sava20240331

sava20240331_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

	(Mark One)
	☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ___________ to ___________

Commission File Number: 000-29959

Cassava Sciences, Inc.

(Exact name of registrant as specified in its charter)

	Delaware	91-1911336
	(State or other jurisdiction of	(I.R.S. Employer
	incorporation or organization)	Identification Number)

6801 N. Capital of Texas Highway, Building 1; Suite 300, Austin, TX 78731

(512) 501-2444

(Address, including zip code, of registrant’s principal executive offices and

telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value

SAVA

Nasdaq Capital Market

Warrants, exercisable for shares of Common Stock

SAVAW

Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large Accelerated Filer ☑	Accelerated Filer ☐
	Non-accelerated Filer ☐	Smaller Reporting Company ☐
		Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

	Common Stock, $0.001 par value	47,976,166
		Shares Outstanding as of May 8, 2024

		Page No.
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets – March 31, 2024 and December 31, 2023	3

	Condensed Consolidated Statements of Operations – Three Months Ended March 31, 2024 and 2023	4

	Condensed Consolidated Statements of Changes in Stockholders’ Equity - Three Months Ended March 31, 2024 and 2023	5

	Condensed Consolidated Statements of Cash Flows – Three Months Ended March 31, 2024 and 2023	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42

Item 4.	Controls and Procedures	43

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	43

Item 1A	Risk Factors	43

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43

Item 3.	Defaults Upon Senior Securities	43

Item 4.	Mine Safety Disclosures	43

Item 5.	Other Information	43

Item 6.	Exhibits	44

Signatures	45

	*March 31, 2024*			*December 31, 2023*

*ASSETS*
Current assets:
Cash and cash equivalents	$	124,169		$	121,136
Prepaid expenses and other current assets		9,830			8,497
Total current assets		133,999			129,633
Property and equipment, net		21,604			21,854
Intangible assets, net		115			176
Total assets	$	155,718		$	151,663

*LIABILITIES AND STOCKHOLDERS' EQUITY*
Current liabilities:
Accounts payable and accrued expenses	$	9,603		$	10,573
Accrued development expense		1,797			3,037
Accrued compensation and benefits		228			200
Warrant liabilities		65,368			—
Other current liabilities		125			385
Total current liabilities		77,121			14,195
Commitments and contingencies (Notes 9, 10 and 11)
Stockholders' equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized, none issued and outstanding		—			—
Common stock, $0.001 par value; 120,000,000 shares authorized; 43,248,416 and 42,236,919 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		43			42
Additional paid-in capital		434,280			518,195
Accumulated deficit		(355,726	)		(380,769	)
Total stockholders' equity		78,597			137,468
Total liabilities and stockholders' equity	$	155,718		$	151,663

	*Three months ended*
	*March 31,*
	*2024*			*2023*
Operating expenses:
Research and development	$	16,233		$	22,120
General and administrative		3,701			4,392
Total operating expenses		19,934			26,512
Operating loss		(19,934	)		(26,512	)
Interest income		1,776			2,051
Other income, net		160			190
Gain from change in fair value of warrant liabilities		43,041			—
Net income (loss)	$	25,043		$	(24,271	)
Shares used in computing net income (loss) per share, basic		43,001			41,739
Net income (loss) per share, basic	$	0.58		$	(0.58	)
Numerator, diluted:
Net income (loss)	$	25,043		$	(24,271	)
Adjustment for change in fair value of warrant liabilities		(43,792	)		—
Adjusted numerator, diluted	$	(18,749	)	$	(24,271	)
Shares used in computing net loss per share, diluted		44,102			41,739
Net loss per share, diluted	$	(0.43	)	$	(0.58	)

											*Total*
	*Common stock*				*Additional*			*Accumulated*			*stockholders'*
	*Shares*		*Par value*		*paid-in capital*			*deficit*			*equity*
Balance at December 31, 2022		41,735,557	$	42	$	511,049		$	(283,552	)	$	227,539
Stock-based compensation for:
Stock options for employees		—		—		650			—			650
Stock options for non-employees		—		—		23			—			23
Issuance of common stock pursuant to exercise of stock options		13,878		—		64			—			64
Net loss		—		—		—			(24,271	)		(24,271	)
Balance at March 31, 2023		41,749,435	$	42	$	511,786		$	(307,823	)	$	204,005

Balance at December 31, 2023		42,236,919	$	42	$	518,195		$	(380,769	)	$	137,468
Stock-based compensation for:
Stock options for employees		—		—		2,312			—			2,312
Stock options for non-employees		—		—		23			—			23
Issuance of warrants		—		—		(113,363	)		—			(113,363	)
Issuance of common stock pursuant to exercise of warrants		1,011,497		1		22,159			—			22,160
Derecognition of warrant liabilities upon exercise of warrants		—		—		4,954			—			4,954
Net income		—		—		—			25,043			25,043
Balance at March 31, 2024		43,248,416	$	43	$	434,280		$	(355,726	)	$	78,597

	*Three months ended March 31,*
	*2024*			*2023*
Cash flows from operating activities:
Net income (loss)	$	25,043		$	(24,271	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		2,335			673
Gain from change in fair value of warrant liabilities		(43,041	)		—
Depreciation		250			272
Amortization of intangible assets		61			119
Changes in operating assets and liabilities:
Prepaid and other current assets		(1,333	)		2,679
Operating lease right-of-use assets and liabilities		—			(17	)
Accounts payable and accrued expenses		(970	)		4,565
Accrued development expense		(1,240	)		2,996
Accrued compensation and benefits		28			42
Other liabilities		(260	)		(313	)
Net cash used in operating activities		(19,127	)		(13,255	)
Cash flows from investing activities:
Purchases of property and equipment		—			(357	)
Net cash used in investing activities		—			(357	)
Cash flows from financing activities:
Proceeds from exercise of common stock warrants, net of exercise costs		22,160			—
Proceeds from issuance of common stock upon exercise of stock options		—			64
Net cash provided by financing activities		22,160			64
Net increase (decrease) in cash and cash equivalents		3,033			(13,548	)
Cash and cash equivalents at beginning of period		121,136			201,015
Cash and cash equivalents at end of period	$	124,169		$	187,467

Supplemental cash flow information:
Non-cash financing activities
Issuance of warrants resulting in recognition of warrant liabilities		113,363			—
Derecognition of warrant liabilities upon exercise of warrants		(4,954	)		—

Exercise price per warrant	$	33.00
Conversion rate - common shares per warrant		1.50
Closing price of common stock	$	23.72
Volatility		75	%
Risk-free interest rate		5.40	%
Expected life of option (in years)		0.3
Dividend yield	zero

	*March 31,*		*December 31,*
	*2024*		*2023*
Prepaid insurance	$	382	$	759
Contract research organization and other deposits		8,231		6,489
Interest receivable		1,000		962
Other		218		287
Total prepaid expenses and other current assets	$	9,830	$	8,497

For the year ending December 31,
2024	$	111
2025		4
Total amortization	$	115

	*Stock Options*		*Performance Awards*
Outstanding as of December 31, 2023		3,039,029		7,142
Options granted		3,000		—
Options exercised		—		—
Options forfeited/canceled		—		—
Outstanding as of March 31, 2024		3,042,029		7,142

	*Number of Common Stock Warrants*		*Common Stock Warrant Liability*
Distribution of common stock warrants		16,895		$ 113,363
Warrants exercised		(674)		(4,954)
Gain from change in fair value of warrant liabilities		—		(43,041)
Balance as of March 31, 2024		16,221		$ 65,368

	*March 31,*			*December 31,*
	*2024*			*2023*
Land	$	3,734		$	3,734
Buildings		15,980			15,980
Site improvements		494			494
Tenant improvements		3,062			3,062
Furniture and equipment		868			868
Gross property and equipment	$	24,138		$	24,138
Accumulated depreciation		(2,534	)		(2,284	)
Property and equipment, net	$	21,604		$	21,854

	●	the expected safety profile or treatment benefits, if any, of simufilam for people with Alzheimer’s disease in our on-going Phase 3 studies;
	●	our reliance on third-party contractors to conduct all of our clinical and non-clinical trials and to make drug supply on a large-scale for our Phase 3 clinical program, or their ability to do so on-time or on-budget;
	●	limitations around data interpretation from results of any of the three clinical phases of our 2-year safety study of simufilam in patients with Alzheimer’s disease, as compared to clinical results from randomized controlled trials;
	●	the ability of clinical scales to assess cognition or health in our trials of Alzheimer’s disease;
	●	any significant changes we may make, or anticipate making, to the design of any of our on-going Phase 3 studies of simufilam in patients with Alzheimer’s disease;
	●	our ability to initiate, conduct or analyze additional clinical and non-clinical studies with our product candidates targeted at Alzheimer’s disease and other neurodegenerative diseases;
	●	the impact of pre-clinical findings on our ability to develop our product candidates;
	●	the interpretation of results from our pre-clinical or early clinical studies, such as Phase 1 and Phase 2 studies;
	●	our plans to further develop SavaDx, our investigational blood-based diagnostic product candidate;
	●	our ability or willingness to expand therapeutic indications for simufilam outside of Alzheimer’s disease;
	●	the safety, efficacy, or potential therapeutic benefits of our product candidates;
	●	our use of exploratory ‘research use only’ non-safety related biomarkers in our clinical studies;
	●	our ability to file for and obtain regulatory approval of our product candidates;
	●	our strategy and ability to establish an infrastructure to commercialize any product candidates, if approved;
	●	the potential future revenues of our product candidates, if approved and commercialized;
	●	the market acceptance of our product candidates, if approved and commercialized;
	●	the pricing and reimbursement of our product candidates, if approved and commercialized;
	●	the utility of protection, or the sufficiency, of our intellectual property;
	●	our potential competitors or competitive products for the treatment of Alzheimer’s disease;
	●	our need to raise new capital from time to time to continue our operations or to expand our operations;

	●	our use of multiple third-party vendors and collaborators, including a Clinical Research Organization ("CRO"), to conduct clinical and non-clinical studies of our lead product candidate;
	●	expectations regarding trade secrets, technological innovations, licensing agreements and outsourcing of certain business functions;
	●	our expenses or incurred costs increasing by material amounts in excess of budgeted amounts due to unexpected cost overruns, inflation, imperfect forecasting, increased scope of activities or other causes;
	●	fluctuations in our financial or operating results;
	●	our operating losses, anticipated operating and capital expenditures and legal expenses;
	●	expectations regarding the issuance of shares of common stock, options or other equity to employees or directors pursuant to equity compensation awards, net of employment taxes;

	●	expectations regarding the issuance of shares of common stock to holders of outstanding warrants that are exercised for cash;
	●	the development and maintenance of our internal information systems and infrastructure;
	●	our ability to minimize the likelihood and impact of adverse cybersecurity incidents in our information systems and infrastructure;
	●	our need to hire additional personnel and our ability to attract and retain such personnel;
	●	existing or emerging regulations and regulatory developments in the United States and other jurisdictions in which we operate;
	●	our plans to expand the size and scope of our operations;
	●	the sufficiency of our cash resources to continue to fund our operations;
	●	potential future agreements with third parties in connection with the commercialization of our product candidates;
	●	the accuracy of our estimates regarding expenses, capital requirements, and needs for additional financing;
	●	assumptions and estimates used for our disclosures regarding stock-based compensation;
	●	the expense, timing and outcome of pending or future litigation or other legal proceedings and claims, including U.S. government inquiries; and
	●	litigation, claims or other uncertainties that may arise from allegations made against us or our collaborators.

	●	our lead therapeutic product candidate, called simufilam, is a novel oral treatment for Alzheimer’s disease dementia; and
	●	our lead investigational diagnostic product candidate, called SavaDx, is a novel way to detect the presence of Alzheimer’s disease from a small sample of blood.

	►	Other endpoints include plasma biomarkers of disease and NPI, a clinical tool that assesses the presence and severity of dementia-related behavior.
	►	No interim analyses on efficacy are planned.

	●	continue our ongoing Phase 3 program with simufilam;
	●	manufacture large-scale supplies for simufilam;
	●	conduct other preclinical and clinical studies for our product candidates;
	●	seek regulatory approvals for our product candidates;
	●	develop, formulate, manufacture and commercialize our product candidates;
	●	implement additional internal systems and develop new infrastructure;
	●	acquire or in-license additional products or technologies, or expand the use of our technology;
	●	maintain, defend and expand the scope of our intellectual property;
	●	incur costs related to legal proceedings and claims, including U.S. government inquiries; and
	●	hire additional personnel.

	Three months ended
	March 31,
	2024		2023
Clinical trials	$	11,292	$	18,264
Pre-clinical projects		1,132		1,070
Chemical, Manufacturing and Controls costs (“CMC costs”)		795		714
Personnel related		1,645		1,425
Stock-based compensation		973		389
Other		396		258
	$	16,233	$	22,120

	●	clinical trials,
	●	pre-clinical testing,
	●	clinical supplies and related formulation and design costs, and
	●	compensation and other personnel-related expenses.

		Incorporated by
		Reference
Exhibit	Description		Filing	Exhibit	Filed
No.		Form	Date	No.	Herewith
3.1	Amended and Restated Certificate of Incorporation.	10-Q	7/29/2005	3.1
3.2	Certificate of Amendment of Restated Certificate of Incorporation.	8-K	5/8/2017	3.1
3.3	Certificate of Amendment of Restated Certificate of Incorporation.	10-K	3/29/2019	3.3
3.4	Amended and Restated Bylaws of Cassava Sciences, Inc.	8-K	9/13/2023	3.4
4.1	Warrant Agreement (including Form of Warrant), dated January 3, 2024, between Cassava Sciences, Inc., Computershare Inc., and Computershare Trust Company, N.A.	8-K	1/3/2024	4.1
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
32.1+	Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X
101.INS	Inline XBRL Instance Document - (the instant document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).				X
101.SCH	Inline XBRL Taxonomy Extension Schema Document.				X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.				X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.				X
101.LAB	Inline XBRL Taxonomy Extension Labels Linkbase Document.				X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.				X
104.	Cover Page Interactive Data File –(formatted as Inline XBRL and contained in Exhibit 101).				X

	Cassava Sciences, Inc.
	(Registrant)

	/s/ REMI BARBIER
	Remi Barbier,
	Chairman of the Board of Directors,
	President and Chief Executive Officer
Date: May 10, 2024	(Principal Executive Officer)




	/s/ ERIC J. SCHOEN
	Eric J. Schoen,
	Chief Financial Officer
Date: May 10, 2024	(Principal Financial and Accounting Officer)

SEC Form 10-Q filed by Cassava Sciences Inc.