phil0862
Brief SAVA Investment Thesis
Updated: Dec 22, 2021
A helpful part of being long SAVA is that the outcome is not dependent on current share price, or sentiment. It's just approval of the drug. A pure value play based on future cash flow.
Cassava Sciences has an experimental Alzheimer’s drug Simufilam in Phase 3
Only drug to ever show cognitive improvement in patients
Features:
Convenient oral drug taken twice daily
Excellent safety in Phase 2 study
Analyst estimates drug to cost $26k per patient per year
Also working on a blood test that detects and tracks Alzheimer’s disease called SavaDX. It may detect the disease up to a decade before patient has clinical signs of the disease, thereby identifying more candidates to take their drug
$2 billion market cap trying to solve a $1 trillion dollar problem. Stock market priced in 1-2% chance of success, however there is already much clinical data that this drug already works
Unusual hatred by hedge funds shorting this stock, aggressively alleging fraud (via Citizen’s Petition) and actively trying to stop the Phase 3 trials. The writer of the hit piece is David Bredt, is short seller and affiliated with a direct competitor.
Investors should read the other side's allegations before investing, lest panic selling after the same old arguments are repeated
Near term catalysts include:
new 12 month data
12 month biomarker data
clearance of fraud allegations by journals
rejection of the Citizen’s Petition by the FDA
Breakthrough Designation Therapy by FDA
results from double-blinded 6 month CMS trial (may hint at outcome of Phase 3 trials)
Two Phase 3 trials have started. The first is 12 months and the second is 18 months long. However with BTD, the drug can be approved once it reaches the primary endpoint. Estimation of Phase 3 readout Mid-2022 to Early-2023. Official FDA approval takes 6 months (Mid 2023).
Links:
Intro to SAVA's cognition data
Bullish article by a physician treating Alzheimer patients