SEC Launches Investigation into Manipulated Alzheimer’s Study Data Claims

SEC_Editorial_Mark Van Scyoc

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The U.S. Securities and Exchange Commission (SEC) has launched an investigation into Texas-based Cassava Sciences. The agency will investigate claims that the company manipulated research data on its experimental Alzheimer’s drug, Simufilam.

In an SEC filing on November 15, Cassava indicated it was cooperating with government investigations, although it did not name which government agency or agencies were requesting information. The company emphasized that an investigation is not a sign of wrongdoing.

Since 2015, the National Institutes of Health (NIH) has awarded up to $20 million in grants to the company and its academic collaborators. According to Remi Barbier, president and chief executive officer of Cassava, the NIH is also investigating the claims.

The original allegations occurred in a public petition in August asking the U.S. Food and Drug Administration (FDA) to suspend the company’s clinical trials. The authors of the petition are two physicians who, according to the Wall Street Journal, “said they came to doubt Cassava’s research and have shorted its stock, betting the share price would fall once investors recognized the problem they found.”

The physicians are David Bredt, former neuroscience research chief at Johnson & Johnson and Eli Lilly, and Geoffrey Pitt, a cardiologist and professor at Weill Cornell Medicine. They argued that Cassava’s published research included images of experiments that seemed to have been manipulated using Photoshop or similar software. They are being represented by Jordan Thomas, partner and chair of the whistleblower representation practice at Labaton Sucharow. A second Citizen Petition was filed in October 2021.

Barbier responded in a statement in October, saying, “There is zero evidence, zero credible evidence, zero proof that I’ve ever engaged in, nor anyone I know, has ever engaged in funny business.”

He claims that short sellers — essentially betting that a stock price will go down — have lodged “outlandish accusations” against Cassava. “Under these conditions you would hope that someone in a position of authority is looking into the legitimacy of the allegations.”

Company shares have indeed been responding. After the original public petition was filed in August, company stock prices dipped as low as $42 per share. Then, the company published one of its studies in the Journal of Neuroscience, which reviewed the images and indicated they found no evidence of data manipulation. On Tuesday, November 16, shares traded at $61.69 at the end of the trading day. As of 1:04 PM ET, November 17, the shares were down by 22.1%.

Marina R. Picciotto, editor in chief of the Journal of Neuroscience and a professor at Yale School of Medicine, confirmed with the Wall Street Journal that they had found no proof of data manipulation after requesting the original source data. They did find a duplicate image in the paper, however, but a correction was issued on November 10. They said the error did not affect the conclusions of the article.

Other imaging experts have examined the images, such as Elisabeth Bik, and said she found other possible manipulated images in technical studies describing how Simufilam works. In her case, she doesn’t have a position in Cassava stock.

Mike Rossner, former managing editor of the Journal of Cell Biology and president of Image Data Integrity Inc., said the accusations merited further investigation. He also has no stake in Cassava.

Barbier criticized the analysis, telling The Wall Street Journal, “In order to make allegations on the scale that they have, in order for those allegations to be credible, you’ve got to look at the originals. Blowing up western blots and, you know, looking for funny faces or funny shapes or whatever… it doesn’t have legitimacy.”

According to Bredt and Pitt’s attorney, Jordan Thomas of Labaton Sucharow LLP, they could profit from a whistleblower tip filed with the SEC, as well as any gains from short-selling the stock.

Simufilam is designed to improve the function of a protein named filamin A, preventing the progression of Alzheimer’s disease. To date, it is the first drug candidate that targets filamin A to start a Phase III clinical trial. The second trial was announced on October 6, 2021 and is expected to begin by the end of the year.

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