Cassava Sciences (SAVA) experienced a significant decline of more than 30% following the indictment of Dr. Hoau-Yan Wang, a professor at the CUNY School of Medicine, on charges related to $16 million in fraud.
On Friday, SAVA closed at $12.35, marking a 34.83% drop. Post-trading hours saw a slight recovery with an increase of $0.90 or 7.28%.
The indictment accuses Dr. Wang of falsifying data concerning Cassava's Alzheimer's drug, simufilam, used in applications for NIH grants. He faces charges of major fraud against the United States, two counts of wire fraud, and making false statements.
Cassava Sciences clarified that Dr. Wang and his affiliated public university medical school have not participated in the Phase 3 clinical trials of simufilam.
According to the Justice Department, from May 2015 through April 2023, Dr. Wang allegedly engaged in fabricating and falsifying scientific data in NIH grant applications submitted on behalf of himself and the biopharmaceutical company.
The disbursement of the $16 million in grants occurred between 2017 and 2021, funding part of Dr. Wang's laboratory work and salary, as noted by the Department of Justice.