SAVA stock looks poised to regain YTD decline as investors see potential of biopharma’s Alzheimer’s disease treatment
Shares of Austin, Texas-based neuroscience biopharma company Cassava Sciences Inc (NASDAQ:SAVA) surged 11.73% in extended trading after a Form 4 filing disclosed an independent board director made a significant purchase in the post-fourth quarter results trading window.
Q4 2022 hedge fund letters, conferences and more
Find A Qualified Financial Advisor
Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now.
The company's novel science is based on stabilizing – but not removing – a critical protein in the brain to detect and treat neurodegenerative diseases, such as Alzheimer’s disease.
Rick Barry (Richard), a board member who has served on the panel since mid 2021 disclosed the purchase of 88,841 shares in trades which occurred on earlier this week.
Barry purchased 11,565 shares at $26.13 apiece on Monday and returned on Tuesday with a more significant 77,276 share trade at $25.76 each as the stock gave up recent gains made after the Q4 results.
The total value across both transactions was $2.29 million with an average purchase price of $25.81. Barry's total stake in the company rose to 0.65% of the float following the trade.
The shares have seen above-average levels of institutional buying activity in recent months, as we discovered on the Fintel Quant Fund Sentiment Score dashboard. With a score of 69.53, we can see bullish levels of accumulation, ranking Cassava stock in the top 28% out of 36,156 globally screened securities.
SAVA has 306 institutional owners and shareholders on the register that own 11.89 million shares of the float.
The chart to the right shows the growing level of share ownership over the last five years.
Cassava Sciences reported its fourth quarter and full-year results to investors on Feb. 28, posting a quarterly net loss of $19.13 million, or a loss per share of 47 cents. The net result fared better than Fintel's consensus estimate of a loss of 57 cents per share.
The chart below from Fintel’s forecast page for SAVA shows the quarterly track record for beats and misses vs analyst expectations for the last five years.
Cassava spent $17.65 million in research and development, up from $10.34 million in 2021 and ended the year with cash and cash equivalents of $201.02 million. For the first half of 2023, SAVA’s management guided a cash burn forecast of $45 million to $50 million that will mainly be used for the clinical program for its Alzheimer’s disease oral drug candidate, simufilam.
The beat and outlook commentary on goals for the year ahead boosted shares in the trading days that followed.
Cassava Sciences’ scientific goals for 2023 cited from the results are:
- In Q2 2023, management expects to complete patient dosing for its on-going Cognition Maintenance Study, in which more than 100 patients with mild-to-moderate Alzheimer’s disease are randomized (1:1) to simufilam or placebo for six months.
- Mid-year 2023, Cassava expects an independent third party to present evidential data for the biological activity of simufilam outside the field of neurodegeneration. Also the company expects an independent, third party to generate new data for SavaDx using mass spectrometry.
- In Q3 2023, they expect to announce top-line results of the Cognition Maintenance Study.
- In Q4 2023, management expects to complete patient enrollment for both of its Phase 3 studies.
HC Wainwright & Co analyst Vernon Bernardino reiterated his buy call and very bullish $124 target on the stock after the company highlighted its significant enrollment progress in its Phase 3 clinical studies of simufilam in Alzheimers disease. The shares closed yesterday at $24.97, before jumping 12% in afterhours trading.
Bernardino thinks the Cassava stock could experience a positive mid-year catalyst when the independent third-party presents evidential data supporting simufilam.
Fintel’s consensus target price of $85.68 for SAVA suggests the stock has 200% upside over the 12 months from current levels.
Forward revenue estimates from analysts in the Street suggest sales will begin scaling up from 2026 onward.
Fintel’s short squeeze score of 83.43 for SAVA highlights the company may be a candidate for a short covering rally with 27.56% of the float shorted, according to Nasdaq and S&P Capital IQ data. Shorted shares currently have 17.27 days to cover with a borrow fee rate of 8.32%.
Article by Ben Ward, Fintel
