Cassava Sciences Stock Sinks 14% After $40 Million Settlement With SEC
$Cassava Sciences (SAVA.US)$ tumbled by about 14% after the company said it agreed to pay a $40 million in monetary penalty as part of a settlement of allegations by the Securities and Exchange Commission that its reports on a clinical trial "negligently contained materially misleading statements and omissions."
The SEC investigation included the company's regulatory disclosures regarding its phase 2b clinical trial of simufilam for the treatment of Alzheimer’s disease (the “Phase 2b Study”) and related matters, according to company's filing Friday.
Two former senior employees of the company also settled negligence-based disclosure charges brought by the SEC, according to Cassava's press release issued yesterday. The company said it doesn't expect the Department of Justice's Criminal Division to file charges against the company. Cassava didn't admit nor deny the SEC's allegations.
The company reiterated that its net cash use in operations for the second half of 2024 is expected to be $80 to $90 million, which includes the $40 million monetary penalty related to this resolution. Its outlook for cash at year-end 2024 remains unchanged at $117 million to $127 million.
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