SEC Charges Cassava Sciences, Former Executives for Misleading Claims in Alzheimer's Trial

By Stephen Nakrosis

Cassava Sciences and two former executives will pay more than $40 million to settle charges related to misleading statements made about a clinical trial for the company's purported therapeutic treatment of Alzheimer's disease, the Securities and Exchange Commission said on Thursday.

Founder and former chief executive officer Remi Barbier, former senior vice president of neuroscience Dr. Lindsay Burns, and the company were charged with violating antifraud provisions, according to the complaint. Additionally, Cassava was charged with violating reporting provisions of the federal securities laws, the SEC said.

Without admitting or denying the allegations Cassava, Barbier, and Burns consented to civil injunctions against future violations. Cassava, Barbier, and Burns also agreed to pay civil penalties of $40 million, $175,000, and $85,000, respectively, the SEC said. The two former executives also agreed to be subject to officer-and-director bars, according to the SEC.

Cassava said it cooperated fully with the SEC's investigation and has implemented remedial measures. The company also said it doesn't currently expect the Justice Department's Criminal Division will bring charges against it or seek a resolution with the company.

The settlements are subject to court approval.

The SEC also said a related order charged Cassava consultant Dr. Hoau-Yan Wang for manipulating the reported clinical trial results. Without admitting or denying the violations, Wang agreed to cease and desist from future violations and to pay a monetary penalty, the SEC said.

According to the SEC's order, Wang received information that unblinded him to some aspects of the Phase 2 clinical data, which he used to identify about a third of the patients enrolled in the trial. That let Wang manipulate the data to create the appearance that the drug had caused dramatic improvements in biomarkers associated with Alzheimer's disease.

Write to Stephen Nakrosis at stephen.nakrosis@wsj.com

(END) Dow Jones Newswires

September 26, 2024 19:20 ET (23:20 GMT)

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