CASSAVA SCIENCES INC
For the period ended Jun 30, 2024. Filed Aug 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 8, 2024
FLNA$0.45+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-10.
0001437749-24-016040
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001437749-24-025611
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 211 previous paragraphs and 230 current paragraphs.
158 unchanged; 40 reworded; 30 added; 11 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 39 previous and 37 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
Phase 3 data and samples for bioanalysis will be directly provided to and analyzed by independent, third-party commercial consulting firms.
Current report
Business Update
Current report
Indictment of Dr. Hoau-Yan Wang
Current report
On June 28, 2024, the DOJ announced that a federal grand jury in the U.S. District Court for the District of Maryland returned an indictment of Dr. Wang. The indictment alleges that Dr. Wang caused Cassava to submit grant applications to the U.S. National Institutes of Health (“NIH”) that contained false and fraudulent representations about his research. Among other things, the indictment alleges that Dr. Wang made materially false, fraudulent, and misleading statements to NIH regarding the mechanism by which the Company’s therapeutic product candidate, simufilam, was designed to treat Alzheimer’s disease and the improvement of certain Alzheimer’s disease indicators in patients treated with simufilam, and that Dr. Wang manipulated or otherwise fabricated research results, including Western Blot images that he prepared.
Current report
Dr. Wang, who is employed as a professor at the School of Medicine of the City University of New York (“CUNY”), previously served as a scientific collaborator and advisor to Cassava. Dr. Wang’s research, including foundational research published together with Dr. Lindsay Burns, Cassava’s former SVP, Neuroscience, led to the discovery of simufilam. Among other work for Cassava, Dr. Wang’s laboratory at CUNY conducted the final bioanalysis for the Phase 2b Study, which the Company reported as part of the final results of the Phase 2b Study.
Current report
Dr. Wang received compensation from the Company for his consulting and advisory work for Cassava. For over a decade until Cassava’s termination of its consulting relationship with him, Dr. Wang was paid a cash stipend of $2,000 per month. He has also been awarded stock options pursuant to the Company’s equity incentive plans, none of which have been exercised through August 5, 2024. As of August 5, 2024, Dr. Wang held 18,571 stock options, all of which were granted between 2015 and 2019 and are fully vested, with a weighted average exercise price of $4.22 per share. Dr. Wang was previously a participant in the Company’s CIB Plan, during which time the Company achieved target valuation milestones that established aggregate bonus payment amounts. The determination whether to award such amounts to participants and, if so, the allocation of amounts among participants (other than the Company’s chief executive officer), has not yet occurred and remains subject to the discretion of the Compensation Committee of the Board. In all cases, the payment of cash bonuses under the CIB Plan is subject to (i) Cassava’s completion of a merger transaction or (2) the determination by the Compensation Committee of the Board that the Company has sufficient cash on hand to render such payment, neither of which may ever occur. To date, Dr. Wang has not been allocated any cash bonus award pursuant to the CIB Plan. The Company has not paid any cash bonus to Dr. Wang or to any other participant under the CIB Plan as of this Quarterly Report on Form 10-Q. Prior to Dr. Wang’s indictment, the Company terminated its consulting relationship with him, and the Board removed him as a participant in the CIB Plan.
Current report
Neither Dr. Wang nor his laboratory at CUNY has had any involvement at any time in the Company’s ongoing Phase 3 clinical trials of simufilam.
Current report
Lawsuit Against Perpetrators of“Short and Distort”* Campaign*
Current report
On November 3, 2022, we announced that we had filed a lawsuit in federal district court for the Southern District of New York against certain individuals who executed a “short and distort” campaign against Cassava Sciences. On March 29, 2024, the court dismissed our complaint, but provided leave for the Company to file an amended complaint against certain defendants whom the Court found had published defamatory statements about the Company. The Company filed its Second Amended Complaint against these defendants on April 29, 2024. On August 2, 2024, the Company voluntarily dismissed its claims against the defendants named in the Second Amended Complaint without prejudice.
Current report
Leadership Updates
Current report
Appointment of Executive Chairman of the Board of Directors
Current report
On July 15, 2024, Richard J. Barry, an independent director, was appointed by the Board as its Executive Chairman. Mr. Barry will serve as the Company’s principal executive officer until a permanent Chief Executive Officer is identified.
Current report
Mr. Barry, 65, has served as a director since June 2021. Since June 2015, Mr. Barry has served as a director of Sarepta Therapeutics, Inc. (Nasdaq: SRPT) and from June 2019 through October 2020, he served as a director of MiMedx Group Inc. (Nasdaq: MDXG). Mr. Barry has extensive experience in the investment management business. He was a founding member of Eastbourne Capital Management LLC, and served as a Managing General Partner and Portfolio Manager from 1999 to its close in 2010. Prior to Eastbourne, Mr. Barry was a Portfolio Manager and Managing Director of Robertson Stephens Investment Management. Mr. Barry holds a Bachelor of Arts from Pennsylvania State University. The Board has concluded that Mr. Barry’s experience as founder and managing director of investment funds and as a director to public companies, including service on Audit, Compensation, and Nominating and Governance Committees, qualifies him to serve as Executive Chairman.
Current report
Resignation of Chief Executive Office and Chairman of the Board of Directors
Current report
On July 15, 2024, Remi Barbier, President and Chief Executive Officer of the Company resigned from the Company, effective as of September 13, 2024 (the “Effective Date”). Mr. Barbier will remain employed by the Company through the Effective Date in a non-executive capacity, without duties or responsibilities. Pursuant to the terms of Mr. Barbier’s Employment Agreement, Mr. Barbier will receive severance compensation equal to $1.23 million over twelve months following the Effective Date, together with accrued salary through the Effective Date. Mr. Barbier will continue to participate in the Company’s medical plan at Cassava’s expense and will receive a payment sufficient to provide insurance coverage equivalent to existing third-party plans, in each case for a period of twelve months following separation. In addition, on July 15, 2024, the Company’s Board accepted Mr. Barbier’s resignation as Chairman of the Board and from board membership, effective on that date.
Current report
Other Management Changes
Current report
On July 16, 2024, Cassava and Lindsay Burns, Ph.D., SVP, Neuroscience, at the Company, agreed that Dr. Burns would step down from her employment with the Company, effective on that date.
Current report
The terms of Dr. Burns’ separation are set forth in a Consulting Agreement (the “Burns Agreement”), which includes a Release Agreement, between Dr. Burns and the Company, dated July 16, 2024. Pursuant to the Burns Agreement, following her separation from the Company and for a one-year period, Dr. Burns will furnish consulting services as, and to the extent, reasonably requested by Cassava for purposes of providing information and support for scientific research and/or obtaining governmental approval for the Company’s products. Cassava may, in its sole discretion, extend the term of the Burns Agreement for up to an additional year. The Company may also terminate the Burns Agreement at any time for cause, including, without limitation, for any actions that discredit Cassava’s business reputation. Dr. Burns will be paid $500 per hour for such consulting services, which will constitute continuous service for purposes of outstanding equity awards held by Dr. Burns.
Current report
Pursuant to the Burns Agreement, Dr. Burns will receive severance compensation equal to $0.5 million in quarterly installments over twelve months, together with accrued salary through July 16, 2024. Dr. Burns will continue to participate in the Company’s medical plan at Cassava’s expense for a period of twelve months following separation, which may be extended to eighteen months in connection with an extension of the term of the Burns Agreement. Dr. Burns will remain eligible for applicable indemnification rights under Dr. Burns’ existing indemnification agreement, the Company’s by-laws and the Company’s insurance policies, in each case, subject to the terms and conditions and limitations thereof.
Current report
The Burns Agreement provides for Dr. Burns’ general release of claims in favor of the Company, subject to certain exceptions. In addition, Dr. Burns is subject to a one-year non-competition covenant, a two-year non-solicitation covenant, and indefinite non-disparagement and confidentiality covenants. Dr. Burns will remain subject to her existing assignment of inventions agreement.
Current report
Phase 3 data and samples for bioanalysis will be directly provided to and analyzed by independent, third-party commercial consulting firms.
Current report
Expansion of Open-Label Extension Studies
Current report
In July 2024, we announced our intention to extend the Phase 3 open-label extension trial as well as an ongoing open-label extension trial for patients in the Company’s Phase 2 clinical programs, in each case by up to an additional 36 months. These amendments to the protocols will allow patients who have previously participated in an underlying trial of simufilam in Alzheimer’s disease, if they desire, to continue open-label treatment with simufilam. This expansion of the open-label extension trials offers a bridge for any gap between patients ending treatment in a clinical trial and the Company reporting to regulatory authorities the results of the ongoing, randomized, placebo-controlled Phase 3 trials. The open-label extension can continue for up to 36 months or until a new drug application for simufilam has been reviewed by FDA. Cassava also announced that it plans to add cognition and plasma biomarker monitoring to its open-label extension trial for patients who have completed the Phase 3 trials in order to gather additional long-term data on the potential impact of simufilam treatment.
Current report
Legal and other contingencies
Current report
The Company is currently involved in various claims and legal and regulatory proceedings. The Company regularly reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. Significant judgment is required in both the determination of probability and whether an exposure is reasonably estimable. Our judgments are subjective based on the status of the legal or regulatory proceedings, the merits of our defenses and consultation with in-house and outside legal counsel. Because of uncertainties related to these matters, accruals are based only on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to its pending claims and legal and regulatory proceedings and may revise its estimates. Due to the inherent uncertainties of the legal and regulatory process, our judgments may be materially different than the actual outcomes.
Current report
Research and development expenses were $31.4 million and $47.1 million during the six months ended June 30, 2024 and 2023, respectively. This 33% decrease was due primarily to the completion of patient screening and enrollment for our Phase 3 clinical program in the fall of 2023. Patients are continually completing the Phase 3 program and a portion of completers are enrolling in the lower cost open-label extension study.
Current report
General and administrative expenses were $46.2 million and $3.8 million during the three months ended June 30, 2024 and 2023, respectively. The significant increase was due primarily to a $40.0 million accrual for an estimated legal related loss contingency as well as a $1.2 million increase in stock-based compensation expense due to new grant awards in late 2023 and 2024, increased compensation costs and higher legal related expenses.
Current report
Interest income was $2.3 million and $2.2 million during the three months ended June 30, 2024 and 2023, respectively.
Current report
Interest income was $4.1 million and $4.2 million during the six months ended June 30, 2024 and 2023, respectively.
Current report
We expect interest income to decrease modestly over the remainder of 2024 as we utilize cash in our operations.
Removed paragraphs (11)
Previous report
Our science is published in multiple peer-reviewed journals. In addition, our research has been supported by NIH under multiple research grant awards. Each grant was awarded following an in-depth, peer-reviewed evaluation of our approach for scientific and technical merit by a panel of outside experts in the field.
Previous report
Phase 2 Clinical Studies
Previous report
In 2019, we completed a first-in-patient, clinical-proof-of-concept, open-label Phase 2a study of simufilam in the U.S., with substantial support from the National Institute on Aging (NIA), a division of the NIH. In this small study of thirteen patients with mild-to-moderate Alzheimer’s disease, treatment with simufilam for 28 days significantly improved certain exploratory biomarkers of Alzheimer’s pathology, neurodegeneration and neuroinflammation (p<0.001). Drug was safe and well-tolerated. Biomarkers effects were seen in all patients in both cerebrospinal fluid (CSF) and plasma.
Previous report
In September 2020, we reported final results of a Phase 2b study with simufilam in Alzheimer’s disease. In this clinical study funded by the NIH, Alzheimer’s patients treated with 50 mg or 100 mg of simufilam twice-daily for 28 days showed statistically significant (p<0.05) improvements in CSF biomarkers of disease pathology, neurodegeneration and neuroinflammation, versus Alzheimer’s patients who took placebo. Simufilam treatment also significantly reduced levels of plasma P-tau181 in sample testing conducted by Quanterix Corporation, a third-party vendor. In addition, Alzheimer’s patients treated with simufilam showed improvements in validated tests of episodic memory and spatial working memory, versus patients on placebo. Cognitive improvements correlated most strongly with decreases in levels of P-tau181. Drug was safe and well-tolerated.
Previous report
Given the absence of observable dose-limiting effects in our Phase 1 or Phase 2 studies, and in light of the strong scientific rationale and multiple peer-reviewed publications and research grant awards, we determined that simufilam demonstrated favorable proof-of-principle for further evaluation as an investigational drug for the treatment of Alzheimer’s disease.
Previous report
Biomarker Data - In this open-label treatment phase of the study, exploratory biomarkers were analyzed from CSF collected from 25 patients who agreed to undergo a lumbar puncture at baseline and again after 6 months of treatment. CSF samples were analyzed blind to timepoint by our academic collaborator at City University of New York.
Previous report
P-values shown below are baseline vs. 6-month levels by paired t-test:
Previous report
Interest income was $1.8 million and $2.1 million during the three months ended March 31, 2024 and 2023, respectively.
Previous report
The decrease in interest income was due to a decrease in cash balances compared to the prior periods as we utilize cash in our operations.
Previous report
We expect interest income to remain at historically high levels based on our cash position and the current interest rate environment.
Previous report
We leased approximately 6,000 square feet of office space pursuant to a non-cancelable operating lease in Austin, Texas expiring in April 2024. We terminated this lease on February 22, 2023 with no continuing obligations.
Reworded paragraphs (40)
Previous wording
Please also refer to the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as such risk factors may be amended, updated or modified periodically in our reports filed with the U.S. Securities and Exchange Commission (the “SEC”) for further information on these and other risks affecting us.
Current wording
Please also refer to the section entitled “Risk Factors” in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as such risk factors may be amended, updated or modified periodically in our reports filed with the U.S. Securities and Exchange Commission (the “SEC”) for further information on these and other risks affecting us.
Previous wording
This Form 10-Q may also contain statistical data and drug information received from our independent consultants or based on industry publications or other publicly available information. We have not independently verified the accuracy or completeness of the data contained in these sources of data and information. Accordingly, we make no representations as to the accuracy or completeness of such data and information. You are cautioned not to give undue weight to such data and information.
Current wording
This Quarterly Report on Form 10-Q may also contain statistical data and drug information received from our independent consultants or based on industry publications or other publicly available information. We have not independently verified the accuracy or completeness of the data contained in these sources of data and information. Accordingly, we make no representations as to the accuracy or completeness of such data and information. You are cautioned not to give undue weight to such data and information.
Previous wording
We are currently conducting two randomized placebo-controlled Phase 3 clinical trials of oral simufilam in patients with Alzheimer’s disease dementia. Both trials are fully enrolled. The trials have randomized a total of approximately 1,900 patients with mild to moderate Alzheimer’s disease at baseline. All efficacy data from our Phase 3 program remain blinded. There are no interim analyses on efficacy outcomes.
Current wording
We are currently conducting two randomized placebo-controlled Phase 3 clinical trials of oral simufilam in patients with mild-to-moderate Alzheimer’s disease dementia. Both trials are fully enrolled. The trials have randomized a total of approximately 1,900 patients with mild-to-moderate Alzheimer’s disease at baseline. All efficacy data from our Phase 3 program remain blinded. There are no interim analyses on efficacy outcomes.
Previous wording
Our first Phase 3 study, called RETHINK-ALZ, is designed to evaluate the safety and efficacy of simufilam 100 mg tablets versus placebo over 52 weeks (NCT04994483). Top-line results of our 52-week Phase 3 study are anticipated approximately year-end 2024.
Current wording
Our first Phase 3 study, called RETHINK-ALZ, is designed to evaluate the safety and efficacy of simufilam 100 mg tablets versus placebo over 52 weeks (NCT04994483). Top-line results of our 52-week Phase 3 study are anticipated by the end of 2024.
Previous wording
In September 2023, we announced the publication of new research that confirms the biological activity of simufilam. Researchers at the Cochin Institute (Paris, France) used a highly precise cell-based assay based on TR-FRET to show that simufilam interrupts amyloid binding to the α7 nicotinic acetylcholine receptor (α7nAChR). We believe disruption of amyloid binding to α7nAChR underlies simufilam’s primary mechanism of action in Alzheimer’s disease. The research paper was co-authored by Hoau-Yan Wang and Zhe Pei of the City University of New York, Erika Cecon, Julie Dam and Ralf Jockers of the Institut Cochin, and Lindsay Burns of Cassava Sciences, and appeared in a special* issue ofInternational Journal of Molecular Sciences,*a peer-reviewed journal. See Figure 1.
Current wording
In September 2023, we announced the publication of new research that confirms the biological activity of simufilam. Researchers at the Cochin Institute (Paris, France) used a highly precise cell-based assay based on TR-FRET to show that simufilam interrupts amyloid binding to the α7 nicotinic acetylcholine receptor (α7nAChR). We believe disruption of amyloid binding to α7nAChR underlies simufilam’s primary mechanism of action in Alzheimer’s disease. The research paper was co-authored by Hoau-Yan Wang and Zhe Pei of the City University of New York, Erika Cecon, Julie Dam and Ralf Jockers of the Institut Cochin, and Lindsay Burns, a former employee of Cassava Sciences, and appeared in a special* issue ofInternational Journal of Molecular Sciences,*a peer-reviewed journal. See Figure 1.
Previous wording
These data suggest a meaningful impact of simufilam on mTOR signaling. The suppression of overactive mTOR signaling and its improved responsiveness to insulin represents a mechanistic benefit of simufilam beyond the disruption of pathogenic signaling pathways of soluble amyloid. These improvements in mTOR signaling may also result from reversing an altered conformation of FLNA, allowing FLNA to dissociate from the insulin receptor when insulin binds and initiates signaling. Because mTOR contributes to age-related cellular changes, simufilam’s suppression of mTOR overactivation, concurrent with improved insulin sensitivity, may slow certain aging processes and attenuate this pathological feature of Alzheimer’s disease, potentially benefiting brain function and memory in Alzheimer’s disease and in aging. This mTOR research paper was co-authored by Hoau-Yan Wang, Zhe Pei and Kuo-Chieh Lee of the City University of New York, Boris Nikolov, Tamara Doehner and John Puente, who are investigators in the clinical trial protocols, and Lindsay Burns of Cassava Sciences, and appeared inFrontiers in Aging, a peer-reviewed journal.
Current wording
These data suggest a meaningful impact of simufilam on mTOR signaling. The suppression of overactive mTOR signaling and its improved responsiveness to insulin represents a mechanistic benefit of simufilam beyond the disruption of pathogenic signaling pathways of soluble amyloid. These improvements in mTOR signaling may also result from reversing an altered conformation of FLNA, allowing FLNA to dissociate from the insulin receptor when insulin binds and initiates signaling. Because mTOR contributes to age-related cellular changes, simufilam’s suppression of mTOR overactivation, concurrent with improved insulin sensitivity, may slow certain aging processes and attenuate this pathological feature of Alzheimer’s disease, potentially benefiting brain function and memory in Alzheimer’s disease and in aging. This mTOR research paper was co-authored by Hoau-Yan Wang, Zhe Pei and Kuo-Chieh Lee of the City University of New York, Boris Nikolov, Tamara Doehner and John Puente, who are investigators in the clinical trial protocols, and Lindsay Burns, a former employee of Cassava Sciences, and appeared inFrontiers in Aging, a peer-reviewed journal.
Previous wording
The Full Analysis Set (FAS) population (N=216) was used for the statistical analysis of efficacy endpoints. Mild and moderate sub-groups showed notable differences on changes in ADAS-Cog mean scores, baseline to month 12 (lower is better):
Current wording
Mild and moderate sub-groups showed notable differences on changes in ADAS-Cog mean scores, baseline to month 12 (lower is better):
Previous wording
The design of randomized, withdrawal phase of the study was intended to evaluate simufilam’s effects on cognition and health outcomes in Alzheimer’s patients who continue with drug treatment versus patients who discontinue drug treatment. This was a double-blind, randomized, placebo-controlled study of simufilam in patients with mild-to-moderate Alzheimer’s disease. Study patients were randomized (1:1) to simufilam or placebo for six months. To enroll in the CMS, patients must have previously completed 12 months or more of open-label treatment with simufilam. Final enrollment was 157 patients. See Figure 3.
Current wording
The design of the randomized, withdrawal phase of the study was intended to evaluate simufilam’s effects on cognition and health outcomes in Alzheimer’s patients who continue with drug treatment versus patients who discontinue drug treatment. This was a double-blind, randomized, placebo-controlled study of simufilam in patients with mild-to-moderate Alzheimer’s disease. Study patients were randomized (1:1) to simufilam or placebo for six months. To enroll in the CMS, patients must have previously completed 12 months or more of open-label treatment with simufilam. Final enrollment was 157 patients. See Figure 3.
Previous wording
Patients with mild Alzheimer’s disease (n=87) started the 24 months study with MMSE 21-26, with ten exceptions. Patients with moderate Alzheimer’s started the 24 months study with MMSE 16-20, with one patient who entered with MMSE 15.
Current wording
Patients with mild Alzheimer’s disease (n=87) started the 24 months study with MMSE 21-26, with ten exceptions (*i.e.,*patients with MMSE > 26 due to prior participation in a study of simufilam (n=2) or evidence of Alzheimer’s disease pathology (n=8)). Patients with moderate Alzheimer’s started the 24 months study with MMSE 16-20, with one patient who entered with MMSE 15.
Previous wording
An SPA agreement indicates concurrence by the FDA with the adequacy and acceptability of specific critical elements of overall protocol design (e.g., entry criteria, dose selection, endpoints, etc.). These elements are critical to ensure that our planned Phase 3 studies of simufilam in Alzheimer’s disease can
Current wording
An SPA agreement indicates concurrence by the FDA with the adequacy and acceptability of specific critical elements of overall protocol design (e.g., entry criteria, dose selection, endpoints, etc.). These elements are critical to ensure that our planned Phase 3 studies of simufilam in Alzheimer’s disease can potentially be considered adequate and well-controlled studies in support of a future regulatory submission and marketing application.
Previous wording
Over 435 patients have completed the 52-week RETHINK-ALZ study. Over 300 patients have completed the 76-week REFOCUS-ALZ study, for a total of over 735 completers.
Current wording
Over 555 patients have completed the 52-week RETHINK-ALZ study. Over 420 patients have completed the 76-week REFOCUS-ALZ study, for a total of over 975 completers.
Previous wording
We anticipate top-line data readout for our 52-week study (RETHINK-ALZ) approximately year-end 2024.
Current wording
We anticipate top-line data readout for our 52-week study (RETHINK-ALZ) by the end of 2024.
Previous wording
We have initiated a discussion with the FDA to finalize a statistical analysis plan (SAP), which is a formal document defining the detailed analysis that our independent biostatisticians will undertake as to efficacy data collected in our Phase 3 trials. The SAP includes in-depth technical details and descriptions on the intended clinical trial analysis, the statistical methods and models that will be used, the population being analyzed, the data variables that will be analyzed, how missing data will be accounted for, descriptions of covariates to be included in the statistical model, and other statistical factors, all of which will be prospectively defined, documented and finalized prior to unblinding of any efficacy outcomes.
Current wording
In July 2024, we submitted to FDA for review a statistical analysis plan (SAP), which is a formal document defining the detailed analysis that our independent biostatisticians will undertake as to efficacy data collected in our Phase 3 trials. The SAP includes in-depth technical details and descriptions on the intended clinical trial analysis, the statistical methods and models that will be used, the population being analyzed, the data variables that will be analyzed, how missing data will be accounted for, descriptions of covariates to be included in the statistical model, and other statistical factors, all of which will be prospectively defined, documented and finalized prior to unblinding of any efficacy outcomes.
Previous wording
In October 2022, we announced the initiation of an open-label extension study for our Phase 3 program. This study is designed to provide no-cost access to oral simufilam for up to one year to Alzheimer’s patients who have successfully completed a Phase 3 study of simufilam and who meet other entry criteria.
Current wording
In October 2022, we announced the initiation of an open-label extension study for our Phase 3 program. This study is designed to provide no-cost access to oral simufilam for up to one year to Alzheimer’s patients who have successfully completed a Phase 3 study of simufilam and who meet other entry criteria and to generate additional long-term clinical safety data for oral simufilam 100 mg twice daily over 52 weeks. Each clinical investigational site and each patient chooses whether to participate in this open-label extension study with no obligation to participate.
Previous wording
Patient enrollment for this study began in November 2022. To date, over 655 patients entered the open-label extension study.
Current wording
Patient enrollment for this study began in November 2022, with approximately 89% of patients in Cassava’s ongoing Phase 3 program have elected to continue with open-label treatment with simufilam after completion of the blinded trials.
Previous wording
We have yet to generate any revenues from product sales. We have an accumulated deficit of $355.7 million at March 31, 2024. These losses have resulted principally from costs incurred in connection with research and development activities, salaries and other personnel-related costs and general corporate expenses. Research and development activities include costs of clinical and preclinical trials as well as clinical supplies associated with our product candidates. Salaries and other personnel-related costs include stock-based compensation associated with stock options and other equity awards granted to employees and non-employees. Our operating results may fluctuate substantially from period to period as a result of enrollment rates of clinical trials for our product candidates, timing of preclinical activities and our need for clinical supplies.
Current wording
We have yet to generate any revenues from product sales. We have an accumulated deficit of $349.6 million at June 30, 2024. These losses have resulted principally from costs incurred in connection with research and development activities, salaries and other personnel-related costs and general corporate expenses. Research and development activities include costs of clinical and preclinical trials as well as clinical supplies associated with our product candidates. Salaries and other personnel-related costs include stock-based compensation associated with stock options and other equity awards granted to employees and non-employees. Our operating results may fluctuate substantially from period to period as a result of enrollment rates of clinical trials for our product candidates, timing of preclinical activities and our need for clinical supplies.
Previous wording
The fair value of common stock warrant liabilities was determined on the January 3, 2024 warrant distribution date using a Monte Carlo valuation model. Determining the appropriate fair value model and calculating the fair value of common stock warrants requires considerable judgment. Any change in the estimates used may cause the value to be higher or lower than that reported. Subsequent to their distribution, the common stock warrants have been traded on the Nasdaq Capital Market under the trading symbol "SAVAW". The fair value of common stock warrant liabilities at March 31, 2024 was determined using the closing price for the common stock warrants on that date. All changes in the fair value are recorded in the statements of operations each reporting period. Fair value changes may be significantly different from those recorded in the financial statements due to of the use of judgment and the inherent uncertainty in estimating the fair value of these instruments in the initial valuation as of January 3, 2024, the warrant distribution date.
Current wording
The fair value of common stock warrant liabilities was determined on the January 3, 2024 warrant distribution date using a Monte Carlo valuation model. Determining the appropriate fair value model and calculating the fair value of common stock warrants requires considerable judgment. Any change in the estimates used may cause the value to be higher or lower than that reported. Subsequent to their distribution, the common stock warrants were traded on the Nasdaq Capital Market under the trading symbol "SAVAW". The fair value of common stock warrant liabilities at March 31, 2024 was determined using the closing price for the common stock warrants on that date. May 2, 2024 was the final day of trading for the common stock warrants on the Nasdaq Capital Market. Subsequent to that date and through the Warrant Redemption beginning May 7, 2024, the warrants were considered to have no value since there was no active market for trading. All changes in the fair value are recorded in the statements of operations each reporting period. Fair value changes may be significantly different from those recorded in the financial statements due to of the use of judgment and the inherent uncertainty in estimating the fair value of these instruments in the initial valuation as of January 3, 2024, the warrant distribution date.
Previous wording
Other than as described above, there have been no material changes to our critical accounting estimates during the three months ended March 31, 2024 from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 28, 2024.
Current wording
Other than as described above, there have been no material changes to our critical accounting estimates during the six months ended June 30, 2024 from those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on February 28, 2024.
Previous wording
Results of Operations–** Three Months Ended March 31, 2024 and 2023**
Current wording
Results of Operations–** Three and Six Months Ended June 30, 2024 and 2023**
Previous wording
Research and development expenses were $16.2 million and $22.1 million during the three months ended March 31, 2024 and 2023, respectively. This 27% decrease was due primarily to the completion of patient screening and enrollment for our Phase 3 clinical program in the fall of 2023.
Current wording
Research and development expenses were $15.2 million and $25.0 million during the three months ended June 30, 2024 and 2023, respectively. This 39% decrease was due primarily to the completion of patient screening and enrollment for our Phase 3 clinical program in the fall of 2023. Patients are continually completing the Phase 3 program and a portion of completers are enrolling in the lower cost open-label extension study.
Previous wording
General and administrative expenses were $3.7 million and $4.4 million during the three months ended March 31, 2024 and 2023, respectively. The 16% decrease was due primarily to $1.7 million decrease in legal expenses as the Company met its insurance deductible in Q4 2023 and has recorded approximately $3.0 million in insurance recoveries during the three months ended March 31 2024. The decrease was partially offset by a $1.1 million increase in stock-based compensation expense due to new grant awards in 2023.
Current wording
General and administrative expenses were $49.9 million and $8.2 million during the six months ended June 30, 2024 and 2023, respectively. The significant increase was due primarily to a $40.0 million estimated legal related loss contingency as well as $2.3 million increase in stock-based compensation expense due to new grant awards in late 2023 and 2024 and increased compensation costs. The increases were partially offset by a $1.2 million decrease in legal expenses as the Company met its insurance deductible in Q4 2023 and has recorded approximately $8.8 million in insurance recoveries during the six months ended June 30, 2024.
Previous wording
We expect general and administrative expense for 2024 will decrease compared to 2023 as insurance proceeds are expected to offset higher legal and professional fees related to ongoing securities class action and derivative lawsuits and governmental investigations. Decreased legal expenses are expected to be partially offset by higher stock-based compensation expense.
Current wording
We expect general and administrative expense for 2024 will remain at high historic levels due to professional fees related to ongoing securities class action and derivative lawsuits and governmental investigations. In addition, stock-based compensation expense will be higher than historic levels due to 2023 and 2024 stock option grants and our anticipated hiring of a new Chief Executive Officer.
Previous wording
The change in fair value of warrants was $43.0 million for the three months ended March 31, 2024. There were no common stock warrants outstanding or change in fair value of warrants for the three months ended March 31, 2023. The 2024 change was attributable to a gain on the change in fair value of our liability-classified warrants from distribution on January 3, 2024 to March 31, 2024. The change in fair value was primarily driven by a decrease in the closing price for the common stock warrants in open-market trading on March 31, 2024 from the fair value determined by the Monte Carlo simulation at distribution.
Current wording
The change in fair value of warrants was $65.1 million for the three months ended June 30, 2024. The change in fair value of warrants was $108.2 million for the six months ended June 30, 2024. There were no common stock warrants outstanding or change in fair value of warrants for the three and six months ended June 30, 2023. The 2024 change was attributable to a gain on the change in fair value of our liability-classified warrants from distribution on January 3, 2024 to their redemption in May 2024. The change in fair value was primarily driven by a decrease in fair value at redemption as there was little or no market trading activity and the warrants were redeemed for a nominal payment of $0.001 per warrant.
Previous wording
We record the activities related to leasing office space to third parties in buildings we own as other income, net, as leasing is not core to the Company’s operations. Other income, net, was $160,000 and $190,000 during the three months ended March 31, 2024 and 2023, respectively. Other income, net, was lower in the three months ended March 31, 2024 as due to higher vacancy rates in 2024 compared to the prior year period. We expect other income, net, to decrease in 2024 as higher vacancy rates are expected to further lower rental income.
Current wording
We record the activities related to leasing office space to third parties in buildings we own as other income, net, as leasing is not core to the Company’s operations. Other income, net, was $99,000 and $203,000 during the three months ended June 30, 2024 and 2023, respectively. Other income, net, was $259,000 and $393,000 during the six months ended June 30, 2024 and 2023, respectively. Other income, net, was lower in the three and six months ended June 30, 2024 as due to higher vacancy rates in 2024 compared to the prior year periods. We expect other income, net, to decrease in 2024 as higher vacancy rates are expected to further lower rental income.
Previous wording
Since inception, we have financed our operations primarily through public and private stock offerings, payments received under collaboration agreements and interest earned on our cash and cash equivalents balances. We intend to continue to use our capital resources to fund research and development activities, capital expenditures, working capital requirements and other general corporate purposes. As of March 31, 2024, cash and cash equivalents were $124.2 million.
Current wording
Since inception, we have financed our operations primarily through public and private stock offerings, payments received under collaboration agreements and interest earned on our cash and cash equivalents balances. We intend to continue to use our capital resources to fund research and development activities, capital expenditures, working capital requirements and other general corporate purposes. As of June 30, 2024, cash and cash equivalents were $207.3 million.
Previous wording
Each warrant entitled the holder to purchase, at the holder’s sole expense and exclusive election, at an exercise price of $33.00 per warrant, one and one-half shares of common stock (rounded down for any fractional shares). Payment for shares of common stock upon exercise of warrants must be in cash.
Current wording
Each warrant entitled the holder to purchase, at the holder’s sole expense and exclusive election, at an exercise price of $33.00 per warrant, one and one-half shares of common stock (rounded down for any fractional shares).
Previous wording
On April 15, 2024, the Company announced that all outstanding warrants would be redeemed on May 7, 2024 (the “Redemption Date”). The redemption price shall equal to 1/10 of $0.01 per warrant. The warrants were exercisable at any time starting on January 3, 2024 until the business day prior to the Redemption Date.
Current wording
On April 15, 2024, the Company announced that all outstanding warrants were to be redeemed on May 7, 2024 (the “Redemption Date”). The redemption price was equal to 1/10 of $0.01 per warrant. The warrants were exercisable at any time starting on January 3, 2024 until the business day prior to the Redemption Date.
Previous wording
Gross proceeds in 2024 from the warrant distribution totaled approximately $126.3 million from the issuance of approximately 5.7 million common shares at $22.00 per share. Total net proceeds of the warrant distribution were approximately $123.5 million after deducting estimated exercise expenses.
Current wording
Gross proceeds in 2024 from the warrant distribution totaled approximately $126.3 million from the issuance of approximately 5.7 million common shares at $22.00 per share. Total net proceeds of the warrant distribution were approximately $123.6 million after deducting estimated exercise expenses.
Previous wording
After the first $20 million of gross proceeds, the Company was obligated to pay a commission of 2.5% of the gross proceeds from the sale of shares of common stock from warrant exercises to the Company's financial advisor for the warrant distribution. Total cost of warrant exercises through the Redemption Date were approximately $2.8 million.
Current wording
After the first $20 million of gross proceeds, the Company was obligated to pay a commission of 2.5% of the gross proceeds from the sale of shares of common stock from warrant exercises to the Company's financial advisor for the warrant distribution. Total cost of warrant exercises through the Redemption Date were approximately $2.7 million.
Previous wording
There were no common stock sales under the ATM during the three months ended March 31, 2024, and up to $200 million in common stock remains available under the ATM.
Current wording
There were no common stock sales under the ATM during the three and six months ended June 30, 2024, and up to $200 million in common stock remains available under the ATM.
Previous wording
The Company’s market capitalization, including all outstanding stock options, was $89.4 million at the inception of the Plan in August 2020. If the Company were to exceed a $5 billion market capitalization for no less than 20 consecutive trading days, and conditions noted above for payment are met, all Plan milestones would be deemed achieved, in which case total cash bonus awards would range from a minimum of $111.4 million up to a hypothetical maximum of $289.7 million. Any warrants outstanding are excluded from the determination of market capitalization.
Current wording
The Company’s market capitalization, including all outstanding stock options, was $89.4 million at the inception of the Plan in August 2020. If the Company were to exceed a $5 billion market capitalization for no less than 20 consecutive trading days, and conditions noted above for payment are met, all Plan milestones would be deemed achieved, in which case total cash bonus awards would range from a minimum of $111.4 million up to a hypothetical maximum of $289.7 million.
Previous wording
No Valuation Milestones were achieved during the years ended December 31, 2023 and 2022 or the three months ended March 31, 2024.
Current wording
No Valuation Milestones were achieved during the years ended December 31, 2023 and 2022 or the six months ended June 30, 2024.
Previous wording
Net cash used in operating activities was $19.1 million for the three months ended March 31, 2024, resulting primarily from the net income of $25.0 million and stock-based compensation expense of $2.3 million, offset by a change in fair value of warrants of $43.0 million, an decrease in accounts payable and accrued expenses of $1.0 million, an decrease in accrued developmental expenses of $1.2 million and a decrease in in prepaid and other current assets of $1.3 million.
Current wording
Net cash used in operating activities was $37.4 million for the six months ended June 30, 2024, resulting primarily from the net income of $31.2 million, stock-based compensation expense of $4.9 million and an increase in accounts payable and accrued expenses of $42.0 million, offset by a change in fair value of warrants of $108.2 million, an decrease in accrued developmental expenses of $1.4 million and a decrease in in prepaid and other current assets of $6.3 million.
Previous wording
Net cash used in operating activities was $13.3 million for the three months ended March 31, 2023, resulting primarily from the net loss of $24.3 million, partially offset by an increase in accounts payable and accrued expenses of $4.6 million, an increase in accrued developmental expenses of $3.0 million, a decrease in in prepaid and other current assets of $2.7 million and stock-based compensation expense of $0.7 million.
Current wording
Net cash used in operating activities was $33.2 million for the six months ended June 30, 2023, resulting primarily from the net loss of $50.6 million, partially offset by an increase in accounts payable and accrued expenses of $6.7 million, an increase in accrued developmental expenses of $4.8 million, a decrease in in prepaid and other current assets of $4.1 million and stock-based compensation expense of $1.5 million.
Previous wording
There was no cash used in investing activities during the three months ended March 31, 2024 .
Current wording
Net cash used in investing activities during the six months ended June 30, 2024 was $29,000 for computers and equipment and other assets.
Previous wording
Net cash used in investing activities during the three months ended March 31, 2023 was $0.4 million as final payment was made on renovations and fixtures for our corporate headquarters.
Current wording
Net cash used in investing activities during the six months ended June 30, 2023 was $0.4 million as final payment was made on renovations and fixtures for our corporate headquarters.
Previous wording
Net cash provided by financing activities during the three months ended March 31, 2024 was $22.2 million of net proceeds from the exercise of warrants.
Current wording
Net cash provided by financing activities during the six months ended June 30, 2024 was $123.6 million of net proceeds from the exercise of warrants.
Previous wording
Net cash provided by financing activities during the three months ended March 31, 2023 was $0.1 million from the exercise of stock options.
Current wording
Net cash provided by financing activities during the six months ended June 30, 2023 was $1.0 million, from the exercise of stock options.
Previous wording
We own an office complex in Austin, Texas, a portion of which serves as our corporate headquarters. This property is intended to accommodate our anticipated growth and expansion of our operations in the coming years. Maintenance, physical facilities, leasing, property management and other key responsibilities related to property ownership are outsourced to professional real-estate managers. The office complex measures approximately 90,000 rentable square feet. At March 31, 2024, we occupied approximately 25% of the property with the remainder either leased or available for lease to third parties. Virtually all existing tenant leases will expire in 2024. We believe tenant leases that expire in 2024 may likely not be extended, renewed or re-leased beyond their expiry date, in which case we will no longer receive rental payments or reimbursement for shared expense for such office space.
Current wording
We own an office complex in Austin, Texas, a portion of which serves as our corporate headquarters. This property is intended to accommodate our potential growth and expansion of our operations in the coming years. Maintenance, physical facilities, leasing, property management and other key responsibilities related to property ownership are outsourced to professional real-estate managers. The office complex measures approximately 90,000 rentable square feet. At June 30, 2024, we occupied approximately 25% of the property with the remainder either leased or available for lease to third parties. Most tenant leases will expire in 2024. We believe tenant leases that expire in 2024 may likely not be extended, renewed or re-leased beyond their expiry date, in which case we will no longer receive rental payments or reimbursement for shared expense for such office space.
Previous wording
We have an accumulated deficit of $355.7 million as of March 31, 2024. We expect our cash requirements to be significant in the future. The amount and timing of our future cash requirements will depend on regulatory and market acceptance of our drug candidates, the resources we devote to researching and developing, formulating, manufacturing, commercializing and supporting our products and other corporate needs. We believe that our current cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months. We may seek additional future funding through public or private financing in the future, if such funding is available and on terms acceptable to us. However, there are no assurances that additional financing will be available on favorable terms, or at all.
Current wording
We have an accumulated deficit of $349.6 million as of June 30, 2024. We expect our cash requirements to be significant in the future. The amount and timing of our future cash requirements will depend on regulatory and market acceptance of our drug candidates, the resources we devote to researching and developing, formulating, manufacturing, commercializing and supporting our products and other corporate needs. We believe that our current cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months. We may seek additional future funding through public or private financing in the future, if such funding is available and on terms acceptable to us. However, there are no assurances that additional financing will be available on favorable terms, or at all.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The Full Analysis Set (FAS) population (N=216) was used for the statistical analysis of efficacy endpoints.
Current report — wording carried from elsewhere
These expanded extension studies are designed to provide no-cost access to oral simufilam to Alzheimer’s patients who have successfully completed a Phase 2 or Phase 3 study of simufilam and who meet other entry criteria. Each clinical investigational site must choose whether to participate in the open-label extension studies.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
potentially be considered adequate and well-controlled studies in support of a future regulatory submission and marketing application.
Previous report — wording carried elsewhere
We expect the open-label extension study to generate additional long-term clinical safety data for oral simufilam 100 mg twice daily over 52 weeks. There is no obligation for a patient or a physician to participate in the open-label extension study. Each clinical investigational site and each patient chooses whether to participate in this open-label extension study.