Cassava Sciences (SAVA) Resolves SEC Investigation

Cassava Sciences, Inc. (Nasdaq: SAVA), a biotechnology company focused on Alzheimer’s disease, today announced that it has reached a settlement with the U.S. Securities and Exchange Commission (“SEC”) of negligence-based disclosure charges that resolve a previously-disclosed SEC investigation into statements made by the Company pertaining to the results of its 2020 Phase 2b clinical trial of simufilam and related matters. Two former senior employees of the Company also settled negligence-based disclosure charges brought by the SEC.

Cassava, without admitting or denying the SEC’s allegations, agreed to pay a monetary penalty of $40 million. The Company cooperated fully with the SEC’s investigation and has implemented remedial measures.

In connection with the previously-disclosed investigation by the Department of Justice (“DOJ”), the Company does not currently anticipate that DOJ’s Criminal Division will bring charges against or seek a resolution with the Company.

On July 17, 2024, Cassava announced the appointment of Richard (Rick) Barry as Executive Chairman of the Board as well as a series of actions designed to enhance corporate governance, transparency, and accountability, consistent with the Company’s commitment to the highest ethical business practices. Mr. Barry became Chief Executive Officer of Cassava on September 6, 2024.

“We would like to thank the staff of the Division of Enforcement for its professionalism and its engagement with the Company, which enabled the Board to conduct its own internal investigation and to take decisive action,” said Mr. Barry.

“Cassava is pleased to put this matter behind us,” Mr. Barry said. “We can now focus all of our attention on completion of the ongoing Phase 3 trials of simufilam. While no one can accurately predict the future, we remain hopeful that the trials will be successful and that, after a rigorous FDA review, simufilam could become available to help those suffering from Alzheimer’s disease.”

As previously announced, Cassava’s net cash use in operations for the second half of 2024 is expected to be $80 to $90 million, which includes the $40 million monetary penalty related to this resolution. The Company maintains its estimate that cash at year-end 2024 will be in a range of $117 to $127 million.

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