Cassava to Pay $40 Million to SEC Over Alzheimer's Drug Lawsuits

(Bloomberg) — Drugmaker Cassava Sciences Inc. and two former executives agreed to pay more than $40 million to resolve U.S. Securities and Exchange Commission allegations that they misled the public about Alzheimer's success -drug trial deceived.

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Cassava published results in 2020 based on hand-picked data that showed improvement in patients' memory, although the full data did not show measurable progress, the SEC said Thursday in a statement announcing the settlement. The company later raised hundreds of millions of dollars in funding, the regulator said.

“Our capital markets can and should be a powerful driver of innovation in the development of new and potentially life-changing therapeutics,” said Mark Cave, deputy director of the SEC’s Division of Enforcement.

The company, which the SEC accuses of violating anti-fraud provisions of the federal securities laws, will absorb the bulk of the penalty – $40 million – in a deal subject to a judge's approval, the regulator said.

Former CEO Remi Barbier agreed to pay $175,000 for his role in the disclosure, the agency said. And Lindsay Burns, Cassava's former senior vice president of neuroscience, who oversaw the data, reached a settlement for $85,000. She and the company did not admit or deny any wrongdoing, the SEC said.

The Austin-based company, which previously disclosed a Justice Department investigation, said it has taken steps to improve corporate governance and transparency and does not expect criminal charges. “Cassava is pleased to put this matter behind us,” its new CEO, Richard Barry, said in a statement.

There was no immediate response to messages seeking comment from lawyers for Barbier and Burns.

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