Alzheimer's Drug Developer Hit By Fraud Scandal—Stock Crashes 35%

Cassava Sciences (SAVA) just took a gut punch: a federal grand jury in Maryland indicted CUNY professor Hoau-Yan Wang yesterday for allegedly fabricating research data to secure $16 million in NIH grants.

The stock tanked 34.83% by Friday close ($12.35), though it bounced back 7.28% in after-hours trading.

What went down: Between May 2015 and April 2023, Wang allegedly cooked the books on grant applications—falsifying scientific data used to develop simufilam, Cassava’s experimental Alzheimer’s treatment. The $16M in grants (dispersed 2017-2021) partly funded Wang’s lab and salary.

The charges: One count of major fraud against the US, two counts of wire fraud, one count of false statements.

Key detail: Cassava says Wang and his university had zero involvement in the company’s Phase 3 clinical trials of simufilam—suggesting the drug development itself might be separate from the fraudulent grant scheme. Still, the reputational damage is brutal.

The Justice Department is treating this as a major case of scientific misconduct tied directly to a publicly traded biotech firm.