SAVA

Cassava Sciences ($SAVA) CEO Invests $540K Personal Funds in 240K Shares...Signals Confidence in TSC Epilepsy Treatment Pivot

09/23/2025 20:11

Cassava Sciences ($SAVA) CEO Richard Barry sent a powerful signal to the biotech industry by investing $540,000 of his personal funds to purchase over 240,000 shares in mid-September. This unusual move comes as the stock has plummeted over 90% following consecutive clinical failures of Alzheimer's drug simufilam. Cassava Sciences is a clinical-stage biotechnology company founded in 1998 and headquartered in Austin, Texas, specializing in treatments for Alzheimer's disease and neurodegenerative disorders. Its lead candidate simufilam, an oral therapy targeting brain protein filamin A (FLNA) stabilization, garnered attention for its novel mechanism of action but faced development termination after failed Phase 3 trials in 2024 and 2025. The company's credibility hit rock bottom following fraud charges against a linked research professor for data manipulation and a $40 million SEC settlement. Yet CEO Barry executed three separate purchases from September 18-22, buying shares at $2.19-$2.28 per share. Particularly notable was his September 18 acquisition of over 190,000 shares in a single transaction, demonstrating strong management conviction beyond symbolic investment. This represents a substantial portion of the CEO's personal wealth being wagered on the company's future. The backdrop for the CEO's purchases lies in the new business pivot announced in August. The company declared it would repurpose simufilam, which failed in Alzheimer's, for treating tuberous sclerosis complex (TSC)-related epilepsy. TSC is a rare disease with limited existing treatment options, presenting lower market entry barriers and potential FDA orphan drug designation benefits. With clinical trials planned for first half 2026, results could be confirmed relatively quickly. Financially, Cassava Sciences occupies a unique position. With a market capitalization of approximately $171 million and cash reserves of $112 million, the company maintains virtually no debt, resulting in negative enterprise value. This means investors can effectively purchase the company at a discount to its cash value. For a biotech firm, this represents an exceptionally stable financial structure, enabling focused drug development without near-term funding pressures. Stock-wise, shares began 2024 at $22 before plunging in November, subsequently trading in a $2-3 range. Following the March 2025 simufilam failure announcement, the stock hit a low of $1.50 before recovering to the mid-$2 range alongside the TSC epilepsy treatment announcement. The CEO's purchase range of $2.19-$2.28 represents about 90% above 52-week lows but still over 90% below 52-week highs. From an investor perspective, the timing of the CEO's purchases is noteworthy. Rather than buying immediately after the TSC epilepsy treatment announcement, he waited over a month for the market to digest the news, suggesting genuine value investing rather than market stabilization. Moreover, continuing purchases over three consecutive days despite price appreciation demonstrates strong conviction in current valuation levels. However, risk factors cannot be ignored. The trauma from Alzheimer's drug development failure hasn't fully subsided, and the new TSC epilepsy treatment remains in early stages with uncertain success prospects. Recovery from past data manipulation allegations and SEC sanctions is still needed. As a small biotech, stock volatility based on clinical results will likely remain extreme. Three key scenarios warrant attention going forward. In the optimistic scenario, TSC epilepsy treatment development proceeds smoothly, yielding positive 2026 clinical trial results with rapid approval through orphan drug designation, potentially driving shares several multiples higher. The base case involves TSC development progressing but requiring time for confirmation, with potential additional funding needs as cash depletes. The negative scenario sees TSC clinical failure or additional legal issues raising questions about business viability. Currently, the CEO's substantial purchases appear to signal genuine value discovery beyond mere gesturing. Particularly given the undervaluation relative to cash value and potential for successful pivot to new indications, this may represent an opportunity worth considering for investors who can tolerate high-risk, high-reward investments. However, significant volatility should be expected until TSC clinical trials begin in first half 2026 and initial results emerge.