerosis complex (TSC)-related epilepsy, marking a potential new therapeutic pathway. The company expects to initiate clinical studies for TSC epilepsy in the first half of 2026, offering hope that the drug that failed in Alzheimer's might find success in other neurological conditions. This represents a completely new growth vector for the beleaguered company. The stock's journey has been nothing short of dramatic. From $22 in June 2024, shares plummeted to current levels around $2.08, representing a catastrophic decline. The most shocking drop occurred in late November 2024, when shares crashed 87% in a single day from $32 to $4 following clinical trial failures and regulatory concerns. However, the stock has shown signs of stabilization in recent months. Despite operational challenges, Cassava maintains surprisingly strong financial health. The company holds approximately $112 million in cash with zero debt, providing a clean balance sheet structure. With a current ratio of 2.43, short-term liquidity appears adequate. While the company reports annual net losses of around $120 million, current cash reserves should sustain operations for the foreseeable future. Positive indicators for investors include management stabilization following leadership changes, the discovery of new therapeutic applications, and most importantly, the CEO's substantial share purchases. When insiders commit this level of capital, it typically signals confidence in significant upside potential from current price levels. However, risk factors remain substantial. Ongoing legal proceedings, the potential complete discontinuation of the Alzheimer's program, and uncertainty surrounding new indication development create considerable volatility. Additionally, future capital raises could dilute existing shareholders if required under unfavorable market conditions. Scenario analysis suggests multiple pathways forward. In an optimistic case, positive TSC epilepsy clinical results could expand into other neurological conditions, potentially driving shares back above $10. The base case anticipates continued trading around current levels while awaiting clinical milestones. In a downside scenario, failure in TSC trials or additional legal complications could push shares below $1. Cassava Sciences stands at a clear inflection point. While the CEO's strong buying signal and new indication discovery provide compelling upside arguments, the company's troubled history and ongoing uncertainties remain significant concerns. This presents an intriguing opportunity for risk-tolerant investors, but may still be too volatile for those seeking stability.