AUSTIN, Texas - Cassava Sciences, Inc. (NASDAQ:SAVA), a clinical-stage biotechnology company, announced a profitable first quarter with a net income of $25 million, a significant turnaround from the $24.3 million net loss reported in the same period last year. The company attributes the positive financial results to the change in fair value of warrant liabilities, a non-cash item, despite increased costs associated with ongoing clinical trials for its Alzheimer’s disease drug candidate, simufilam.
Cassava Sciences is currently conducting two Phase 3 clinical trials for simufilam, enrolling approximately 1,900 patients with mild-to-moderate Alzheimer's disease dementia. Over 735 patients have completed the trials, and the company expects to report top-line data from the 52-week study by the end of 2024 and from the 76-week study by mid-2025.
The company's research and development expenses for the first quarter of 2024 were $16.2 million, down from $22.1 million in the same period last year, primarily due to the completion of patient screening and enrollment in fall 2023. General and administrative expenses also decreased to $3.7 million from $4.4 million, attributed to higher legal expenses being offset by insurance recoveries.
Cassava Sciences ended the quarter with $124.2 million in cash and cash equivalents, bolstered by $126.3 million in total gross proceeds from the cash exercise of warrants, which concluded on May 6, 2024. The company has no debt and anticipates a net cash use in operations for the first half of 2024 to be between $35 to $45 million.
Simufilam, Cassava Sciences’ proprietary oral drug candidate, targets altered filamin A protein in the brain, aiming to restore its normal shape and function, potentially improving health outcomes for Alzheimer's patients. The company holds exclusive worldwide rights to simufilam without royalty obligations.
InvestingPro Insights
Cassava Sciences, Inc. (NASDAQ:SAVA), despite its promising clinical advancements, presents a complex financial profile. According to InvestingPro data, the company's market capitalization stands at approximately $874.86 million, reflecting investor sentiment around its potential in the biotech industry. However, the company's P/E ratio, both on a trailing basis and adjusted for the last twelve months as of Q4 2023, is negative at -8.67 and -8.96 respectively, indicating that the company is not currently profitable.
InvestingPro Tips suggest that Cassava Sciences holds more cash than debt on its balance sheet, which aligns with the company's announcement of having $124.2 million in cash and cash equivalents at the end of the first quarter. This financial position may provide the company with a buffer to fund ongoing operations and research endeavors. Nevertheless, analysts have voiced concerns, as they do not expect the company to be profitable this year, and InvestingPro data shows a gross profit of -$89.42 million for the last twelve months as of Q4 2023. Additionally, the stock price often moves in the opposite direction of the market, which could indicate a higher level of volatility and risk for investors.
For those interested in deeper analysis, there are additional InvestingPro Tips available, including insights into the company's Price / Book multiple, which is high at 6.34, and the fact that Cassava Sciences does not pay a dividend to shareholders. Subscribers to InvestingPro can access these insights and more to make informed investment decisions. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and discover the full range of 9 InvestingPro Tips for Cassava Sciences, Inc.
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