Business

Cassava Sciences CEO says ‘enormous profit motive’ behind N.Y. law firm’s fraud allegations

Cassava Sciences Inc.’s Chief Government Remi Barbier mentioned on Friday that current allegations of fraud have been “false and deceptive” and have been a results of investor pursuits to drive down the value of the biotechnology firm’s inventory.

Cassava’s inventory
SAVA,
-11.00%

had plunged 50.5% over the previous three days of final week, after New York-based regulation agency Labaton Sucharow filed a Citizen Petition on behalf of shoppers, requesting the Meals and Drug Administration halt medical research of Cassava’s simufilam, given “a number of causes to query the standard and integrity” of the corporate’s analysis.

“After I first learn the allegation, I felt dazed and confused,” Cassava’s Barbier mentioned Friday.

Though Cassava has disputed Labaton Sucharow’s allegations, the inventory has did not get well. It rallied as a lot as 8.1% early Friday, however reversed course to tumble 12.0% in afternoon buying and selling. It has now shed 18.0% this week.

The selloff for the reason that allegations have been made has wiped away about $2.8 billion from Cassava’s market capitalization.

Don’t miss: Cassava Sciences punches back, after Quanterix took a swing by saying it didn’t interpret or prepare the disputed trial data.

It’s no marvel that CEO Barbier launched one other public assertion on Friday.

“Let me be very clear: I believe these allegations are false,” Barbier mentioned in a press release. “The allegations declare that our science is inconceivable, surprising and distinctive to Cassava Sciences, and subsequently it’s all an elaborate fraud. By these standards, all drug improvements are fraudulent.”

In an audio file posted to Cassava’s website, Barbier identified that Labaton Sucharow disclosed shortly after posting the Citizen Petition that not solely did the shoppers it represented have experience in neuroscience, drug discovery, biochemistry and finance, however “additionally they maintain brief positions in Cassava inventory.”

A brief place is a guess {that a} inventory will fall in worth. Read more about short selling.

“These allegations will not be solely false, I additionally assume they’re deceptive,” Barbier mentioned. “There’s an infinite revenue motive at work,” he mentioned.

Labaton Sucharow didn’t reply to a MarketWatch request for remark.

blank

FactSet, MarketWatch

Regardless of the current selloff, the inventory was nonetheless up 601.1% year-to-date, in contrast with the 15.6% achieve within the iShares Biotechnology exchange-traded fund
IBB,
-0.50%

and the S&P 500 index’s
SPX,
+0.04%

20.8% rise.

After hovering 190.6% in January, the inventory rocketed 141.2% on Feb. 2 after Cassava announced upbeat results of an interim evaluation of simufilam.

Brief curiosity, which was at a near-record 5.98 million shares on the finish of January, dropped by 56% to 2.62 million shares as of mid-February, in response to FactSet knowledge, which means many of the bearish bets towards the inventory have been closed out after the inventory spike larger. Because the rally continued — it was up 1,627.7% yr so far simply previous to final week’s selloff — brief curiosity additionally elevated steadily to five.40 million shares.

Brief curiosity as a % of public float, or shares accessible for buying and selling by the general public was 13.9% as of Aug. 31, in response to monetary knowledge and analytics firm S3 Partners, based mostly on newest change knowledge. Compared, brief curiosity as a % of float for meme inventory GameStop Corp.
GME,
-4.44%

was 11.5% and for AMC Leisure Holdings Inc.
AMC,
-2.20%

was 17.4%.

https://www.marketwatch.com/story/cassava-sciences-ceo-says-enormous-profit-motive-behind-n-y-law-firms-fraud-allegations-11630690772?rss=1&siteid=rss | Cassava Sciences CEO says ‘monumental revenue motive’ behind N.Y. regulation agency’s fraud allegations

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