The stock market is full of ups and downs, which isn’t necessarily a bad thing. Shares of clinical-stage biotechnology company Cassava Sciences (NASDAQ:SAVA) are prone to peaks and valleys, but this means that you can trade SAVA stock profitably if you have good timing.
Don’t get the wrong idea — you can also hold Cassava shares long-term if you believe in the company. After all, Cassava Sciences is one of the more interesting companies using science to address the terrible effects of Alzheimer’s disease.
Even if you’re a long-term investor, however, you’ll still want to time your entry correctly. Since SAVA stock just pulled back, you may have an opportunity to buy the shares at a favorable price point.
Today, we’ll discuss what may have caused the stock-price drawdown. Just as importantly, we’ll address a recent update which should offer encouragement to Cassava’s shareholders, as well as some Alzheimer’s patients.
SAVA Stock at a Glance
History shows that SAVA stock has some support in the $40’s. Therefore, accumulating some shares in that price zone could be a reliable trading strategy.
There are examples of this from April, September and late October of this year. Multiple times, buying some Cassava Sciences shares in the $40’s proved to be a viable trading method.
As we moved into the second half of November, SAVA stock came back into the buy zone. In a moment, we’ll examine the event that may have caused this to occur.
When stocks pull back quickly, it can be scary at that moment. As the old saying goes, however, investors can buy when there’s blood in the streets.
That’s a gruesome saying, but the point is valid. Holding SAVA stock during peak fear worked out extremely well in the past, as the share price has gone as high as $146.16 in 2021.
Accusations May Be False
So, here’s what likely caused the Cassava share price to pull back recently.
According to the Wall Street Journal, the U.S. Securities and Exchange Commission (SEC) is investigating claims that Cassava Sciences manipulated research results of the company’s proposed Alzheimer’s drug, Simufilam.
One benefit of Simufilam is that it’s a relatively non-invasive oral drug candidate. Furthermore, this drug reduces both neurodegeneration and neuroinflammation and it has already yielded positive, placebo-controlled Phase 2b results. Plus, according to InvestorPlace contributor Nick Clarkson, Cassava Sciences reached an agreement with the U.S. Food and Drug Administration (FDA) under a Special Protocol Assessment (SPA) for “both of its pivotal Phase 3 studies of oral Simufilam for the treatment of patients with Alzheimer’s disease.”
Regarding the recent allegations, Marina R. Picciotto, a Yale School of Medicine professor and editor-in-chief of the Journal of Neuroscience, confirmed that the journal had found no proof of data manipulation in Cassava’s research papers.
Moving Forward with the Research
Cassava Sciences CEO Remi Barbier has strenuously denied the accusations.
“There is zero evidence, zero credible evidence, zero proof that I’ve ever engaged in, nor anyone I know, has ever engaged in funny business,” Barbier insisted in his response to these accusations.
Bear in mind that the SEC hasn’t actually charged Cassava Sciences with a crime. It’s only an investigation, and it might be resolved with no action being taken against the company.
Meanwhile, the folks at Cassava Sciences aren’t letting the investigation prevent them from moving forward with clinical research.
Very recently, the company launched a second Phase 3 study of Simufilam. This particular study is designed to evaluate the safety and efficacy of Simufilam over 78 weeks. The test subject will be approximately 1,000 patients with Alzheimer’s disease in clinical sites in the U.S. and Canada.
The company’s CEO appears to remain confident and determined to move forward with this crucial research.
“Alzheimer’s disease isn’t going away anytime soon, and neither are we,” Barbier assured.
The Takeaway on SAVA Stock
Despite the SEC’s investigation, Cassava Sciences is still advancing its novel drug solution for Alzheimer’s disease.
Besides, we’ve seen SAVA stock pull back before on multiple occasions.
So, you don’t have to panic when there’s a blood-in-the-streets situation. Instead, you can stay calm and decide for yourself whether Cassava Sciences is a worthy investment. SAVA gets a grade of “B” in my Portfolio Grader.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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