The results of 9 months treatment with Sumafilam reported 29 July were exactly what I had hoped for; namely continued improvement over baseline and over the 3 and 6 month interim results. Yet the stock tanked that day, and has come back about 50% from the low. It’s the old sick joke, the operation was a success but the patient was a failure.
I had a few guesses as to what happened in a post I wrote 30 July
” In the past few months, all companies with drugs for Alzheimer’s disease have been fluctuating in price together, and one of them (to remain nameless to protect the innocent) had the temerity to release a 25 day study today on their drug based on 14 patients. The stock was down 60%.
So Cassava got tarred with this brush.
Another likely reason is that the rise in Cassava was fueled by very small investors. If you watched the transactions on a day SAVA was soaring, the purchases were rarely over 200. So many of them were likely buying because others were. So they sold when others were. Lemmings anyone?”
My guesses were totally wrong. What actually happened was a very well timed and very well coordinated bear attack on the price of the stock.
As Lindsay Burns was presenting positive data the morning of July 29th, an article run by a guy with a political science degree attacked her data, using 3 neurologists, all developing other drugs for Alzheimer’s disease. At the same time some 200 Million dollars worth of sell orders were placed (likely by several hedge funds). The stock tanked.
Reality has subsequently intruded, as SAVA’s stock has rebounded 50% from the attack.
So what should Cassava do at this point? Assume, as time passes, that patients continue improve or remain stable (as they already have for 9 months). Within the next 3 months, and possibly sooner, SAVA will have 1 year results. If patient cognition continues to show improvement (over 9 months, over baseline), game over. No one taking care of an Alzheimer patient has ever seen them better off cognitively after a year has passed. .
The bears should not be forewarned as they have been. The 12 month results should released without warning, early in the week, so the bears don’t have the weekend to respond. It would be an interesting short squeeze.
