aibioCassava Sciences (now Filana Therapeutics) cuts 33% of workforce, reports $128.6 million cash
Tickers FLNA
After its Phase 3 ReThink-ALZ study of simufilam missed its co-primary endpoints, Cassava is cutting 10 employees, or 33% of its staff, at a one-time cost of about $0.4 million. It reported unaudited cash of about $128.6 million at December 31, 2024.
Key facts
- Company
- Filana Therapeutics, Inc. (NASDAQ: FLNA)
- News type
- Distress
- Primary source
- FILANA THERAPEUTICS, INC. Form 8-K filed January 7, 2025 (SEC EDGAR)
Cassava Sciences, Inc. (now Filana Therapeutics) said on January 7, 2025 that it is cutting its workforce by 10 employees, a reduction of 33%, after topline results from its Phase 3 ReThink-ALZ study of simufilam in mild-to-moderate Alzheimer's disease did not meet the study's prespecified co-primary endpoints. The company disclosed the cuts in a Form 8-K under Items 2.02, 2.05 and 8.01. In the same filing it said its unaudited cash and cash equivalents balance as of December 31, 2024 was approximately $128.6 million.
A failed trial and a smaller company
The 8-K recalls that on November 25, 2024 Cassava reported that ReThink-ALZ did not meet its prespecified co-primary endpoints. On the same date the company decided to discontinue its second Phase 3 study, ReFocus-ALZ, and an open-label extension study. The filing lists the wind-down of those studies as ongoing.
In light of those results, the company announced the workforce reduction on January 7, 2025 and told affected employees the same day. Cassava estimates it will incur approximately $0.4 million of one-time costs, primarily severance payments. It expects the reduction to be completed, and most of those costs incurred, during the first quarter of 2025. The company says it intends to share detailed ReThink-ALZ results at a future medical meeting, and the 8-K gives no date. It does not describe any new trial of simufilam.
Cash and what the filing leaves out
The $128.6 million figure is unaudited and was given in a business update, attached to the 8-K as a press release. The 8-K does not give a 2024 net loss, cash used in operations or a runway estimate. The company's annual report for 2023, filed February 28, 2024, says Cassava has incurred significant net losses in each period since its inception and expects to keep incurring net losses for the foreseeable future.
The program that failed
That annual report describes Cassava as a clinical-stage biotechnology company based in Austin, Texas, focused on detecting and treating neurodegenerative diseases such as Alzheimer's disease. Simufilam is an oral drug candidate that targets an altered form of a protein called filamin A (FLNA) in the Alzheimer's brain. At the time, the company was running two randomized, placebo-controlled Phase 3 trials, both fully enrolled, with a total of approximately 1,900 patients with mild to moderate Alzheimer's disease randomized at baseline. All efficacy data were then still blinded, with no interim analyses on efficacy.
The report says Cassava holds exclusive, worldwide rights to its drug and diagnostic assets with no royalty obligations to any third party. Patent protection for simufilam runs through 2039 and includes nine issued U.S. patents. Its investigational diagnostic, SavaDx, is described as a way to detect Alzheimer's disease from a small blood sample.
Lawsuits and government inquiries
The 2023 annual report also describes legal exposure that predates the trial result. On November 15, 2021, the company disclosed that certain government agencies had asked it for corporate information and documents. Cassava says it is cooperating, that no agency has told it of evidence of research misconduct or wrongdoing, and that no agency has filed claims or charges.
Between August 27, 2021 and October 26, 2021, four putative class action lawsuits were filed in the U.S. District Court for the Western District of Texas against the company and certain named officers. The complaints allege that statements about simufilam were materially false and misleading, relying on allegations in Citizen Petitions to the FDA, which the FDA denied. A federal judge consolidated the cases on June 30, 2022, and the lead plaintiff filed a consolidated amended complaint on August 18, 2022. These are allegations. The company blames many of its legal matters on what it calls a short selling attack campaign that began in 2021.
Who signed
Chief Financial Officer Eric J. Schoen signed the January 7, 2025 report. The 2023 annual report was signed by Remi Barbier as chairman of the board, president and chief executive officer.