Should you buy SAVA stock in Q4 2021 amid positive Simufilam trial data?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Sep 22, 2021
  • Cassava Science on Wednesday spiked more than 21%in the morning before falling for a 3.52% intraday loss.
  • The company posted top-line data on a pre-planned interim analysis of an ongoing open-label Simufilam study.
  • Cassava is testing the drug in patients with mild to moderate Alzheimer’s disease.

On Wednesday, Cassava Sciences Inc. (NASDAQ:SAVA) shares swang to a net intraday loss of about 3.52%, as of this writing, despite spiking more than 21% in the morning.

The stock surged after the company posted top-line data on a pre-planned interim analysis of an ongoing open-label study with its drug label Simufilam in patients with a mild-to-moderate Alzheimer’s disease.

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Of the initial 50 study subjects who completed 12 months of the open-label treatment with Simufilam, 68% improved on ADAS-Cog at 12 months, with an average of 6.8 points. 

ADAS Cog is a scoring used to measure the level of cognitive impairment in people with Alzheimer’s disease. A four-point change at six months is considered a significant improvement in clinical terms.

Should you consider investing in Cassava shares now?

Although investors initially responded positively to the top-line Simufilam data release, the stock later erased those gains, indicating concerns about the potential impact on the company’s revenues.

Simufilam trials on people with Alzheimer’s disease showed promise, but as witnessed in the case of Biogen Inc.’s (NASDAQ:BIIB) Aduhelm, which attracted controversy after its approval.

As a result, the bar for approving Alzheimer’s treatments has been set higher, limiting the potential impact of clinical trial results on the stock price.

Therefore, it could be best to monitor how Simufilam progresses in the clinical trials before betting on growth.

Source – TradingView

Cassava Sciences looks highly volatile

Technically, Cassava Sciences shares look significantly volatile after spiking more than 21% pre-market on Wednesday, then later dropping to swing to a net intraday loss. Moreover, although the stock has plunged significantly since August, it still trades reasonably above oversold conditions, leaving room for more downward movements.

Therefore, investors can target extended pullback profits at approximately $41.56 or lower at $32.12. On the other hand, if investors continue to bet in Wednesday’s Simufilam data, the stock could rise further before finding resistance at $58.58 or higher at $68.11.

Cassava Sciences seems poised for more pullback

In summary, although Cassava Science reported promising progress in the top-line data for Simufilam drug on people with mid-moderate Alzheimer’s disease, investors quickly pushed the price lower, indicating the unpredictability of potential for treatments in clinical trials.

Therefore, it could be worth waiting for the stock to retest current support levels while monitoring the company’s performance in the coming quarter.

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