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Cassava Sciences & Cryptocurrency


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RECAP OF LAST WEEK AND RESULTS:


KemPharm: KemPharm rose with the biotech industry last week. They went from $9 to $10 over the week. The company is making a comeback with another FDA approval under its belt and solid partnership for the commercial launch of their non-abuse ADHD drug. Vyvanse and other competitors better watch out for this comeback kid! We expect growth in the stock price towards the back half of the year as the commercial launch rolls out.


Cardano: We covered why we think this will be a profitable coin for holders. We saw a large swing down in the crypto market. It went from $2 a coin to $1.30 a coin in the crash this past week. Due to multitudes of big influences such as Elon Musk suspending bitcoin payments with Tesla for energy concerns and news circulating from China about banning crypto mining and practices with crypto.


IN THIS ISSUE


Cassava Sciences Inc.

Momentum is building into the results of their Alzheimer’s drug efficacy over 12 months. If it is shown to be effective we should see a large increase in share price. A competitor (ANVS) released phase 2 results Friday and the stock rocketed over 265%. The interest in solving and treating Alzheimer's is very prevalent today. We think this stock could go back over $125 a share on positive news.


Cryptocurrency Market

Downward price pressure as Tesla suspends bitcoin payments and China tightens grip on crypto with talks of banning mining and other aspects to the currency.

Cassava Sciences Inc.: SAVA

This company aims to defeat Alzheimer’s disease. The number of patients is expected to double in the coming years. Their drug named Simufilam has shown not only improved states for Alzheimer’s disease but has 11 total biomarkers that it improved shown in their phase 2 study. The drug has shown to be very safe in the initial studies. The placebo group (the ones who receive a fake dose) had more adverse effects and events than the patients taking the drug. This shows the safety which is always necessary for a drug that will be approved by the FDA in the future. There are no current drugs that can treat Alzheimer’s effectively. They also have a product in work for early detection of the disease as well. 



Cassava skyrocketed to $117 a share on its P2 drug results in February. It has now come back to $50 a share. We think it’s an opportune time to enter since it fell due to selling on the news after such a large run. Then there was a long period where all of the money in the biotech sector was being rotated out. We think it will be starting to come back.


Overview of the Science - Simplified!

Since Alzheimer’s is an incredibly complex disease, Cassava has stated that they believe treating it is a multi-treatment approach. They believe one ingredient to treating Alzheimer’s is with targeting Amyloids. They have shown with their drug that they have isolated one feature in the brain called “Filamin A” which becomes deviated. They think that this deviation of this protein causes it to tell the brain to emit two types of toxins that cause inflammation and degeneration of the brain, therefore, causing a cascade of Alzheimer’s. They aim to fix this deviation of this protein and put it back into place with an oral tablet twice a day. Current Results show convincing evidence that this is helping improve Alzheimer’s. They are actively watching for these indications and have worked with the FDA to get it approved for Alzheimer’s and other cognitive performance needs. We highly suggest you watch their HC Wainwright Conference presentation to understand where they are at. Here is their most updated presentation.

The largest catalyst in the near term for Cassava is an interim open-label study (patients know that they are taking the real drug) that will demonstrate the efficacy of the drug on patients for 12 months. This is in our opinion a landmark milestone for this company as it will be the first company ever to show that their drug maintains/improves the condition of the Alzheimer’s patient for more than six months. Long-term use of this drug would multiply the value of this company as it would be the first drug ever to effectively treat Alzheimer’s.


The company stated that they would release the results of this data in mid-2021 and that is where we are today. They could release results from now until late July.


Main Competitors:

Biogen (BIIB) - Has the furthest along with Alzheimer’s disease medication in clinical trials they finished their phase 3 trial (the last trial needed) but are now in the process of submitting their results to the FDA. They had failed their Phase 2 results and then redesigned the study finally passing it on to P3. Cassava & Annovis have shown better efficacy in their drug.

Annovis (ANVS) - Recently announced a short-term efficacy that was a bit better than Cassava, however, they do not have the 11 biomarkers that have improved along with their drug. They also do not have any long-term data suggesting it will work past 6 months. Annovis believes that neurotoxins are the reason that Alzheimer’s exists in patients as well.

Potential Future Competitors:

Cortexyme (CRTX) - This company believes that Alzheimer’s is caused by a bacteria called P-Gingivalis. They IPO’d in 2019 and are working on the path to clinical trials

Anavex Life Sciences (AVLX) - This company believes that Alzheimer’s starts before the Amyloids. They say that there is a multitude of symptoms in the brain, they think that the problem lies before the Amyloid sequence. They are testing a drug aiming at recruiting Sigma-1 receptors which is a mysterious protein not much is known about.


Final Thoughts on Competition:

The CEO of Cassava and the company states that any win in Alzheimer’s is a win for everyone because of the need and how it will increase interest in finally solving the disease. We think this is relevant because as Annovis jumped in share price, all of the other Alzheimer stocks moved with it (with much less movement but they rose a few percentage points on Friday).


Price Forecast:

Current Price: $50.00 Open-Label Study Results in Target: $125

After seeing Annovis skyrocket 265% on 1 month of improvement data, the enthusiasm for Alzheimer’s disease is extremely high. One Year Target: $90

We think after the target mid-term data cut is released, the stock will drop and balance around $90. Two Year Target: $150

We think this stock will rise right before the release of their Topline P3 results of their drug which they will submit to the FDA.

The company has no debt and 280 Million in cash, they have stated that they will have enough money until after they complete their Phase 3 study which should be sometime in early 2023. This means they won’t dilute shares, or artificially decrease the stock price to raise more cash anytime soon.

This stock is a buy and sell on the news.

Cryptocurrency Market

We wanted to talk about what has been going on in the world of cryptocurrency since the last two articles contained information on the market as a whole as well as Cardano. We are going to mention Bitcoin a lot in this overview just since crypto tends to follow bitcoin fairly closely. Starting May 12th we had the first drop, and it rebounded quickly. However, over the past week Bitcoin dropped 26% and Ethereum dropped 38.80%. Bitcoin touched all the way down to $29,500 and when moving back up is hitting significant resistance around $43,000.


We have been watching the market to determine if we are still in a bull market or if we are transitioning into a bear market. Bitcoin’s 200-day moving average is near $40,000 and If we stay below that we are expecting the market to move overall in a downward direction. We wouldn't be shocked if BTC drops down to test its major support at $20,000. Cryptocurrency has always been a higher risk to us which means there could be some huge returns but also some big losses as well. Now the market did move down a good amount, however, if you take a look at the past year’s charts you will see some insane percentages. 17 coins have increased over 1000% in the last year.

Why Crypto “Crashed”:

Bitcoin crashed for a couple of reasons, one being China’s firm stance on cryptocurrencies and Elon Musk tweeting. “On May 12, Musk said the electric carmaker had suspended vehicle purchases using bitcoin, citing environmental concerns over the so-called computational 'mining' process.” This was the main factor leading to the drop, Elon Musk and Tesla offering a way to purchase a Tesla vehicle with bitcoin was a way for Elon to demonstrate the usefulness of BTC.

The other reason was this: “Then on Tuesday, three Chinese banking and payment industry bodies issued a statement warning financial institutions not to conduct virtual currency-related business, including trading or exchanging fiat currency for cryptocurrency.” This along with the panic drove the price down even further.


Moving Forward

We have reduced our position sizes in several of our crypto coins but will look to re-enter as we move down. Keep an eye on bitcoin as an indicator for where the market is heading. If BTC hits $20,000 we would look to buy in at that price because we believe it will take a large reason to move past that line of support. If BTC jumps up this weekend and the 200-day moving average is above $40,000, the bull market may continue. The Altcoins are a little different, we would look into them and make sure there is more to them than a meme. Such as Cardano which looks to hopefully challenge Ethereum.

All stocks talked about we have invested in, and do not intend to give advice nor recommend acting upon the information.

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Until next week,


Brad Mitchell

Colby McCoy

and the Optifinancial Team

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