Cassava’s stock dives 21% after report citing alleged criminal probe of data from Alzheimer’s drug trial

Shares of Cassava Sciences Inc. SAVA, -13.95% plunged 21.0% in trading on Wednesday after Reuters reported that the Justice Department is investigating whether the company manipulated clinical data for a still-investigational Alzheimer’s disease drug, citing people familiar with the matter. Cassava put out a news release in December that said a scientific journal did not find evidence of manipulated data in a 2005 paper authored by the company’s scientists after short sellers alleged data manipulation in some previously published research. Cassava’s Alzheimer’s drug candidate is currently in Phase 3 clinical trials. The company released a statement on Wednesday afternoon saying no government agency has told the company it “engaged in any wrongdoing” and that Cassava has “voluntarily been cooperating with government authorities.” Cassava’s stock has tumbled 50.3% this year, while the S&P 500 SPX, +2.62% has declined 16.7%.