Summary
Coverage of the Alzheimer’s space would be incomplete without a blog post on Cassava Sciences. Now was the right time. Cassava Sciences has dominated the Alzheimer’s space and gave it a bad name. I believe it also explains why INmune Bio still only has the market cap it currently has. It is time to turn the page.
Doing due diligence on a company requires an assessment of the validity of any bear thesis. That of Cassava Sciences was always there, one just needed to look for it. Now that INmune Bio finally has one – since this week - I can say that I am not impressed. The quality of the bear thesis runs counter the high short interest. That may provide opportunities, the future will tell.
Though pursuing the same indication, INmune Bio differentiates itself from Cassava Sciences in pretty much all aspects which I consider relevant to investors. It’s time to take a deeper look.
Cassava Sciences’ four-year-long market domination
Introduction
Covering the Alzheimer’s space cannot leave Cassava Sciences undiscussed. Cassava Sciences has dominated the Alzheimer’s space for four years, and has been the talk of the town over that same period.
Though I had expected Cassava Sciences to fail, if it were only due to imperfect trial design, I chose to await the results of their Phase 3 program to do so. In a way, by imposing the clinical hold, the FDA has done INmune Bio a favor. Now that the space is finally cleared of any potentially fraudulent company, it is time to move on and see what actual progress is being made in the Alzheimer’s space.
The first Phase 3 data of Cassava Sciences were released on November 25, 2024, when the company announced that topline Phase 3 data did not meet the primary endpoints. Meanwhile, the website clinicaltrials.gov shows no study for which Cassava Sciences is still enrolling patients. That marks the end of the simufilam-saga.
In truth, I feel lied to. My first investment in the Alzheimer’s space was as an investor in Cassava Sciences, based on an article published on Seeking Alpha on January 13, 2021 entitled ‘Four Reasons Cassava Sciences Could Be The Best-Performing Stock of 2021’. I knew little about Alzheimer’s at the time, the stance of the article was compelling, and the investment turned out a success.
The company had no bear thesis at first sight…until investors saw one in mid-2021, by way of a massive Citizen Petition that slashed the share price in half in no time wiping out close to $2.5 billion in market value.
By that time, I had reviewed the entire neurodegenerative space for a first time, and had decided some time before that I would terminate my Cassava Sciences investment, primarily because:
- even after extensive study and gained understanding of the space, I had difficulties understanding the few research articles that existed on the mechanism of action of simufilam;
- the stock had almost reached a point where the bylaws could trigger massive compensation for management;
- I was no longer convinced that the company had the best drug for Alzheimer’s disease.
Looking for a Cassava bear
In 2021, though I had been reading up on the company as much as I could, I had not been able to retrieve a bear-case for the company. Yet the thesis did exist. On January 13, 2021, on the same day the above-mentioned article by Joe Springer had come out, a video on YouTube by Breaking Biotech covered Cassava Sciences positively but also mentioned:
“Bear case
I want to move on to the bear case because there is an argument to be made that this is just noise, and that there is no actual effect going on here, and one of the things I found particularly
interesting is that apparently there have been partial agonists or positive allosteric modulator of the alpha 7 nicotinic receptor and these have failed in clinical trials.
And you would assume that if you can influence the action between amyloid beta and this receptor you might have a case for improving Alzheimer's disease. Now the way the disease progress happens, binding of A-beta to the alpha 7 nicotinic receptor can occur at femtomolar concentrations, and what that means is that the binding is very tight, and if an antibody comes around that has less affinity to the receptor than A-beta, treating patients later in the disease might not influence the course of that disease at all. So that's a caveat where actually PTI 125 might be a benefit here but it would have been nice to see some validation of this target by previous trials.
Another thing to keep in mind is that filament A is later in the signaling pathway, so there might be other targets at amyloid beta that can cause disease.
Another thing is that most of the preclinical data was generated from the same lab, which you don't love to see. Maybe I'm just suspicious of academia, but it would have been nice to see some validation of this preclinical data from and completely unrelated laboratory, although I must say that the company themselves have been making a case obviously through their phase 1 and their phase 2a data to show that there is something going on here. But it is something to keep in mind.
And then the last thing is that the phase 2b data as well as the 2a data is only 28-day treatment, and is this truly long enough to see an effect?
And then finally the plasma CSF data that we see here is suggestive of something going on but
it's not a definitive indication of an effect here, so that's something also to keep in mind.”
Looking back at Cassava Sciences’ crash, having failed one phase 3 trial in Alzheimer’s and having terminated the other one, plus the fraud allegations and the Cassava Sciences settlement, I think that the above bear case – which already existed in January 2021 – contained very valid points. I also think it should have been highlighted to investors since early 2021. Good due diligence cannot exist without an effort to dig into a bear thesis.
Cassava Sciences’ controversial nature
Cassava Sciences thrived on controversy for years. I believe that, over time, some investors of Cassava Sciences may have become part of a cult-following, perhaps having been insufficiently informed of the competitive space, and perhaps having been misled into thinking that Cassava Sciences had the best results - even after it became apparent that these may not have been as good as first thought. I have seen many rather aggressive and sometimes ad hominem comments made by Cassava investors, if one chose to warn them or dispute an element of the underlying science or results.
I am sorry for the losses incurred by investors of Cassava Sciences, some of whom have placed high bets on the company’s success. If I had not been lucky enough to take my profits in time based on my insights gained in 2021, I could have been one of them. I want to avoid such a scenario going forward.
On Joe Springer
Cassava Sciences would not be Cassava Sciences without Joe Springer’s coverage. For years, his Investors Club/Tendies Club was the go-to for investors looking at the Alzheimer’s space. Joe Springer promoted himself as a number 1 ranked analyst, based on recommendations he had made in 2013 and 2014. In that light, I believe due diligence of that claim and his investing background was of essence to investors. As it appears, most of his past suggestions since 2013, such as TNXP, MKND, IMUC, FTEK and TA, had led to considerable losses over a longer timeframe. His discussions with Adam Feuerstein a praised biotech-critical journalist, and other persons in high regard on Wall Street go back to 2013, around the time of the failure of his first big pick, TNXP. In 2014, after TNXP’s debatable results, allegations were that Joe Springer had “pumped” a stock that may not have deserved that. In 2021, this time with regard to Cassava Sciences, similar discussions took place. Adam Feuerstein who claimed simufilam was inert and Cassava Sciences would ultimately fail was portrayed as the adversary of the truth, and has been insulted by many investors of Cassava Sciences. Controversy seems to be a driver of success. Joe Springer eventually made a business of his work on Cassava Sciences, charging $480 on a yearly basis. According to his website, there are - or were - about a 1,000 subscribers to his channel.
After the company’s topline results in November 2024, Joe Springer has not done further coverage on what was by that time renamed Cassava Sciences Channel on YouTube. The failed results were not discussed on that channel.
INmune Bio never saw coverage on that channel. I personally believe that could be a way for Joe Springer to redeem himself. But I am doubtful that coverage will every come.
I want to keep what happened to Cassava Sciences investors from happening to those investing in INmune Bio. Though bullish on the company, my intention is to keep an open mind and see asses the value of any negative points the story may have.
Consequences for INmune Bio
Cassava Sciences’ market domination was scientific and financial, in my eyes. The company claimed that its drug simufilam could improve cognition through a unique mechanism of action, which was easily understandable at first sight; misfolded filamin A lies at the basis of all of Alzheimer’s disease.
I think that, for years, Cassava’s market domination may have kept knowledgeable investors, funds and financiers from both looking at the space and considering investing in it.
Inevitably Cassava’s filamin-A-approach must have had investors wonder whether XPro could do the same with a different mechanism of action.
Like other companies in the space, I believe INmune Bio has suffered from that domination over the past years, which could explain in part why the company’s market cap is still so low. Nobody could know what would have happened if Cassava Sciences never released, highlighted or promoted the results the way it has done, nor how the space would have evolved without the extraordinary stock-focused investor Joe Springer.
On short interest and a (weak) bear thesis
In light of the high short percentage, historical failures in the space, and the above-mentioned fraud allegations with regards to the stock that has dominated the Alzheimer’s space for several years, I believe it is of essence for investors to remain aware of any potentially bearish arguments.
INmune Bio comes with a considerable short interest at this time, close to 40% of the float. This is a negative, not a positive, in my eyes. But it is a negative that could turn into a positive.
Until this week, there was no bear thesis. Since February 3, 2025, there is. I have published a reply to the bear thesis on February 4, 2025. I believe the bear arguments are weak, unfounded, and not well researched. The bear seemed to have done little in-depth research on INmune Bio's webinar on EMACC (https://www.youtube.com/watch?v=3-J3nx_uxMc), and didn't even know what the results on cognition of the Phase 1 trial had been, at three months, in Alzheimer's patients up to the severe stage of disease.
No cherry picking of biomarkers or other data here, by the way.
Whereas a bear thesis is an essential part of any investment, the lack of a (strong) bear thesis actually confirms my investment in INmune Bio in this case.
The +5 million shares shorted are probably the cause of INmune Bio’s descent in 2024, and will have to be covered at some point.
INmune Bio’s differentiated approach
Comparing Cassava Sciences and INmune Bio is comparing apples to oranges, I think. From a historical perspective at this point, that’s a good thing.
I believe INmune Bio wants to stand out from a scientific point of view. INmune Bio’s team consists of experts which are known and highly praised in the field. This goes for the whole team, and I believe should not be underestimated in the investment world. I believe it runs counter to companies such as Annovis (ANVS) and Anavex (AVXL).
For Xpro, Prof. Malù Tansey especially, who is a thought leader in the field of neurodegenerative disease, stands out – and Prof. Mark Lowdell does so for INKmune.
The mechanism of action of Xpro builds on the well-understood and constantly corroborated science that inflammation is a major target across neurodegenerative diseases and indications, including, TBI, stroke and spinal cord injury. I have a folder in the Discord room in which, almost on a daily basis, articles in this regard are added. I believe that’s quite the contrast to other approaches investors are looking at. XPro stands out with its differentiated approach. The scientific novelty lies in the discovery of tmTNF and solTNF as either anti-inflammatory or pro-inflammatory, and all the ensuing effects which have all been confirmed abundantly.
XPro should be able to be used for neurodegenerative indications beyond Alzheimer’s. In a way, Alzheimer’s is just the start.
The focus on inflammation and glial cells is what current scientific developments are focusing on mostly. Yet, investors seem to be largely unaware. There lies the opportunity.
The recognition by outside experts, both of the company and of XPro’s mechanism of action, is another differentiator.
The confirmation by similar approaches which have yielded good results in different neurodegenerative indiations, such as Coya Therapeutis (COYA) and BioVie (BIVI), is another differentiator with Cassava Sciences.
The enrichment-focused trial design, enrolling only patients with biomarkers of inflammation, is essential. I believe that, even if simufilam worked, neglecting that may have the company up for failure.
And finally, I believe INmune Bio is a company that holds ethics in high regard. With histories such as those of Cassava Sciences and Athira Pharma, this value is important.
INmune Bio Investor Discord goals
In the Discord room that I have opened up for INmune Bio investors since January 2025 (https://discord.gg/JEA8r7wCGY), I try to allow investors to keep an open mind. Bear arguments are welcome at all time. There will be no asking investors to show their positions. There should be no echo chamber, no payment, no idealizing the company, no claim of knowing it better than others. The content of any of my posts, whether here or elsewhere, is open for debate, and if I will consider it appropriate, I will retract or adapt them. I have no intention to proceed to defamation, or to proceed to attacks in personam. I would like investors to keep it civil, and value the discussions, my research and my work.
Conclusion
Coverage of the Alzheimer’s space would be incomplete without a blog post on Cassava Sciences. With all of the company’s programs having now been terminated, I believed now was the right time. Cassava Sciences has dominated the Alzheimer’s space for years, and I believe may have prevented other interesting approaches from receiving attention and funding. Cassava Sciences also gave the space a bad name. It is time to turn the page.
Doing due diligence on a company requires an assessment of the validity of any bear thesis. The bear thesis on Cassava Sciences had always existed, made valid points, and has prevailed in the end. In the case of INmune Bio, a bear thesis did not exist until this week. Now that we have one, I can say that I am not impressed. The quality of the bear thesis runs counter the high short interest. That may provide opportunities, the future will tell.
Cassava Sciences has thrived on controversy and in that sense, a coverage of that company would not be complete without covering Joe Springer, who has made coverage of the company his business. Unfortunately, INmune Bio was never covered on his channel.
Though pursuing the same indiation, INmune Bio differentiates itself from Cassava Sciences in pretty much all aspects which I consider relevant to investors. Those include the experts it has on board, the well-understood and constantly confirmed approach, the focus on what science is currently mostly looking at, the recognition by outside experts, the confirmation by similar approaches, the enrichment-focused trial design, and the company’s ethics.
As for myself, though long INmune Bio, I have no intention to make coverage of the company my business model. Managing the disccord room for INmune Bio investors, researching and drafting blog posts require a decent amount of my time and work, but that chatroom and this website come free of charge, and as long as everything remains civil, the knowledge is there and I hope that remains the case going forward.
That’s all for now. I am looking forward to working on an upcoming blog post which actually gets me excited and which, I hope, sees the light of day in a week (or two)….
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Feel free: https://discord.gg/JEA8r7wCGY