SEC v. Cassava Sciences, Inc.; Remi Barbier; and Lindsay Burns, No. 1:24-cv-01150, Western District of Texas (Sept. 26, 2024) — Complaint

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UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v. Case No. 24-cv-1150
CASSAVA SCIENCES, INC.; REMI
BARBIER; and LINDSAY BURNS,
JURY TRIAL DEMANDED
Defendants.
COMPLAINT
Plaintiff Securities and Exchange Commission (“SEC” or “Commission”)
alleges as follows:
SUMMARY
1.This  case  involves  Defendant  Cassava  Sciences,  Inc.’s  (“Cassava”)
misleading statements about the results of its Phase 2b clinical trials for Cassava’s
drug  candidate  PTI-125,
1
  a  potential  therapy  for  the  treatment  of  Alzheimer’s
disease,  and  the  role  of  Defendants  Remi  Barbier,  Cassava’s  founder  and  former
Chairman and CEO, and Dr. Lindsay Burns, Cassava’s former Senior Vice President
1
 PTI-125 is also known as simufilam.

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of  Neuroscience,  in  those  disclosures.  The  announced  final  Phase  2b  results  were
misleading in five ways.
2. First, Cassava claimed   that   “[b]ioanalyses   were   conducted   under
blinded  conditions  to  eliminate  any  possibility  of  bias.”  That  statement  negligently
omitted material information. Dr. Hoau-Yan Wang, a professor at City University of
New York (“CUNY”), ran clinical laboratory tests on Cassava’s behalf for Phase 2b.
Before  Dr.  Wang  began  running  the  bioanalyses,  Dr.  Burns  negligently provided
information sufficient to allow Dr. Wang to partially unblind himself.
3. Second, Defendants  negligently did  not  disclose  that  the  announced
results of the bioanalyses were performed by Dr. Wang, the co-inventor of PTI-125,
Cassava  consultant,  and  member  of  Cassava’s  Scientific  Advisory  Board.  Instead,
public filings with the SEC referred to Dr. Wang’s laboratory at CUNY generally as
an   “academic   lab,”   which   although   technically   correct,   was incomplete   and
misleading. By Cassava failing to name Dr. Wang, investors were not made aware
that  the  scientist  performing  the  analysis  had  a  conflict  of  interest  due  to  his
professional and financial ties to Cassava.
4. Third, Cassava conducted an audit of Dr. Wang’s    laboratory at CUNY
in  2022,  and  Cassava  and  Barbier  negligently did  not  disclose  the  audit  report’s
finding  that  Dr.  Wang’s  laboratory  was “unacceptable  and temporarily  not
qualified  to  provide  biomarker  analysis  and  research  for  services  for  any  future
Cassava studies.” (Emphases in original).

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5. Fourth,  Cassava and  Dr.  Burns  negligently failed  to  fully disclose  Dr.
Burns’s removal of a large portion of patients in reported cognition data. The reported
episodic  memory  results  excluded  data  from  40%  of  patients who  completed  the
cognition test. Cassava and Dr. Burns failed to disclose the average change in errors
from baseline to day 28 for the full episodic memory data set (i.e., -3.4 points for the
placebo group, -2.8 points for the 50 mg group, and -0.0 points for the 100mg group),
which showed  no  similar  directional  improvement  for  either  the  50  mg  or  100  mg
group compared with placebo. And Cassava and Dr. Burns did not disclose that Dr.
Burns was unblinded when she decided which patients to exclude from the reported
results.
6. Fifth,  Cassava  and  Dr.  Burns  negligently failed  to  disclose  that  the
spatial working memory measurement reported in the Phase 2b results as showing
cognitive improvement of up to 46% was a measurement selected by Dr. Burns only
after  she  was  unblinded.  Cassava  and  Dr.  Burns  also failed  to  disclose  that  other
spatial working memory results, including measurements identified as “key” prior to
unblinding, did  not  show  directional  improvement  in  patients  receiving  PTI-125
compared with placebo.
7. In  September  2020,  Cassava  announced  final  Phase  2b  results  that
claimed  that  PTI-125  taken  for  28  days  significantly  improved  every  measured
biomarker  for  Alzheimer’s  disease  compared  with  subjects  who  took  a  placebo.
Cassava also announced that patients who took PTI-125 showed improved cognition
compared to patients who took the placebo.

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8. Remi  Barbier,  Cassava’s  founder  and  former  Chairman  and  CEO,
participated in making Cassava’s misleading statements about Phase 2b. In addition
to  providing  information  sufficient  to  partially  unblind  Dr.  Wang,  Dr.  Burns  was
responsible for compiling misleading Phase 2b cognition results.
9. After  Cassava  reported  its  Phase  2b  trial  results,  the  company  raised
more than $260M in new funding.
JURISDICTION AND VENUE
10. The SEC brings  this  action  pursuant  to  the  authority  established  in
Sections 20(b) and 20(d) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §
77t(b) and (d)].
11. This Court has jurisdiction over this action pursuant to Section 22(a) of
the Securities Act [15 U.S.C. § 77v(a)].
12. Venue  is  proper  in  this  district  pursuant  to  Section  22(a)  of  the
Securities  Act  [15  U.S.C.  §  77v(a)],  because  Cassava  is  headquartered  within  this
District, and Dr. Burns and Barbier reside within this District.
13. Defendants,  directly  or  indirectly,  have  made  use  of  the  means  or
instruments  of  transportation  or  communication  in  interstate  commerce  or  of  the
mails  in  connection  with  the  transactions,  acts,  practices,  and  courses  of  business
alleged herein.
DEFENDANTS
14. Cassava  Sciences,  Inc.  (“Cassava”) is  a  Delaware  corporation  with
its principal place of business in Austin, Texas. Cassava is a pharmaceutical company

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with one primary drug candidate, PTI-125, a potential therapeutic for the treatment
of Alzheimer’s  disease.  Cassava’s  shares  are  registered  with  the  Commission
pursuant to Securities and Exchange Act of 1934 (“Exchange Act”) Section 12(b) and
are listed on the Nasdaq Capital Market under the symbol “SAVA.”
15. Remi Barbier,  age  64,  is the  Founder,  and  was  Chair,  and  Chief
Executive Officer of Cassava until July 2024. He is a resident of Austin, Texas.
16. Dr.   Lindsay   Burns,   age   59,   was   the   Senior Vice   President   of
Neuroscience  at  Cassava  until  July  2024.  She  is  a  resident  of  Austin,  Texas.  Dr.
Burns co-invented PTI-125 with Dr. Wang.
OTHER RELEVANT PARTY
17. Dr.  Hoau-Yan  Wang,  age  67,  is  a  tenured  associate  professor  at  the
City  University  of  New  York’s  School  of  Medicine.  Dr.  Wang  co-invented PTI-125
along with Dr. Burns. Dr. Wang served on Cassava’s Scientific Advisory Board, and
Cassava retained Dr. Wang as a paid consultant until the company terminated his
consulting agreement in June 2024.
FACTS
A. Cassava’s Background
18. Barbier  founded  the  company  now  known  as  Cassava  in  1998.  The
relationship between the company now known as Cassava and Dr. Wang dates back
to the early 2000s.  Dr. Wang served as a consultant to the company until June 2024.
19. Dr. Burns was Dr. Wang’s main point of contact at Cassava. Dr. Burns
and  Dr.  Wang  collaborated  as  co-authors on multiple scientific journal articles and

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grant applications throughout the time that Dr. Wang served as a consultant to the
company.
20. Dr. Wang and Dr. Burns discovered the molecule PTI-125, later named
simufilam,  which  they  claim  binds  to  altered Filamin  A  proteins  and  remediates
Alzheimer’s disease-related pathology.
B. Cassava’s Initial PTI-125 Trials
21. Clinical  trials  for  a  new  drug  usually  proceed  through  three  phases
before the FDA will consider a New Drug Application.
22. In   2017,   the   FDA   cleared   Cassava’s   Investigational   New   Drug
application for PTI-125, which allowed Cassava to begin clinical trials of the drug in
humans. That same year, Cassava completed a Phase  1  human  safety  trial  of  PTI-
125.
23. In  2019,  Cassava  ran  what  it  called  a  Phase  2a  trial,  consisting  of 13
Alzheimer’s patients who all took doses of PTI-125 for 28 days. There was no placebo
group.
24. One key objective of Cassava’s Phase 2a trial was to measure changes
in concentration of biomarkers—substances in cerebrospinal fluid (“CSF”) believed to
correspond    with    Alzheimer’s    disease    pathology,    neuroinflammation, and
neurodegeneration.  To  measure  changes  in  biomarkers,  CSF  was  collected  from
patients before taking the drug and again after 28 days of treatment.
25. Cassava asked Dr. Wang to analyze the CSF samples collected from the
Phase  2a  participants.  According  to  Dr.  Wang’s  results,  all  13  patients  showed

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directional improvements in multiple biomarkers, suggesting that the drug may be
causing changes in biomarker levels.
26. In  public  announcements  and  SEC  filings,  Cassava disclosed  that  Dr.
Wang and his laboratory at CUNY performed the biomarker tests for Phase 2a.
C. Cassava’s Phase 2b Trial
27. In  2019,  Cassava  designed  and  began  its  Phase  2b  clinical  trial.  That
trial ultimately included 64 patients separated into three groups—one placebo group,
one group taking a 50mg dose, and another group taking a 100mg dose. Each patient
in each group was to take their respective treatment for 28 days.
28. Phase  2b  was  to  be  conducted  as a double-blinded clinical trial, which
means  neither  the  patient  nor  the  tester  is  aware  which  patient  received  which
treatment. Blinding is a standard practice in many clinical trials, in part because it
helps reduce the potential impact of bias.
29. Participants  in  Phase  2b  had  CSF  drawn  before  treatment  began  and
again after 28 days of treatment. Pursuant to the testing protocol, Cassava directed
each clinical site to send patient CSF samples to the CUNY laboratory in New York
where Dr.  Wang  performed  research  to  be  stored  before  laboratory  analysis.
Laboratory  results  were  to  be  sent  directly  to  Dr.  Burns  who  then  was  to  forward
them to a biostatistics company hired by Cassava to compile unblinded results.
30. Participants  in  Phase  2b  also  took  a  battery  of cognition  tests before
treatment  and  then  again  after  28  days  to  assess  any changes  in  cognition. Those

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results were also sent first to Dr. Burns who then forwarded them to the biostatistics
company to perform statistical analyses on unblinded test results.
1) Round 1 Biomarker Testing
31. Cassava initially hired a laboratory in Europe to test the Phase 2b CSF
samples  for  nine  biomarkers.  However,  there  were  two  biomarkers  that  Cassava
wanted tested that the European laboratory could not measure. Cassava asked Dr.
Wang  to  test  CSF  samples  for  those  two  biomarkers.  All  biomarker  testing  by  the
European  lab  (seven  tests)  and  Dr.  Wang  (two  tests)  (collectively,  “Round  1”)  were
completed by early May 2020. Results were sent to Dr. Burns who forwarded them to
the biostatistics company.
32. On  May  15,  2020,  Cassava  filed  a  Form  8-K  with  the  Commission,
attaching a press release with the headline “Top-line Results from a Phase 2b Study
of PTI-125 in Alzheimer’s Disease Does Not Meet Primary Endpoint.”
33. None of the tests performed by the European lab showed a meaningful
effect of the drug treatment arms compared with the placebo. The Phase 2b Round 1
results also did not show a drug effect consistent with Dr. Wang’s Phase 2a results.
34. Dr.   Burns   and   other   Cassava   employees   and   outside   scientists
expressed  concern  with  the  European  laboratory’s  results  due  to  unexplained data
variability.
35. In  its  May  15,  2020,  press  release,  Cassava  declared  that  the  “study
showed high variability in levels of CSF biomarkers over 28 days” and noted that it
planned to re-analyze the biomarkers with the remaining patient CSF samples.

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36. After this disclosure, Cassava’s stock price dropped from $7.61 a share
to $1.63 a share by the end of trading that day.
2) Dr. Burns Provides Data Sufficient to Allow Dr. Wang to Partially
Unblind Himself

37. On  May  13,  2020,  the  biostatistics  company  sent  to  Dr.  Burns  a
document summarizing  the  statistics  for  each  Round  1  biomarker.  The  document
included, among other things, statistics for the lowest (min) and highest (max) sample
levels in each treatment arm and in the placebo group for Day 0 (before the trial) and
Day 28 (after the trial). The document also identified the largest and smallest “change
from  baseline”  or  change  in  biomarker  levels  in  each  treatment  arm  and  placebo
group.
38. That  same  day,  at  Cassava’s  request,  the  biostatistics  company  sent
Cassava  the  unblinding  codes,  which  allowed  Cassava  to  know  which  patients
participated in each treatment group. Dr. Burns received the unblinding codes.
39. On  May  14,  2020,  Dr.  Burns  sent  this  document  with  min,  max,  and
change  from  baseline  data  to  Dr.  Wang  and  asked  him  to  evaluate  the  European
laboratory’s  data.  At  the  time  she  sent  the  document  to  Dr.  Wang,  Dr.  Burns
understood that Dr. Wang had completed the testing for two biomarkers in Round 1.
She  also  knew that  Dr.  Wang  had  individual  test  results  identified  by  patient
identification code for the two biomarkers that he had tested for Round 1.

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40. The  document  sent  by  Dr.  Burns  on  May  14,  2020,  had  sufficient
information to allow Dr. Wang to match some of the test results that he ran in Round
1 with specific reported statistics.
41. Ultimately, using the information he was provided, Dr. Wang was able
to unblind himself to roughly a third of the patients in Phase 2b—eight patients in
the placebo group; seven in the 50 mg group; and eight in the 100 mg group.
3) Round 2 Biomarker Testing
42. On  or  around  June  1,  2020,  Cassava  directed  Dr.  Wang  to  perform  a
reanalysis  of  the  Phase  2b  clinical  samples  for  the  seven  biomarkers  tested  by  the
European lab during Round 1 using the CSF samples remaining in his lab. Dr. Wang
did not, as part of Round 2, re-run tests for the two biomarkers he analyzed in Round
1.  Dr.  Wang  also  agreed  to  run  additional  biomarker  tests  that  had  not  been
completed in Round 1. These combined tests constituted the Round 2 testing.
43. When Dr. Wang conducted Round 2 testing, he was partially unblinded
and knew for at least some patients whether they were in the placebo group or one of
the treatment arms.
44. On  September  14,  2020,  Cassava  publicized  Dr.  Wang’s  results  which
showed  statistically  significant  improvement  in  all  biomarkers  in  the  treatment
groups as compared with the placebo group. The company issued a press release and
provided an investor presentation with an accompanying slide deck, all of which were
filed with the Commission under Form 8-K.

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45. The  September  14,  2020,  press  release  stated,  “Bioanalyses  were
conducted under blinded conditions to eliminate any possibility of bias. An academic
lab generated final results.”
4) Phase 2b Cognitive Testing
46. The Phase 2b trial included cognition testing in addition to biomarker
analysis.  Patients in the Phase 2b trial took the Cambridge Neuropsychological Test
Automated   Battery   (“CANTAB”),   a   group of   cognitive   testing.   The   CANTAB
administered  in  Phase  2b  included  four  different  types  of  tests,  each  measuring
different neurological functions. Patients were tested prior to receiving the drug (or
placebo) and again after 28 days.
47. The primary  CANTAB test  for  Alzheimer’s  patients  was  the  Paired
Associates  Learning  Total  Errors  Adjusted  (“PALTEA”),  which  measures  episodic
memory. Cassava’s   two mandatory reports, its Statistical Analysis Plan (“SAP”) and
Trial Protocol, said that it would report statistics for all subjects tested as part of its
cognitive testing.
48. Dr. Burns received the PALTEA results in May 2020. The data showed
no improvement in episodic memory in the drug treatment arms compared with the
placebo group and they showed no meaningful improvement in patient cognition.
49. After  receiving  these  results,  Dr.  Burns,  who  was  unblinded,  first
removed patients with missing data and patients who did not take the drug and then
engaged  in  what  she  described as  a  “sensitivity  analysis”  where  she  removed the
highest performing patients and lowest performing patients by baseline score cutoffs

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across all groups until the results appeared to show separation between the placebo
group and the treatment arms.
50. Dr.  Burns  ultimately  removed  40%  of  the  patient  population  from  the
PALTEA analysis.    The  methodology  or  criteria  of  subject  removal  that Dr.  Burns
utilized is not predefined in the clinical trial protocol nor the SAP.
51. Cassava did  not  disclose  the  full  results  of  the  PALTEA,  but  instead
reported the  results of Dr. Burns’  sensitivity  analysis  as the  final  results.  In some
disclosures,  Cassava  included  language  noting  that  it  calculated  effect  sizes  “after
removing the most and least impaired subjects.” But until a Form 8-K filed on July
1,  2024,  Cassava did  not  inform  investors  in  any  SEC  filing  that  the  reported
PALTEA excluded results from 40% of patients.
52. Phase  2b  cognitive  testing  also  included  an  analysis  of  participants’
Spatial Working Memory (“SWM”) as a secondary outcome. Dr. Burns relied on the
test’s developer to  identify  Key  Outcome  Measures,  which  for  Spatial  Working
Memory were “SWM Strategy” and “SWM between errors.” Neither the test creator
nor  Dr.  Burns  identified  any  other  key  SWM  measurement  prior  to  receiving
unblinded results,  although  the  total  errors  measure  reported  by  Cassava  is a
secondary outcome measure by the test developer.
53. When  the  biostatistics  firm  provided  results  for the  two  key  Spatial
Working  Memory  measurements  identified  by  Cassava  and  the  test  developer,
neither showed a clear benefit in the treatment arms.

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54. Cassava did not report results for SWM between errors or SWM strategy
to investors.
55. Instead,    Dr.    Burns    selected,    and    Cassava    reported,    another
measurement after she received unblinded results—SWM total errors. This was the
only SWM result that was disclosed to investors.
D. Cassava Discloses Results from Phase 2b
56. On September 14, 2020, Cassava announced the results from Phase 2b
in  a  press  release,  an  updated  presentation,  an  8-K  filing  with  the  SEC,  and  an
investor call.
57. In  its  September  14,  2020,  press  release,  Cassava  announced  that
“Alzheimer’s patients treated with 50 mg or 100 mg of [PTI-125] twice-daily  for  28
days showed statistically significant (p<0.05) improvements in biomarkers of disease
pathology,  neurodegeneration  and  neuroinflammation,  versus  Alzheimer’s  patients
who took placebo.” Cassava claimed that “[b]ioanalyses were conducted under blinded
conditions  to  eliminate  any  possibility  of  bias”  and,  without  identifying  Dr.  Wang,
said that an “academic lab generated final results.”
58. Cassava also claimed that “Alzheimer’s patients treated with [PTI-125]
showed directional improvements in validated tests of episodic memory and spatial
working memory, versus patients on placebo (Effect Sizes 46-17%).”
59. Cassava  also  released  a  presentation  on  September  14,  2020,  titled
“Final Results of a Phase 2b Study of Sumifilam in Alzheimer’s Disease.”

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60. That presentation claimed that the biomarker results from Round 1 was
“invalid  data,”  in  part  because  some  biomarkers  in  the  placebo  group “moved  in
opposite directions,” suggesting simultaneous improving and worsening in the same
patients, and that changes in biomarkers in placebo patients were uncorrelated. The
presentation claimed that changes in biomarkers from Round 2 were correlated, and
therefore valid.
61. The presentation claimed that the Phase 2b was a randomized, double-
blind, placebo-controlled, multicenter clinical study. Cassava also claimed that PTI-
125  “appears  to  stabilize  or  improve  memory,”  noting  “37%  and  23%  effect  sizes  in
episodic  memory  vs  placebo”  and  “17%  and  46%  effect  sizes  in  spatial  working
memory vs placebo.”
62. While  the  presentation  did  note  that  “effect  sizes vs.  placebo  were
calculated by Hedge’s g after removing the most and least impaired subjects across
all groups by baseline score” (emphasis added), the presentation did not disclose that
the  episodic  memory  results  were  from  a  sensitivity  analysis  and  not  from  the  full
population.
63. The presentation did not explain that the episodic memory results were
calculated only after removing 40% of the study population. The presentation failed
to disclose the average change in errors from baseline to day 28 for the full episodic
memory  data  set  (i.e., -3.4  points  for  the  placebo  group,  -2.8  points  for  the  50  mg
group, and -0.0 points for the 100 mg group), which did not show similar directional
improvement for either the 50 mg or 100 mg group compared with placebo.

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64. The September 14, 2020, presentation also did not disclose that the key
spatial working memory measurements identified by Cassava and the test developer
prior to unblinding showed no improvement.
65. Cassava also held an investor call on September 14, 2020, where both
Barbier and Dr. Burns were presenters.
66. On   that   conference   call,   Barbier   claimed   that   “an   academic   lab
conducted a second and final bioanalysis of the Phase 2b data” and that “the academic
lab showed what we consider to be valid, proper, and expected data.” He claimed that
“ourselves and our advisors and pretty much anyone we’ve shown all the data to have
confirmed that the second bioanalysis is a valid analysis.”
67. Dr. Burns presented biomarker results and the cognitive results on the
September 14, 2020 conference call. In her presentation, Dr. Burns described episodic
memory results as “on average the placebo patients improved by one and half errors
. . . but in contrast, the 50 mg dose group improved 5.7 errors on average resulting in
a 37 percent effect size compared to that change in placebo.” She continued that “the
patients who took 100 milligrams improved by four and a half errors which is a 23
percent effect size.”
68. Dr.  Burns  did  not  disclose  during  the  investor  call  that  the  presented
results for episodic memory were based on a sensitivity analysis. Dr. Burns also did
not  disclose  during  the  presentation  that  the  “averages”  she  referred  to  were
calculated only after removing 40% of the study population. She did not disclose the
average change in errors from baseline to day 28 for the full episodic memory data

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set (i.e., -3.4 points for the placebo group, -2.8 points for the 50 mg group, and -0.0
points for the 100 mg group), which did not show similar directional improvement for
either the 50 mg or 100 mg group compared with placebo.
69. Dr. Burns also presented the spatial working memory results, but again
did  not  disclose  that  the  spatial  working  memory  test  measures  identified  before
being unblinded did not show improvements in the treatment arms compared with
placebo.
70. Dr.  Burns  concluded  by  explaining  that  “any  one  of  these  [cognition]
tests  would  indicate  it’s  moving  in  the  direction,  but  because  we  have  directional
improvement  in  both  dose  groups  on  two  different  tests,  it  gives  us  a  lot  more
confidence.” She explained that having both tests show directional improvement was
encouraging because “it’s not just two plus two, it’s more like two plus two equals ten
rather than four.”
71. Shortly after Cassava’s September 14, 2020, announcements regarding
its Round 2 Phase 2b results, the company’s stock more than doubled, from $3.40 to
$8.41 on September 14, 2020.
72. On November  4,  2020,  Cassava  filed  an  8-K  attaching  a  presentation
which provided additional biomarker results from Phase 2b supposedly showing that
PTI-125  improved  the  integrity  of  the  blood-brain  barrier.  Those  tests  were  also
conducted by Dr. Wang, although Cassava did not disclose that at the time. The press
release  and  presentation  continued  to  claim  that  the  testing  was  conducted  under

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blinded conditions and compiled results from all Round 2 biomarker tests conducted
by Dr. Wang.
73. The presentation attached to the November 4, 2020, 8-K also included
results for episodic memory, but failed to disclose that any data had been excluded
from the analysis.
74. On  November  9,  2020,  Cassava  filed  its  Form 10-Q  Quarterly  Report.
That report included results from Phase 2b. The 10-Q continued to claim that Phase
2b  was  “double-blind”  and  that  PTI-125  “significantly  (P<0.05)  improved  an  entire
panel  of  validated  biomarkers  of  disease  in  patients  with  Alzheimer’s  disease
compared to a placebo group” and that “Alzheimer’s patients treated with [PTI-125]
showed directional improvements in validated tests of episodic memory and spatial
working memory, versus patients on placebo (Effect Sizes 46-17%).” That report did
not disclose that the episodic memory results excluded data from 40% of the Phase
2b participants.
75. On  February  8,  2021,  the  Company  filed  a  Form  8-K attaching  an
updated corporate presentation. The presentation summarized the biomarker results
from  Dr.  Wang.  The  presentation  also  included  the  top-line  results  from  Phase  2b
cognition without disclosing that any patient data had been removed from episodic
memory analysis and without disclosing that the other key spatial working memory
measurements showed no improvement compared with placebo.
76. Cassava continued to include Phase 2b results in filings with the SEC,
including detailed  results  in  annual  reports  filed  March  1,  2022,  and  February  28,

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2023, and summaries of   Phase 2b results in an annual report filed February 28, 2024,
and Forms 10-Q  filed  April  29,  2021,  August  4,  2021,  November  15,  2021,  May  5,
2022, August 4, 2022, November 7, 2022, May 1, 2023, August 3, 2023, November 7,
2023, and May 10, 2024. In each of those filings, Cassava claimed that the bioanalyses
were conducted under blinded conditions.
77. Cassava  offered  and  sold  securities  during  this  period, and in October
2023, Barbier and Dr. Burns received stock options from Cassava.
E. Cassava Raises    Funds  from  Public  Investors  Based  on  Phase  2b
Results
78. On   November   16,   2020,   Cassava   filed   an   updated   prospectus
supplement  to  sell  more  than  9  million  shares  at  $8  per  share,  netting  Cassava
around $70 million after underwriting fees. The prospectus incorporated by reference
certain  documents,  including  Form  10-Q  filed  November  9,  2020,  Form  8-K  filed
September 14, 2020, and Form 8-K filed November 4, 2020.
79. In  February 2021, Cassava announced that given the results of Phase
2b and prior clinical results, it  planned to proceed to Phase 3.
80. Cassava  subsequently  filed  a  new  shelf  registration  statement  in
February 2021 to register sales of approximately $200 million, which it executed on,
netting more than $190 million after paying underwriter fees. Cassava incorporated
documents into the shelf registration and subsequent prospectus, including Form 10-
Q  filed November 9, 2020,  Form  8-K  filed  September  14,  2020,  and  Form  8-K  filed
November 4, 2020.

19

F. Publicized Concerns About Dr. Wang
81. In August 2021, two individuals filed a citizen petition with the FDA—
a  mechanism  designed  for  the  public  to  petition  the  FDA  regarding  administrative
and  regulatory  decisions—asking  the  agency  to  perform  a  review  of  the  drug  and
claims  made  by  the  company.  Citizen  petitions  are  public  documents  and,  thus,
Cassava was alerted to the claims contemporaneously.
82. The citizen petition included claims, that, among other things, Dr. Wang
had manipulated images of tests known as western blots to various academic journals
as  well  as,  collaboratively  with  Cassava,  to  the  National  Institutes  of  Health  to
support grant applications.
83. Barbier  and  Dr.  Burns  were  made aware  of  the  claims  raised  by  the
citizen petition around the time it was filed.
G. Audit of Dr. Wang’s Laboratory
84. Following complaints raised in the citizen petition, the FDA performed
a review of Dr. Wang’s laboratory at CUNY.  Following the FDA’s review, Cassava
initiated its own audit of Dr. Wang’s laboratory related to his work on the Phase 2b
trial. Between  April  and  September 2022,  Cassava’s  Senior  Director  of  Clinical
Quality Systems reviewed documents related to the Phase 2b trial and conducted a
site visit to Dr. Wang’s laboratory at CUNY.
85. Cassava’s audit found critical issues with the laboratory and Dr. Wang’s
practices, including a “lack of procedures, proper document practices, equipment and

20

freezer  qualification,  and  software  access  control.”  Most  notably,  Cassava  found  a
“lack of experiment logbooks/notebooks for all study/research work being performed.”
86. Based on these failings, Cassava determined that Dr. Wang’s laboratory
at  CUNY  were  “considered unacceptable and temporarily  not  qualified  to
provide  biomarker  analysis  and  research  services  for  any  future  Cassava  studies.”
(Emphases  in  original).    Cassava  concluded  that  Dr.  Wang’s  laboratory  at  CUNY
“should not be contracted for any further biomarker analysis and research work” until
a “follow-up audit is conducted to confirm the observations have been closed out.”
Both Barbier and Dr. Burns were generally aware of the findings in the report.
However, Cassava did not sever its relationship with Dr. Wang at that time. Nor
did Cassava inform investors of Cassava’s internal findings regarding Dr. Wang. It
was not until June 2024 that Cassava officially ended its contractual relationship
with Dr. Wang.

OVERVIEW OF SECURITIES LAW VIOLATIONS
A. Defendants Negligently Misrepresented Material Facts
87. Sections 17(a)(2) and 17(a)(3) of the Securities Act make it unlawful for
any person, in the offer or sale of a security, to “obtain money or property by means
of any untrue statement of material fact” or a material omission necessary to make
statements made not misleading, or to “engage in any transaction, practice, or course
of business which operates or would operate as a fraud or deceit upon the purchaser.”

21

88. Defendants incorrectly claimed that   Phase   2b   bioanalyses   were
conducted  under  blinded  conditions.  Defendants negligently stated  in SEC  filings,
press  releases,  presentations,  and  verbally  that  the  Phase  2b  bioanalyses were
conducted  under  blinded  conditions.  Those  statements  were  untrue  because  Dr.
Wang,  who  performed  the  bioanalyses,  was  at  least  partially  unblinded  after
receiving information from Dr. Burns in May 2020. The misstatements were material
because, as even Cassava noted, “blinded conditions . . . eliminate any possibility of
bias.” Blinding was even more important in this instance because Dr. Wang, the co-
inventor of the drug and an individual with a financial stake in its success, was the
scientist performing the bioanalyses.
89. D
efendants failed to disclose that Dr. Wang conducted the bioanalyses
in Round 2 and Dr. Wang’s laboratory was later deemed unacceptable by Cassava’s
internal audit.  Defendants’ negligent failure to name Dr. Wang or his laboratory as
the parties that ran the assays deprived the investing public of the ability to consider
any conflicts of interest between Dr. Wang and Cassava. It also made it considerably
more  difficult  for  investors  to  question  whether  Dr.  Wang  remained  blinded or
whether  he  might  have  manipulated  results  to  ensure  investors  perceived  his
invention  as  a  success.  Furthermore,  Defendants  negligently failed  to  inform
investors that Cassava determined pursuant to their internal audit that Dr. Wang’s
laboratory  was  unacceptable  and  temporarily  not  qualified  to  provide  biomarker
analysis and research services for any future Cassava studies.

22

90. Defendants   misled   investors   by   reporting   cognition   results   that
excluded 40% of subjects.  Defendants negligently failed to disclose that the episodic
memory results were calculated only after removing 40% of the study population until
July 2024.  Defendants did not disclose the average change in errors from baseline to
day 28 for the full episodic memory data set (i.e., -3.4 points for the placebo group, -
2.8 points for the 50 mg group, and -0.0 points for the 100 mg group), which the full
data set did not show similar directional improvement for either the 50 mg or 100 mg
group compared with placebo.
91. While one presentation filed with the SEC did note that “effect sizes vs.
placebo  were  calculated  by  Hedge’s  g  after  removing  the  most  and  least  impaired
subjects across all groups by baseline score” (emphasis added), the presentation failed
to  disclose  that  episodic  memory  results  displayed  in  the graph  were  from a
sensitivity analysis, not from data from the full population.
92. Cassava and Dr. Burns selected a secondary outcome measurement to
report for spatial working memory and did not report results from other key spatial
working memory outcome measures.  Dr. Burns worked with the CANTAB developer
to  select  key  secondary  measurements  for  spatial  working  memory  before  she  was
unblinded. After those measurements did not show promising results, she decided to
select  a  new  spatial  working  memory  measurement  that  showed  improvements  in
treatment arms compared with placebo. By failing to disclose the other tests that did
not show directional improvement and failing to disclose that Dr. Burns only selected

23

the reported measurement,  Defendants negligently misrepresented the full truth of
the results.
93. Misstatements about  Phase  2b  were  material.  PTI-125  is  Cassava’s
primary  asset  and  its  only  realistic  potential  source  of  revenue.   The  company’s
financial status leading up to the stock sales in November 2020 and February 2021
also  show  the  materiality  of  the  news  about  Phase  2b.  Several  banks  advised  the
company that Cassava would be unable to raise sufficient capital for Phase 3 testing
until announcing the Phase 2b results. Following the Phase 2b result disclosures, the
company’s stock price rose dramatically, enabling the company to raise hundreds of
millions of dollars for its Phase 3 testing.
B. Recordkeeping and Reporting Requirements
94. Section 13(a) of the Exchange Act and Rules 13a-1, 13a-11 and 13a-13
thereunder  require  issuers  to  timely  file  annual,  current  and  quarterly  reports,
respectively,  with  the  Commission.  Implicit  in  these  provisions  is  the  requirement
that the information provided be accurate. Exchange Act Rule 12b-20 requires that
periodic reports contain all information necessary to ensure that statements made in
them are not materially misleading.
95. Cassava made its misstatements in at least 15 publicly filed annual and
quarterly  disclosures  between  September  14,  2020  and  February  2024 and  in
multiple periodic filings.  Following notice of the issues related to potential biomarker
test   manipulation   in   2021,   Cassava   continued   to   both   affirmatively   include
misrepresentations  in  its  publicly  filed  disclosures  and  presentations  as  well  as

24

incorporate  prior  misrepresentations  by  reference  into  its  continued  disclosures.
Barbier was ultimately responsible for ensuring the accuracy of the company’s filings,
and he filed quarterly certifications declaring that the disclosures were accurate.  Dr.
Burns should have known that certain provisions of the company’s filings contained
misleading information.

FIRST CLAIM FOR RELIEF
(Against Cassava for Violations of Sections   17(a)(2) and 17(a)(3) of the
Securities Act [15 U.S.C. §§ 77q(a)(2) and (3)])

96.  The SEC realleges and incorporates by reference paragraphs 1 through
95 above.
97. By reason of the conduct described above, Cassava, in the offer or sale
of securities, by use of the means or instruments of transportation or communication
in interstate commerce or by use of the mails, directly or indirectly: (i) obtained money
or property by means of any untrue statement of a material fact or any omission to
state a material fact necessary in order to make the statements made, in light of the
circumstances  under  which  they  were  made,  not  misleading;  and/or  (ii)  engaged  in
transactions, practices, or courses of business which operated or would operate as a
fraud  or  deceit  upon  the  purchaser.  As  alleged  above,  Cassava’s  negligent actions
included:  stating  in  public  filings  that  the  Phase  2b  study  was  conducted  under
“blinded  conditions;”  reporting  that  the  Phase  2b  study  was  conducted  by  an
“academic lab” and failing to name Dr. Wang or the subsequent findings against him
by Cassava’s internal audit; portraying a sensitivity analysis related to the Phase 2b

25

episodic cognitive results as the full and final results of the clinical trial; and failing
to disclose that the spatial working memory measurement reported in the Phase 2b
results  was  a  post-hoc  measurement  selected  by  Dr.  Burns  in  place  of  pre-selected
measurements that did not show positive outcomes.
98. While   engaging   in   the   conduct   described   above,   Cassava   acted
negligently.
99. By  engaging  in  the  conduct  described  above,  Cassava  violated,  and
unless restrained and enjoined will continue to violate, Sections 17(a)(2) and 17(a)(3)
of the Securities Act [15 U.S.C. §§ 77q(a)(2) and (3)].

SECOND CLAIM FOR RELIEF
(Against Barbier for Violations of Sections   17(a)(2) and 17(a)(3) of the
Securities Act [15 U.S.C. §§ 77q(a)(2) and (3)])

100. The SEC realleges and incorporates by reference paragraphs 1 through
95 above.
101. By reason of the conduct described above, Barbier, in the offer or sale of
securities, by use of the means or instruments of transportation or communication in
interstate commerce or by use of the mails, directly or indirectly: (i) obtained money
or property by means of any untrue statement of a material fact or any omission to
state a material fact necessary in order to make the statements made, in light of the
circumstances  under  which  they  were  made,  not  misleading;  and/or  (ii)  engaged  in
transactions, practices, or courses of business which operated or would operate as a
fraud  or  deceit  upon  the  purchaser.    As  alleged  above,  Barbier’s  negligent actions

26

included: reporting  that  the  Phase  2b  study  was  conducted  by  an  “academic  lab;”
failing to name Dr. Wang as the sole scientist conducting the biomarker analysis for
Phase  2b;  and failing  to  disclose  that  Cassava  deemed  Dr.  Wang’s  laboratory
unacceptable pursuant to an internal audit.
102. While   engaging   in   the   conduct   described   above,   Barbier   acted
negligently.
103. By  engaging  in  the  conduct  described  above,  Barbier  violated,  and
unless restrained and enjoined will continue to violate, Sections 17(a)(2) and 17(a)(3)
of the Securities Act [15 U.S.C. §§ 77q(a)(2) and (3)].

THIRD CLAIM FOR RELIEF
(Against Dr. Burns for Violations of Sections 17(a)(2) and 17(a)(3) of the
Securities Act [15 U.S.C. §§ 77q(a)(2) and (3)])

104. The SEC realleges and incorporates by reference paragraphs 1 through
95 above.
105. By reason of the conduct described above, Dr. Burns, in the offer or sale
of securities, by use of the means or instruments of transportation or communication
in interstate commerce or by use of the mails, directly or indirectly: (i) obtained money
or property by means of any untrue statement of a material fact or any omission to
state a material fact necessary in order to make the statements made, in light of the
circumstances  under  which  they  were  made,  not  misleading;  and/or  (ii)  engaged  in
transactions, practices, or courses of business which operated or would operate as a
fraud or deceit  upon the purchaser. As alleged above, Dr. Burns’ negligent actions

27

included:  stating  in  public  filings  that  the  Phase  2b  study  was  conducted  under
“blinded conditions;” portraying a sensitivity analysis related to the Phase 2b episodic
cognitive results as the full and final results of the clinical trial; and failing to disclose
that the spatial working memory measurement reported in the Phase 2b results was
a post-hoc measurement selected by Dr. Burns in place of pre-selected measurements
that did not show positive outcomes.
106. While  engaging  in  the  conduct  described  above,  Dr. Burns  acted
negligently.
107. By  engaging  in  the  conduct  described  above,  Dr. Burns  violated,  and
unless restrained and enjoined will continue to violate, Sections 17(a)(2) and 17(a)(3)
of the Securities Act [15 U.S.C. §§ 77q(a)(2) and (3)].

FOURTH CLAIM FOR RELIEF
(Against Cassava for Violating Section 13(a)(1) of the Securities Act and
Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder [15 U.S.C. § 78m(a) and
17 C.F.R. § 240.12b-20, 13a-1, 13a-11, and 13a-13])
108. The SEC realleges and incorporates by reference paragraphs 1 through
95 above.
109. Cassava violated Exchange Act Section 13(a)(1) and Exchange Act Rules
12b-20, 13a-1,  13a-11,  and  13a-13  thereunder  by  including  false  and  misleading
information  in  disclosure  documents  filed  with  the  Commission  pursuant  to  the
Exchange Act.

28

110. By  engaging  in  the  conduct  described  above,  Cassava  violated,  and
unless restrained and enjoined will continue to violate Exchange Act Section 13(a)(1)
and Exchange Act Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder.

PRAYER FOR RELIEF
WHEREFORE, the SEC respectfully requests that the Court enter a Final
Judgment:
I.
Finding that Defendants committed the alleged violations;
II.
Permanently enjoining all Defendants, their agents, servants, employees, and
attorneys, and those persons in active concert or participation with any of them, who
receive actual notice of the judgment by personal service or otherwise, from violating
Securities Act Section 17(a) [15 U.S.C. § 77q(a)];

III.
 Permanently   enjoining   Cassava,   its agents,   servants,   employees,   and
attorneys,  and  those  persons  in  active  concert  or  participation  with  any  of  it,  who
receive actual notice of the judgment by personal service or otherwise, from violating
Exchange Act Section 13(a)(1) [15 U.S.C. §   78m(a)] and Exchange Act Rules 12b-20,
13a-1, 13a-11, and 13a-13 [17 C.F.R. § 240.12b-20, 13a-1, 13a-11, and 13a-13];
IV.

29

Ordering  Defendants  to  pay  civil  penalties  pursuant  to  Section  20(d)  of  the
Securities Act [15 U.S.C. § 77t(d)];
V.
 Pursuant to the Court’s inherent authority to fashion appropriate equitable
relief in this matter, prohibiting Barbier and Burns from acting as an officer or
director of any issuer that has a class of securities registered pursuant to Section 12
of the Exchange Act [15 U.S.C. § 78l] or that is required to file reports pursuant to
Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)];
VI.
Retaining jurisdiction of this action in accordance with the principles of equity
and  the  Federal  Rules  of  Civil  Procedure  in  order  to  implement  and  carry  out  the
terms  of  all  orders  and  decrees  that  may  be  entered,  or  to  entertain  any  suitable
application or motion for additional relief within the jurisdiction of this Court; and
VII.
Granting such other and further relief as this Court may determine to be just
and necessary.
JURY DEMAND
Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff
Securities and Exchange Commission demands that this case be tried to a jury.
Dated:  Washington, D.C. Respectfully submitted,
             September___, 2024

By:  ___________________________________

30
Zachary A. Avallone
Tel. No. 202.795.0987
Email: [email protected]
Me
lissa Armstrong
Tel. No. 202.551.4724
Email: [email protected]
U
nited States Securities and Exchange
Commission
100 F Street, N.E.
Washington, D.C. 20549

1 

UNITED STATES DISTRICT COURT 
FOR THE WESTERN DISTRICT OF TEXAS 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 

v. Case No. 24-cv-1150 

CASSAVA SCIENCES, INC.; REMI 
BARBIER; and LINDSAY BURNS,  

JURY TRIAL DEMANDED 

Defendants. 

COMPLAINT 

Plaintiff Securities and Exchange Commission (“SEC” or “Commission”) 

alleges as follows: 

SUMMARY 

1. This case involves Defendant Cassava Sciences, Inc.’s (“Cassava”)

misleading statements about the results of its Phase 2b clinical trials for Cassava’s 

drug candidate PTI-125,1 a potential therapy for the treatment of Alzheimer’s 

disease, and the role of Defendants Remi Barbier, Cassava’s founder and former 

Chairman and CEO, and Dr. Lindsay Burns, Cassava’s former Senior Vice President 

1 PTI-125 is also known as simufilam. 

Case 1:24-cv-01150   Document 1   Filed 09/26/24   Page 1 of 30



2 
 
 

of Neuroscience, in those disclosures. The announced final Phase 2b results were 

misleading in five ways. 

2. First, Cassava claimed that “[b]ioanalyses were conducted under 

blinded conditions to eliminate any possibility of bias.” That statement negligently 

omitted material information. Dr. Hoau-Yan Wang, a professor at City University of 

New York (“CUNY”), ran clinical laboratory tests on Cassava’s behalf for Phase 2b. 

Before Dr. Wang began running the bioanalyses, Dr. Burns negligently provided 

information sufficient to allow Dr. Wang to partially unblind himself.  

3. Second, Defendants negligently did not disclose that the announced 

results of the bioanalyses were performed by Dr. Wang, the co-inventor of PTI-125, 

Cassava consultant, and member of Cassava’s Scientific Advisory Board. Instead, 

public filings with the SEC referred to Dr. Wang’s laboratory at CUNY generally as 

an “academic lab,” which although technically correct, was incomplete and 

misleading. By Cassava failing to name Dr. Wang, investors were not made aware 

that the scientist performing the analysis had a conflict of interest due to his 

professional and financial ties to Cassava.  

4. Third, Cassava conducted an audit of Dr. Wang’s laboratory at CUNY 

in 2022, and Cassava and Barbier negligently did not disclose the audit report’s 

finding that Dr. Wang’s laboratory was “unacceptable and temporarily not 

qualified to provide biomarker analysis and research for services for any future 

Cassava studies.” (Emphases in original). 

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3 
 
 

5. Fourth, Cassava and Dr. Burns negligently failed to fully disclose Dr. 

Burns’s removal of a large portion of patients in reported cognition data. The reported 

episodic memory results excluded data from 40% of patients who completed the 

cognition test. Cassava and Dr. Burns failed to disclose the average change in errors 

from baseline to day 28 for the full episodic memory data set (i.e., -3.4 points for the 

placebo group, -2.8 points for the 50 mg group, and -0.0 points for the 100mg group), 

which showed no similar directional improvement for either the 50 mg or 100 mg 

group compared with placebo. And Cassava and Dr. Burns did not disclose that Dr. 

Burns was unblinded when she decided which patients to exclude from the reported 

results. 

6. Fifth, Cassava and Dr. Burns negligently failed to disclose that the 

spatial working memory measurement reported in the Phase 2b results as showing 

cognitive improvement of up to 46% was a measurement selected by Dr. Burns only 

after she was unblinded. Cassava and Dr. Burns also failed to disclose that other 

spatial working memory results, including measurements identified as “key” prior to 

unblinding, did not show directional improvement in patients receiving PTI-125 

compared with placebo.  

7. In September 2020, Cassava announced final Phase 2b results that 

claimed that PTI-125 taken for 28 days significantly improved every measured 

biomarker for Alzheimer’s disease compared with subjects who took a placebo. 

Cassava also announced that patients who took PTI-125 showed improved cognition 

compared to patients who took the placebo.  

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4 
 
 

8. Remi Barbier, Cassava’s founder and former Chairman and CEO, 

participated in making Cassava’s misleading statements about Phase 2b. In addition 

to providing information sufficient to partially unblind Dr. Wang, Dr. Burns was 

responsible for compiling misleading Phase 2b cognition results. 

9. After Cassava reported its Phase 2b trial results, the company raised 

more than $260M in new funding.   

JURISDICTION AND VENUE 

10. The SEC brings this action pursuant to the authority established in 

Sections 20(b) and 20(d) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 

77t(b) and (d)]. 

11. This Court has jurisdiction over this action pursuant to Section 22(a) of 

the Securities Act [15 U.S.C. § 77v(a)]. 

12. Venue is proper in this district pursuant to Section 22(a) of the 

Securities Act [15 U.S.C. § 77v(a)], because Cassava is headquartered within this 

District, and Dr. Burns and Barbier reside within this District. 

13. Defendants, directly or indirectly, have made use of the means or 

instruments of transportation or communication in interstate commerce or of the 

mails in connection with the transactions, acts, practices, and courses of business 

alleged herein.  

DEFENDANTS 

14. Cassava Sciences, Inc. (“Cassava”) is a Delaware corporation with 

its principal place of business in Austin, Texas. Cassava is a pharmaceutical company 

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5 
 
 

with one primary drug candidate, PTI-125, a potential therapeutic for the treatment 

of Alzheimer’s disease. Cassava’s shares are registered with the Commission 

pursuant to Securities and Exchange Act of 1934 (“Exchange Act”) Section 12(b) and 

are listed on the Nasdaq Capital Market under the symbol “SAVA.”  

15. Remi Barbier, age 64, is the Founder, and was Chair, and Chief 

Executive Officer of Cassava until July 2024. He is a resident of Austin, Texas. 

16. Dr. Lindsay Burns, age 59, was the Senior Vice President of 

Neuroscience at Cassava until July 2024. She is a resident of Austin, Texas. Dr. 

Burns co-invented PTI-125 with Dr. Wang.  

OTHER RELEVANT PARTY 

17. Dr. Hoau-Yan Wang, age 67, is a tenured associate professor at the 

City University of New York’s School of Medicine. Dr. Wang co-invented PTI-125 

along with Dr. Burns. Dr. Wang served on Cassava’s Scientific Advisory Board, and 

Cassava retained Dr. Wang as a paid consultant until the company terminated his 

consulting agreement in June 2024.  

FACTS 

A. Cassava’s Background 

18. Barbier founded the company now known as Cassava in 1998. The 

relationship between the company now known as Cassava and Dr. Wang dates back 

to the early 2000s.  Dr. Wang served as a consultant to the company until June 2024. 

19. Dr. Burns was Dr. Wang’s main point of contact at Cassava. Dr. Burns 

and Dr. Wang collaborated as co-authors on multiple scientific journal articles and 

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6 
 
 

grant applications throughout the time that Dr. Wang served as a consultant to the 

company. 

20. Dr. Wang and Dr. Burns discovered the molecule PTI-125, later named 

simufilam, which they claim binds to altered Filamin A proteins and remediates 

Alzheimer’s disease-related pathology.  

B. Cassava’s Initial PTI-125 Trials 

21. Clinical trials for a new drug usually proceed through three phases 

before the FDA will consider a New Drug Application.  

22. In 2017, the FDA cleared Cassava’s Investigational New Drug 

application for PTI-125, which allowed Cassava to begin clinical trials of the drug in 

humans. That same year, Cassava completed a Phase 1 human safety trial of PTI-

125.   

23. In 2019, Cassava ran what it called a Phase 2a trial, consisting of 13 

Alzheimer’s patients who all took doses of PTI-125 for 28 days. There was no placebo 

group. 

24. One key objective of Cassava’s Phase 2a trial was to measure changes 

in concentration of biomarkers—substances in cerebrospinal fluid (“CSF”) believed to 

correspond with Alzheimer’s disease pathology, neuroinflammation, and 

neurodegeneration. To measure changes in biomarkers, CSF was collected from 

patients before taking the drug and again after 28 days of treatment. 

25. Cassava asked Dr. Wang to analyze the CSF samples collected from the 

Phase 2a participants. According to Dr. Wang’s results, all 13 patients showed 

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7 
 
 

directional improvements in multiple biomarkers, suggesting that the drug may be 

causing changes in biomarker levels.  

26. In public announcements and SEC filings, Cassava disclosed that Dr. 

Wang and his laboratory at CUNY performed the biomarker tests for Phase 2a. 

C. Cassava’s Phase 2b Trial 

27. In 2019, Cassava designed and began its Phase 2b clinical trial. That 

trial ultimately included 64 patients separated into three groups—one placebo group, 

one group taking a 50mg dose, and another group taking a 100mg dose. Each patient 

in each group was to take their respective treatment for 28 days.  

28. Phase 2b was to be conducted as a double-blinded clinical trial, which 

means neither the patient nor the tester is aware which patient received which 

treatment. Blinding is a standard practice in many clinical trials, in part because it 

helps reduce the potential impact of bias. 

29. Participants in Phase 2b had CSF drawn before treatment began and 

again after 28 days of treatment. Pursuant to the testing protocol, Cassava directed 

each clinical site to send patient CSF samples to the CUNY laboratory in New York 

where Dr. Wang performed research to be stored before laboratory analysis. 

Laboratory results were to be sent directly to Dr. Burns who then was to forward 

them to a biostatistics company hired by Cassava to compile unblinded results. 

30. Participants in Phase 2b also took a battery of cognition tests before 

treatment and then again after 28 days to assess any changes in cognition. Those 

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8 
 
 

results were also sent first to Dr. Burns who then forwarded them to the biostatistics 

company to perform statistical analyses on unblinded test results. 

1) Round 1 Biomarker Testing 

31. Cassava initially hired a laboratory in Europe to test the Phase 2b CSF 

samples for nine biomarkers. However, there were two biomarkers that Cassava 

wanted tested that the European laboratory could not measure. Cassava asked Dr. 

Wang to test CSF samples for those two biomarkers. All biomarker testing by the 

European lab (seven tests) and Dr. Wang (two tests) (collectively, “Round 1”) were 

completed by early May 2020. Results were sent to Dr. Burns who forwarded them to 

the biostatistics company.  

32. On May 15, 2020, Cassava filed a Form 8-K with the Commission, 

attaching a press release with the headline “Top-line Results from a Phase 2b Study 

of PTI-125 in Alzheimer’s Disease Does Not Meet Primary Endpoint.”  

33. None of the tests performed by the European lab showed a meaningful 

effect of the drug treatment arms compared with the placebo. The Phase 2b Round 1 

results also did not show a drug effect consistent with Dr. Wang’s Phase 2a results. 

34. Dr. Burns and other Cassava employees and outside scientists 

expressed concern with the European laboratory’s results due to unexplained data 

variability. 

35. In its May 15, 2020, press release, Cassava declared that the “study 

showed high variability in levels of CSF biomarkers over 28 days” and noted that it 

planned to re-analyze the biomarkers with the remaining patient CSF samples.   

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9 
 
 

36. After this disclosure, Cassava’s stock price dropped from $7.61 a share 

to $1.63 a share by the end of trading that day. 

2) Dr. Burns Provides Data Sufficient to Allow Dr. Wang to Partially 
Unblind Himself 

 

37. On May 13, 2020, the biostatistics company sent to Dr. Burns a 

document summarizing the statistics for each Round 1 biomarker. The document 

included, among other things, statistics for the lowest (min) and highest (max) sample 

levels in each treatment arm and in the placebo group for Day 0 (before the trial) and 

Day 28 (after the trial). The document also identified the largest and smallest “change 

from baseline” or change in biomarker levels in each treatment arm and placebo 

group. 

38. That same day, at Cassava’s request, the biostatistics company sent 

Cassava the unblinding codes, which allowed Cassava to know which patients 

participated in each treatment group. Dr. Burns received the unblinding codes. 

39. On May 14, 2020, Dr. Burns sent this document with min, max, and 

change from baseline data to Dr. Wang and asked him to evaluate the European 

laboratory’s data. At the time she sent the document to Dr. Wang, Dr. Burns 

understood that Dr. Wang had completed the testing for two biomarkers in Round 1. 

She also knew that Dr. Wang had individual test results identified by patient 

identification code for the two biomarkers that he had tested for Round 1.   

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40. The document sent by Dr. Burns on May 14, 2020, had sufficient 

information to allow Dr. Wang to match some of the test results that he ran in Round 

1 with specific reported statistics.  

41. Ultimately, using the information he was provided, Dr. Wang was able 

to unblind himself to roughly a third of the patients in Phase 2b—eight patients in 

the placebo group; seven in the 50 mg group; and eight in the 100 mg group.  

3) Round 2 Biomarker Testing 

42. On or around June 1, 2020, Cassava directed Dr. Wang to perform a 

reanalysis of the Phase 2b clinical samples for the seven biomarkers tested by the 

European lab during Round 1 using the CSF samples remaining in his lab. Dr. Wang 

did not, as part of Round 2, re-run tests for the two biomarkers he analyzed in Round 

1. Dr. Wang also agreed to run additional biomarker tests that had not been 

completed in Round 1. These combined tests constituted the Round 2 testing. 

43. When Dr. Wang conducted Round 2 testing, he was partially unblinded 

and knew for at least some patients whether they were in the placebo group or one of 

the treatment arms. 

44. On September 14, 2020, Cassava publicized Dr. Wang’s results which 

showed statistically significant improvement in all biomarkers in the treatment 

groups as compared with the placebo group. The company issued a press release and 

provided an investor presentation with an accompanying slide deck, all of which were 

filed with the Commission under Form 8-K.  

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45. The September 14, 2020, press release stated, “Bioanalyses were 

conducted under blinded conditions to eliminate any possibility of bias. An academic 

lab generated final results.”   

4) Phase 2b Cognitive Testing 

46. The Phase 2b trial included cognition testing in addition to biomarker 

analysis.  Patients in the Phase 2b trial took the Cambridge Neuropsychological Test 

Automated Battery (“CANTAB”), a group of cognitive testing. The CANTAB 

administered in Phase 2b included four different types of tests, each measuring 

different neurological functions. Patients were tested prior to receiving the drug (or 

placebo) and again after 28 days. 

47. The primary CANTAB test for Alzheimer’s patients was the Paired 

Associates Learning Total Errors Adjusted (“PALTEA”), which measures episodic 

memory. Cassava’s two mandatory reports, its Statistical Analysis Plan (“SAP”) and 

Trial Protocol, said that it would report statistics for all subjects tested as part of its 

cognitive testing. 

48. Dr. Burns received the PALTEA results in May 2020. The data showed 

no improvement in episodic memory in the drug treatment arms compared with the 

placebo group and they showed no meaningful improvement in patient cognition.   

49. After receiving these results, Dr. Burns, who was unblinded, first 

removed patients with missing data and patients who did not take the drug and then 

engaged in what she described as a “sensitivity analysis” where she removed the 

highest performing patients and lowest performing patients by baseline score cutoffs 

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across all groups until the results appeared to show separation between the placebo 

group and the treatment arms.   

50. Dr. Burns ultimately removed 40% of the patient population from the 

PALTEA analysis.  The methodology or criteria of subject removal that Dr. Burns 

utilized is not predefined in the clinical trial protocol nor the SAP. 

51. Cassava did not disclose the full results of the PALTEA, but instead 

reported the results of Dr. Burns’ sensitivity analysis as the final results. In some 

disclosures, Cassava included language noting that it calculated effect sizes “after 

removing the most and least impaired subjects.” But until a Form 8-K filed on July 

1, 2024, Cassava did not inform investors in any SEC filing that the reported 

PALTEA excluded results from 40% of patients.  

52. Phase 2b cognitive testing also included an analysis of participants’ 

Spatial Working Memory (“SWM”) as a secondary outcome. Dr. Burns relied on the 

test’s developer to identify Key Outcome Measures, which for Spatial Working 

Memory were “SWM Strategy” and “SWM between errors.” Neither the test creator 

nor Dr. Burns identified any other key SWM measurement prior to receiving 

unblinded results, although the total errors measure reported by Cassava is a 

secondary outcome measure by the test developer.  

53. When the biostatistics firm provided results for the two key Spatial 

Working Memory measurements identified by Cassava and the test developer, 

neither showed a clear benefit in the treatment arms. 

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54. Cassava did not report results for SWM between errors or SWM strategy 

to investors.  

55. Instead, Dr. Burns selected, and Cassava reported, another 

measurement after she received unblinded results—SWM total errors. This was the 

only SWM result that was disclosed to investors. 

D. Cassava Discloses Results from Phase 2b 

56. On September 14, 2020, Cassava announced the results from Phase 2b 

in a press release, an updated presentation, an 8-K filing with the SEC, and an 

investor call.  

57. In its September 14, 2020, press release, Cassava announced that 

“Alzheimer’s patients treated with 50 mg or 100 mg of [PTI-125] twice-daily for 28 

days showed statistically significant (p<0.05) improvements in biomarkers of disease 

pathology, neurodegeneration and neuroinflammation, versus Alzheimer’s patients 

who took placebo.” Cassava claimed that “[b]ioanalyses were conducted under blinded 

conditions to eliminate any possibility of bias” and, without identifying Dr. Wang, 

said that an “academic lab generated final results.” 

58. Cassava also claimed that “Alzheimer’s patients treated with [PTI-125] 

showed directional improvements in validated tests of episodic memory and spatial 

working memory, versus patients on placebo (Effect Sizes 46-17%).”  

59. Cassava also released a presentation on September 14, 2020, titled 

“Final Results of a Phase 2b Study of Sumifilam in Alzheimer’s Disease.” 

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60. That presentation claimed that the biomarker results from Round 1 was 

“invalid data,” in part because some biomarkers in the placebo group “moved in 

opposite directions,” suggesting simultaneous improving and worsening in the same 

patients, and that changes in biomarkers in placebo patients were uncorrelated. The 

presentation claimed that changes in biomarkers from Round 2 were correlated, and 

therefore valid.  

61. The presentation claimed that the Phase 2b was a randomized, double-

blind, placebo-controlled, multicenter clinical study. Cassava also claimed that PTI-

125 “appears to stabilize or improve memory,” noting “37% and 23% effect sizes in 

episodic memory vs placebo” and “17% and 46% effect sizes in spatial working 

memory vs placebo.”  

62. While the presentation did note that “effect sizes vs. placebo were 

calculated by Hedge’s g after removing the most and least impaired subjects across 

all groups by baseline score” (emphasis added), the presentation did not disclose that 

the episodic memory results were from a sensitivity analysis and not from the full 

population.  

63. The presentation did not explain that the episodic memory results were 

calculated only after removing 40% of the study population. The presentation failed 

to disclose the average change in errors from baseline to day 28 for the full episodic 

memory data set (i.e., -3.4 points for the placebo group, -2.8 points for the 50 mg 

group, and -0.0 points for the 100 mg group), which did not show similar directional 

improvement for either the 50 mg or 100 mg group compared with placebo.  

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64. The September 14, 2020, presentation also did not disclose that the key 

spatial working memory measurements identified by Cassava and the test developer 

prior to unblinding showed no improvement.  

65. Cassava also held an investor call on September 14, 2020, where both 

Barbier and Dr. Burns were presenters.  

66. On that conference call, Barbier claimed that “an academic lab 

conducted a second and final bioanalysis of the Phase 2b data” and that “the academic 

lab showed what we consider to be valid, proper, and expected data.” He claimed that 

“ourselves and our advisors and pretty much anyone we’ve shown all the data to have 

confirmed that the second bioanalysis is a valid analysis.” 

67. Dr. Burns presented biomarker results and the cognitive results on the 

September 14, 2020 conference call. In her presentation, Dr. Burns described episodic 

memory results as “on average the placebo patients improved by one and half errors 

. . . but in contrast, the 50 mg dose group improved 5.7 errors on average resulting in 

a 37 percent effect size compared to that change in placebo.” She continued that “the 

patients who took 100 milligrams improved by four and a half errors which is a 23 

percent effect size.”  

68. Dr. Burns did not disclose during the investor call that the presented 

results for episodic memory were based on a sensitivity analysis. Dr. Burns also did 

not disclose during the presentation that the “averages” she referred to were 

calculated only after removing 40% of the study population. She did not disclose the 

average change in errors from baseline to day 28 for the full episodic memory data 

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set (i.e., -3.4 points for the placebo group, -2.8 points for the 50 mg group, and -0.0 

points for the 100 mg group), which did not show similar directional improvement for 

either the 50 mg or 100 mg group compared with placebo.  

69. Dr. Burns also presented the spatial working memory results, but again 

did not disclose that the spatial working memory test measures identified before 

being unblinded did not show improvements in the treatment arms compared with 

placebo.  

70. Dr. Burns concluded by explaining that “any one of these [cognition] 

tests would indicate it’s moving in the direction, but because we have directional 

improvement in both dose groups on two different tests, it gives us a lot more 

confidence.” She explained that having both tests show directional improvement was 

encouraging because “it’s not just two plus two, it’s more like two plus two equals ten 

rather than four.” 

71. Shortly after Cassava’s September 14, 2020, announcements regarding 

its Round 2 Phase 2b results, the company’s stock more than doubled, from $3.40 to 

$8.41 on September 14, 2020.   

72. On November 4, 2020, Cassava filed an 8-K attaching a presentation 

which provided additional biomarker results from Phase 2b supposedly showing that 

PTI-125 improved the integrity of the blood-brain barrier. Those tests were also 

conducted by Dr. Wang, although Cassava did not disclose that at the time. The press 

release and presentation continued to claim that the testing was conducted under 

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blinded conditions and compiled results from all Round 2 biomarker tests conducted 

by Dr. Wang.  

73. The presentation attached to the November 4, 2020, 8-K also included 

results for episodic memory, but failed to disclose that any data had been excluded 

from the analysis. 

74. On November 9, 2020, Cassava filed its Form 10-Q Quarterly Report. 

That report included results from Phase 2b. The 10-Q continued to claim that Phase 

2b was “double-blind” and that PTI-125 “significantly (P<0.05) improved an entire 

panel of validated biomarkers of disease in patients with Alzheimer’s disease 

compared to a placebo group” and that “Alzheimer’s patients treated with [PTI-125] 

showed directional improvements in validated tests of episodic memory and spatial 

working memory, versus patients on placebo (Effect Sizes 46-17%).” That report did 

not disclose that the episodic memory results excluded data from 40% of the Phase 

2b participants.  

75. On February 8, 2021, the Company filed a Form 8-K attaching an 

updated corporate presentation. The presentation summarized the biomarker results 

from Dr. Wang. The presentation also included the top-line results from Phase 2b 

cognition without disclosing that any patient data had been removed from episodic 

memory analysis and without disclosing that the other key spatial working memory 

measurements showed no improvement compared with placebo. 

76. Cassava continued to include Phase 2b results in filings with the SEC, 

including detailed results in annual reports filed March 1, 2022, and February 28, 

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2023, and summaries of Phase 2b results in an annual report filed February 28, 2024, 

and Forms 10-Q filed April 29, 2021, August 4, 2021, November 15, 2021, May 5, 

2022, August 4, 2022, November 7, 2022, May 1, 2023, August 3, 2023, November 7, 

2023, and May 10, 2024. In each of those filings, Cassava claimed that the bioanalyses 

were conducted under blinded conditions.  

77. Cassava offered and sold securities during this period, and in October 

2023, Barbier and Dr. Burns received stock options from Cassava.  

E. Cassava Raises Funds from Public Investors Based on Phase 2b 
Results 

78. On November 16, 2020, Cassava filed an updated prospectus 

supplement to sell more than 9 million shares at $8 per share, netting Cassava 

around $70 million after underwriting fees. The prospectus incorporated by reference 

certain documents, including Form 10-Q filed November 9, 2020, Form 8-K filed 

September 14, 2020, and Form 8-K filed November 4, 2020. 

79. In February 2021, Cassava announced that given the results of Phase 

2b and prior clinical results, it planned to proceed to Phase 3. 

80. Cassava subsequently filed a new shelf registration statement in 

February 2021 to register sales of approximately $200 million, which it executed on, 

netting more than $190 million after paying underwriter fees. Cassava incorporated 

documents into the shelf registration and subsequent prospectus, including Form 10-

Q filed November 9, 2020, Form 8-K filed September 14, 2020, and Form 8-K filed 

November 4, 2020. 

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F. Publicized Concerns About Dr. Wang 

81. In August 2021, two individuals filed a citizen petition with the FDA—

a mechanism designed for the public to petition the FDA regarding administrative 

and regulatory decisions—asking the agency to perform a review of the drug and 

claims made by the company. Citizen petitions are public documents and, thus, 

Cassava was alerted to the claims contemporaneously.   

82. The citizen petition included claims, that, among other things, Dr. Wang 

had manipulated images of tests known as western blots to various academic journals 

as well as, collaboratively with Cassava, to the National Institutes of Health to 

support grant applications.  

83. Barbier and Dr. Burns were made aware of the claims raised by the 

citizen petition around the time it was filed. 

G. Audit of Dr. Wang’s Laboratory 

84. Following complaints raised in the citizen petition, the FDA performed 

a review of Dr. Wang’s laboratory at CUNY.  Following the FDA’s review, Cassava 

initiated its own audit of Dr. Wang’s laboratory related to his work on the Phase 2b 

trial. Between April and September 2022, Cassava’s Senior Director of Clinical 

Quality Systems reviewed documents related to the Phase 2b trial and conducted a 

site visit to Dr. Wang’s laboratory at CUNY.  

85. Cassava’s audit found critical issues with the laboratory and Dr. Wang’s 

practices, including a “lack of procedures, proper document practices, equipment and 

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freezer qualification, and software access control.” Most notably, Cassava found a 

“lack of experiment logbooks/notebooks for all study/research work being performed.”  

86. Based on these failings, Cassava determined that Dr. Wang’s laboratory 

at CUNY were “considered unacceptable and temporarily not qualified to 

provide biomarker analysis and research services for any future Cassava studies.” 

(Emphases in original).  Cassava concluded that Dr. Wang’s laboratory at CUNY 

“should not be contracted for any further biomarker analysis and research work” until 

a “follow-up audit is conducted to confirm the observations have been closed out.” 

Both Barbier and Dr. Burns were generally aware of the findings in the report. 

However, Cassava did not sever its relationship with Dr. Wang at that time. Nor 

did Cassava inform investors of Cassava’s internal findings regarding Dr. Wang. It 

was not until June 2024 that Cassava officially ended its contractual relationship 

with Dr. Wang. 

 

OVERVIEW OF SECURITIES LAW VIOLATIONS 

A. Defendants Negligently Misrepresented Material Facts 

87. Sections 17(a)(2) and 17(a)(3) of the Securities Act make it unlawful for 

any person, in the offer or sale of a security, to “obtain money or property by means 

of any untrue statement of material fact” or a material omission necessary to make 

statements made not misleading, or to “engage in any transaction, practice, or course 

of business which operates or would operate as a fraud or deceit upon the purchaser.” 

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88. Defendants incorrectly claimed that Phase 2b bioanalyses were 

conducted under blinded conditions. Defendants negligently stated in SEC filings, 

press releases, presentations, and verbally that the Phase 2b bioanalyses were 

conducted under blinded conditions. Those statements were untrue because Dr. 

Wang, who performed the bioanalyses, was at least partially unblinded after 

receiving information from Dr. Burns in May 2020. The misstatements were material 

because, as even Cassava noted, “blinded conditions . . . eliminate any possibility of 

bias.” Blinding was even more important in this instance because Dr. Wang, the co-

inventor of the drug and an individual with a financial stake in its success, was the 

scientist performing the bioanalyses.  

89. Defendants failed to disclose that Dr. Wang conducted the bioanalyses 

in Round 2 and Dr. Wang’s laboratory was later deemed unacceptable by Cassava’s 

internal audit. Defendants’ negligent failure to name Dr. Wang or his laboratory as 

the parties that ran the assays deprived the investing public of the ability to consider 

any conflicts of interest between Dr. Wang and Cassava. It also made it considerably 

more difficult for investors to question whether Dr. Wang remained blinded or 

whether he might have manipulated results to ensure investors perceived his 

invention as a success. Furthermore, Defendants negligently failed to inform 

investors that Cassava determined pursuant to their internal audit that Dr. Wang’s 

laboratory was unacceptable and temporarily not qualified to provide biomarker 

analysis and research services for any future Cassava studies. 

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90. Defendants misled investors by reporting cognition results that 

excluded 40% of subjects. Defendants negligently failed to disclose that the episodic 

memory results were calculated only after removing 40% of the study population until 

July 2024. Defendants did not disclose the average change in errors from baseline to 

day 28 for the full episodic memory data set (i.e., -3.4 points for the placebo group, -

2.8 points for the 50 mg group, and -0.0 points for the 100 mg group), which the full 

data set did not show similar directional improvement for either the 50 mg or 100 mg 

group compared with placebo.  

91. While one presentation filed with the SEC did note that “effect sizes vs. 

placebo were calculated by Hedge’s g after removing the most and least impaired 

subjects across all groups by baseline score” (emphasis added), the presentation failed 

to disclose that episodic memory results displayed in the graph were from a 

sensitivity analysis, not from data from the full population.  

92. Cassava and Dr. Burns selected a secondary outcome measurement to 

report for spatial working memory and did not report results from other key spatial 

working memory outcome measures. Dr. Burns worked with the CANTAB developer 

to select key secondary measurements for spatial working memory before she was 

unblinded. After those measurements did not show promising results, she decided to 

select a new spatial working memory measurement that showed improvements in 

treatment arms compared with placebo. By failing to disclose the other tests that did 

not show directional improvement and failing to disclose that Dr. Burns only selected 

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the reported measurement, Defendants negligently misrepresented the full truth of 

the results. 

93. Misstatements about Phase 2b were material. PTI-125 is Cassava’s 

primary asset and its only realistic potential source of revenue. The company’s 

financial status leading up to the stock sales in November 2020 and February 2021 

also show the materiality of the news about Phase 2b. Several banks advised the 

company that Cassava would be unable to raise sufficient capital for Phase 3 testing 

until announcing the Phase 2b results. Following the Phase 2b result disclosures, the 

company’s stock price rose dramatically, enabling the company to raise hundreds of 

millions of dollars for its Phase 3 testing.  

B. Recordkeeping and Reporting Requirements 

94. Section 13(a) of the Exchange Act and Rules 13a-1, 13a-11 and 13a-13 

thereunder require issuers to timely file annual, current and quarterly reports, 

respectively, with the Commission. Implicit in these provisions is the requirement 

that the information provided be accurate. Exchange Act Rule 12b-20 requires that 

periodic reports contain all information necessary to ensure that statements made in 

them are not materially misleading.   

95. Cassava made its misstatements in at least 15 publicly filed annual and 

quarterly disclosures between September 14, 2020 and February 2024 and in 

multiple periodic filings.  Following notice of the issues related to potential biomarker 

test manipulation in 2021, Cassava continued to both affirmatively include 

misrepresentations in its publicly filed disclosures and presentations as well as 

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incorporate prior misrepresentations by reference into its continued disclosures.  

Barbier was ultimately responsible for ensuring the accuracy of the company’s filings, 

and he filed quarterly certifications declaring that the disclosures were accurate.  Dr. 

Burns should have known that certain provisions of the company’s filings contained 

misleading information. 

 

FIRST CLAIM FOR RELIEF 

(Against Cassava for Violations of Sections 17(a)(2) and 17(a)(3) of the 
Securities Act [15 U.S.C. §§ 77q(a)(2) and (3)]) 

 
96.  The SEC realleges and incorporates by reference paragraphs 1 through 

95 above. 

97. By reason of the conduct described above, Cassava, in the offer or sale 

of securities, by use of the means or instruments of transportation or communication 

in interstate commerce or by use of the mails, directly or indirectly: (i) obtained money 

or property by means of any untrue statement of a material fact or any omission to 

state a material fact necessary in order to make the statements made, in light of the 

circumstances under which they were made, not misleading; and/or (ii) engaged in 

transactions, practices, or courses of business which operated or would operate as a 

fraud or deceit upon the purchaser. As alleged above, Cassava’s negligent actions 

included: stating in public filings that the Phase 2b study was conducted under 

“blinded conditions;” reporting that the Phase 2b study was conducted by an 

“academic lab” and failing to name Dr. Wang or the subsequent findings against him 

by Cassava’s internal audit; portraying a sensitivity analysis related to the Phase 2b 

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episodic cognitive results as the full and final results of the clinical trial; and failing 

to disclose that the spatial working memory measurement reported in the Phase 2b 

results was a post-hoc measurement selected by Dr. Burns in place of pre-selected 

measurements that did not show positive outcomes.  

98. While engaging in the conduct described above, Cassava acted 

negligently.  

99. By engaging in the conduct described above, Cassava violated, and 

unless restrained and enjoined will continue to violate, Sections 17(a)(2) and 17(a)(3) 

of the Securities Act [15 U.S.C. §§ 77q(a)(2) and (3)]. 

 

SECOND CLAIM FOR RELIEF 

(Against Barbier for Violations of Sections 17(a)(2) and 17(a)(3) of the 
Securities Act [15 U.S.C. §§ 77q(a)(2) and (3)]) 

 
100. The SEC realleges and incorporates by reference paragraphs 1 through 

95 above. 

101. By reason of the conduct described above, Barbier, in the offer or sale of 

securities, by use of the means or instruments of transportation or communication in 

interstate commerce or by use of the mails, directly or indirectly: (i) obtained money 

or property by means of any untrue statement of a material fact or any omission to 

state a material fact necessary in order to make the statements made, in light of the 

circumstances under which they were made, not misleading; and/or (ii) engaged in 

transactions, practices, or courses of business which operated or would operate as a 

fraud or deceit upon the purchaser.  As alleged above, Barbier’s negligent actions 

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included: reporting that the Phase 2b study was conducted by an “academic lab;” 

failing to name Dr. Wang as the sole scientist conducting the biomarker analysis for 

Phase 2b; and failing to disclose that Cassava deemed Dr. Wang’s laboratory 

unacceptable pursuant to an internal audit. 

102. While engaging in the conduct described above, Barbier acted 

negligently. 

103. By engaging in the conduct described above, Barbier violated, and 

unless restrained and enjoined will continue to violate, Sections 17(a)(2) and 17(a)(3) 

of the Securities Act [15 U.S.C. §§ 77q(a)(2) and (3)]. 

 

THIRD CLAIM FOR RELIEF 

(Against Dr. Burns for Violations of Sections 17(a)(2) and 17(a)(3) of the 
Securities Act [15 U.S.C. §§ 77q(a)(2) and (3)]) 

 
104. The SEC realleges and incorporates by reference paragraphs 1 through 

95 above. 

105. By reason of the conduct described above, Dr. Burns, in the offer or sale 

of securities, by use of the means or instruments of transportation or communication 

in interstate commerce or by use of the mails, directly or indirectly: (i) obtained money 

or property by means of any untrue statement of a material fact or any omission to 

state a material fact necessary in order to make the statements made, in light of the 

circumstances under which they were made, not misleading; and/or (ii) engaged in 

transactions, practices, or courses of business which operated or would operate as a 

fraud or deceit  upon the purchaser. As alleged above, Dr. Burns’ negligent actions 

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included: stating in public filings that the Phase 2b study was conducted under 

“blinded conditions;” portraying a sensitivity analysis related to the Phase 2b episodic 

cognitive results as the full and final results of the clinical trial; and failing to disclose 

that the spatial working memory measurement reported in the Phase 2b results was 

a post-hoc measurement selected by Dr. Burns in place of pre-selected measurements 

that did not show positive outcomes. 

106. While engaging in the conduct described above, Dr. Burns acted 

negligently. 

107. By engaging in the conduct described above, Dr. Burns violated, and 

unless restrained and enjoined will continue to violate, Sections 17(a)(2) and 17(a)(3) 

of the Securities Act [15 U.S.C. §§ 77q(a)(2) and (3)]. 

 

FOURTH CLAIM FOR RELIEF 

(Against Cassava for Violating Section 13(a)(1) of the Securities Act and 
Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder [15 U.S.C. § 78m(a) and 

17 C.F.R. § 240.12b-20, 13a-1, 13a-11, and 13a-13]) 

108. The SEC realleges and incorporates by reference paragraphs 1 through 

95 above. 

109. Cassava violated Exchange Act Section 13(a)(1) and Exchange Act Rules 

12b-20, 13a-1, 13a-11, and 13a-13 thereunder by including false and misleading 

information in disclosure documents filed with the Commission pursuant to the 

Exchange Act. 

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110. By engaging in the conduct described above, Cassava violated, and 

unless restrained and enjoined will continue to violate Exchange Act Section 13(a)(1) 

and Exchange Act Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder. 

 

PRAYER FOR RELIEF 

WHEREFORE, the SEC respectfully requests that the Court enter a Final 
Judgment: 

I. 

Finding that Defendants committed the alleged violations; 

II. 

Permanently enjoining all Defendants, their agents, servants, employees, and 

attorneys, and those persons in active concert or participation with any of them, who 

receive actual notice of the judgment by personal service or otherwise, from violating 

Securities Act Section 17(a) [15 U.S.C. § 77q(a)]; 

 

III. 

 Permanently enjoining Cassava, its agents, servants, employees, and 

attorneys, and those persons in active concert or participation with any of it, who 

receive actual notice of the judgment by personal service or otherwise, from violating 

Exchange Act Section 13(a)(1) [15 U.S.C. § 78m(a)] and Exchange Act Rules 12b-20, 

13a-1, 13a-11, and 13a-13 [17 C.F.R. § 240.12b-20, 13a-1, 13a-11, and 13a-13]; 

IV. 

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Ordering Defendants to pay civil penalties pursuant to Section 20(d) of the 

Securities Act [15 U.S.C. § 77t(d)]; 

V. 

 Pursuant to the Court’s inherent authority to fashion appropriate equitable 

relief in this matter, prohibiting Barbier and Burns from acting as an officer or 

director of any issuer that has a class of securities registered pursuant to Section 12 

of the Exchange Act [15 U.S.C. § 78l] or that is required to file reports pursuant to 

Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)]; 

VI. 

Retaining jurisdiction of this action in accordance with the principles of equity 

and the Federal Rules of Civil Procedure in order to implement and carry out the 

terms of all orders and decrees that may be entered, or to entertain any suitable 

application or motion for additional relief within the jurisdiction of this Court; and  

VII. 

Granting such other and further relief as this Court may determine to be just 

and necessary. 

JURY DEMAND 

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff 

Securities and Exchange Commission demands that this case be tried to a jury. 

Dated:  Washington, D.C. Respectfully submitted, 
             September___, 2024  

 
By:  ___________________________________ 

Case 1:24-cv-01150   Document 1   Filed 09/26/24   Page 29 of 30



30 

Zachary A. Avallone 
Tel. No. 202.795.0987 

Email: [email protected] 
Melissa Armstrong  

Tel. No. 202.551.4724 
Email: [email protected] 

United States Securities and Exchange 
Commission 
100 F Street, N.E. 
Washington, D.C. 20549 

Case 1:24-cv-01150   Document 1   Filed 09/26/24   Page 30 of 30


	COMPLAINT
	SUMMARY
	JURISDICTION AND VENUE
	DEFENDANTS
	OTHER RELEVANT PARTY
	FACTS
	A. Cassava’s Background
	B. Cassava’s Initial PTI-125 Trials
	C. Cassava’s Phase 2b Trial
	1) Round 1 Biomarker Testing
	2) Dr. Burns Provides Data Sufficient to Allow Dr. Wang to Partially Unblind Himself
	3) Round 2 Biomarker Testing
	4) Phase 2b Cognitive Testing

	D. Cassava Discloses Results from Phase 2b
	E. Cassava Raises Funds from Public Investors Based on Phase 2b Results
	F. Publicized Concerns About Dr. Wang
	G. Audit of Dr. Wang’s Laboratory

	OVERVIEW OF SECURITIES LAW VIOLATIONS
	A. Defendants Negligently Misrepresented Material Facts
	B. Recordkeeping and Reporting Requirements

	PRAYER FOR RELIEF