Cassava Announces Agreement to Settle Securities Class Action Litigation

Rhea-AI Summary

Cassava Sciences (NASDAQ: SAVA) announced a definitive agreement to settle the consolidated securities class action (In re Cassava Sciences, No. 1:21-cv-00751-DAE) for $31.25 million, resolving claims tied to purchases or option trades between September 14, 2020 and October 12, 2023 (with exclusions).

The settlement provides a complete release of the defined plaintiff class, is not an admission of fault, and remains subject to court approval and potential consolidation of later-filed related suits. Cassava previously recorded a $31.25 million loss contingency in Q2 2025 for this matter. Management said the resolution allows focus on advancing simufilam for TSC-related epilepsy.

Positive

• Settlement amount fixed at $31.25 million
• Legacy litigation resolved, freeing management focus
• Loss contingency of $31.25 million already reserved in Q2 2025

Negative

• Cash or settlement obligation of $31.25 million may affect near-term liquidity
• Court must still approve settlement and may consolidate later-filed suits

Key Figures

Settlement amount $31.25 million Cash payment to resolve consolidated securities class action

Class period start September 14, 2020 Beginning of defined plaintiff class trading period

Class period end October 12, 2023 End of defined plaintiff class trading period

Loss contingency reserved $31.25 million Fully reserved in Q2 2025 for this securities litigation

Market Reality Check

$2.20 Last Close

Volume Volume 1,731,629 vs 1,166,048 20-day average (relative volume 1.49x) ahead of this announcement. normal

Technical Shares at $2.38, trading slightly below the $2.44 200-day MA and 52% under the 52-week high.

Peers on Argus 1 Up

Peers in biotechnology showed mixed moves (e.g., MGNX up 6%, others modestly up or down), while only one momentum peer (EQ) appeared in scanners, suggesting today’s move in SAVA is more stock-specific than sector-driven.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Nov 12	Earnings and update	Positive	+4.8%	Q3 2025 results with narrowed net loss and solid cash position.
Oct 22	Board appointment	Positive	-7.0%	Seasoned biopharma executive added to board to support simufilam plans.
Aug 25	Conference participation	Neutral	-1.8%	Announcement of participation in H.C. Wainwright investment conference.
Aug 14	Earnings and update	Positive	+5.7%	Q2 2025 results with litigation contingency and TSC-related epilepsy progress.
Aug 07	Management change	Positive	-6.4%	Appointment of epilepsy-focused CMO to guide simufilam clinical development.

Pattern Detected

Recent news has often produced sizable but mixed price reactions, with management and governance updates sometimes selling off despite generally positive framing, while financial updates tied to simufilam/TSC have tended to see positive alignment.

Recent Company History

Over the past several months, Cassava has shifted focus toward simufilam for TSC‑related epilepsy while tightening expenses. Q2 and Q3 2025 updates highlighted reduced R&D, narrowing losses, and cash balances above $100M, with the Q2 result impacted by a $31.25M litigation contingency. Management changes, including a new CMO and director, supported this strategic pivot. Today’s settlement announcement directly follows those prior disclosures about the loss contingency, effectively resolving the consolidated securities action that had already been reserved on the balance sheet.

Regulatory & Risk Context

Active S-3 Shelf Registration 2025-11-12

$200,000,000 registered capacity

An effective S-3 shelf filed on Nov 12, 2025 allows Cassava to offer up to $200,000,000 in various securities, including an at-the-market program of up to $50,000,000 in common stock. Proceeds are designated for general corporate purposes and working capital, providing flexibility to raise capital over the shelf’s term.

Market Pulse Summary

This announcement finalizes a definitive agreement to settle the consolidated securities class action for $31.25M, covering trades between September 14, 2020 and October 12, 2023. Cassava had already recorded a matching loss contingency in Q2 2025, so the financial impact was previously reflected in filings. With this legacy litigation addressed, attention returns to simufilam’s development in TSC-related epilepsy and to how the company utilizes its existing $200M shelf capacity over time.

Key Terms

securities class action litigation regulatory

"agreement to resolve the previously disclosed consolidated securities class action litigation pending"

A securities class action is a group lawsuit brought by investors who claim they were harmed by false statements, misleading disclosures, or other misconduct related to a company’s securities. Think of it like a neighborhood suing a contractor together: it pools many individual complaints into one case, and the outcome can mean large legal costs, settlements, changes in management or disclosures, and sharp moves in a company’s stock price — all of which directly affect investors’ returns and risks.

call options financial

"purchasers or acquirers of Company common stock or call options on Company common stock"

A call option is a contract that gives its buyer the right, but not the obligation, to buy a specific number of shares at a predetermined price within a set time. Think of it like a refundable reservation to purchase a stock later at today’s agreed price: investors use calls to profit from expected price rises with smaller upfront cost than buying the stock outright, or to hedge and manage exposure, while the most they can lose is the amount paid for the contract.

put options financial

"or sellers of put options on Company common stock between September 14, 2020"

A put option is a financial contract that gives the holder the right to sell a specific asset at a predetermined price within a set period. Investors use put options to protect against potential declines in the value of an asset or to profit if they believe prices will fall, similar to reserving the option to sell an item at today’s price even if its market value drops later.

loss contingency financial

"Cassava fully reserved a loss contingency of $31.25 million in the second quarter"

A loss contingency is a potential future cost a company might have to pay because of events such as lawsuits, product claims, environmental cleanups or unresolved tax disputes. Investors care because these risks can reduce future cash, profits and company value; when a loss is likely and can be reasonably estimated, companies must set aside money or disclose it, much like spotting a dark cloud that might turn into a storm and planning accordingly.

AI-generated analysis. Not financial advice.

AUSTIN, Texas, Dec. 23, 2025 (GLOBE NEWSWIRE) -- Cassava Sciences, Inc. (NASDAQ: SAVA, “Cassava”, the “Company”), a biotechnology company focused on developing novel, investigational treatments for central nervous system (CNS) disorders such as Tuberous Sclerosis Complex (TSC)-related epilepsy, today announced that it has reached a definitive agreement to resolve the previously disclosed consolidated securities class action litigation pending in the United States District Court for the Western District of Texas Austin Division (In re Cassava Sciences, Inc. Securities Litigation, No. 1:21-cv-00751-DAE) (the “Consolidated Securities Action”). This lawsuit was originally filed in 2021.

Under the agreement, Cassava will pay $31.25 million to achieve a complete settlement and release of all claims and causes of action that have been or could be asserted by the plaintiffs and the plaintiff class, which is defined as all purchasers or acquirers of Company common stock or call options on Company common stock or sellers of put options on Company common stock between September 14, 2020 and October 12, 2023 (subject to certain exclusions). The court will decide whether later-filed securities class action litigation should be consolidated into the Consolidated Securities Action. The settlement is not an admission of fault or wrongdoing by the Company.

Cassava fully reserved a loss contingency of $31.25 million in the second quarter of 2025 relating to the Consolidated Securities Action.

“We are pleased to announce that we have reached an agreement to resolve our most significant, legacy litigation,” said Rick Barry, President and Chief Executive Officer of Cassava. “With this agreement, we can dedicate our attention and resources to the continued development of simufilam as a potential treatment for TSC-related epilepsy.”

About Simufilam

Simufilam is a proprietary, investigational oral small molecule believed to modulate activity of the filamin A protein, which regulates diverse aspects of neuronal development¹.

About Cassava Sciences, Inc.

Cassava Sciences, Inc. (NASDAQ: SAVA), is a biotechnology company focused on developing novel, investigational treatments, including simufilam, for central nervous system disorders, such as tuberous sclerosis complex (TSC)-related epilepsy, and potentially other indications. Simufilam is a proprietary, investigational oral small molecule believed to modulate activity of the filamin A protein, which regulates diverse aspects of neuronal development¹. The Company is planning a Phase 2 proof-of-concept study to evaluate simufilam in patients with TSC-related epilepsy, collaborating closely with the TSC Alliance and key opinion leaders. The program is based on a method of treatment patent issued in 2025 and in-licensed from Yale University. Cassava is based in Austin, Texas.

For more information, please visit: https://www.CassavaSciences.com

References:

1. Zhang L, Bartley CM, Gong X, Hsieh, LS.; LinTV, Feliciano DM, Bordey A. "MEK-ERK1/2-Dependent FLNA Overexpression Promotes Abnormal Dendritic Patterning in Tuberous Sclerosis Independent of mTOR. Neuron (2014) 84 (1), 78-91.  DOI: 10.1016/j.neuron.2014.09.009
   
   

For More Information Contact:
Investors
Sandya von der Weid
svonderweid@lifesciadvisors.com

Company
Eric Schoen, Chief Financial Officer
(512) 501-2450
ESchoen@CassavaSciences.com
IR@cassavasciences.com

Cautionary Note Regarding Forward-Looking Statements:

This news release contains forward-looking statements that may include but are not limited to statements regarding: the potential resolution of certain securities litigation and our loss contingency estimates related thereto, plans to conduct clinical studies with simufilam, our plans to conduct additional preclinical studies of simufilam relating to seizures in TSC, the potential for simufilam as a treatment for TSC-related epilepsy and other potential indications, the timing of anticipated milestones, the timing of payment of an estimated loss contingency related to the settlement of the Consolidated Securities Action, recorded in second quarter 2025, and expected cash balances and cash use in future periods. These statements may be identified by words such as “anticipate”, “before”, “believe”, “could”, “expect”, “forecast”, “intend”, “may”, ”pending”, “plan”, “possible”, “potential”, “prepares for”, “will”, and other words and terms of similar meaning.

Such statements are based on our current expectations and projections about future events. Such statements speak only as of the date of this news release and are subject to a number of risks, uncertainties and assumptions, including, but not limited to, those risks relating to the ability to advance preclinical and clinical studies related to TSC-related epilepsy, and other potential indications, the ability to successfully carry out the Company’s obligations under the Yale License Agreement, the ability to initiate an initial proof-of-concept study of simufilam in TSC-related epilepsy, and other risks inherent in drug discovery and development or specific to Cassava Sciences, Inc., as described in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and Quarterly Report on Form 10-Q for the period ended September 30, 2025, and subsequent reports to be filed with the SEC. The foregoing sets forth many, but not all, of the factors that could cause actual results to differ from expectations in any forward-looking statement. In light of these risks, uncertainties and assumptions, the forward-looking statements and events discussed in this news release are inherently uncertain and may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, you should not rely upon forward-looking statements as predictions of future events. Except as required by law, we disclaim any intention or responsibility for updating or revising any forward-looking statements. For further information regarding these and other risks related to our business, investors should consult our filings with the SEC, which are available on the SEC's website at www.sec.gov.

All of our pharmaceutical assets under development are investigational product candidates. These have not been approved for use in any medical indication by any regulatory authority in any jurisdiction and their safety, efficacy or other desirable attributes, if any, have not been established in any patient population. Consequently, none of our product candidates is approved or available for sale anywhere in the world.

Our clinical results from earlier-stage clinical trials or preclinical studies may not be indicative of future results from later-stage or larger scale clinical trials and do not ensure regulatory approval. You should not place undue reliance on these statements or any scientific data we present or publish.

We are in the business of new drug discovery and development. Our research and development activities are long, complex, costly and involve a high degree of risk. Holders of our common stock should carefully read our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q in their entirety, including the risk factors therein. Because risk is fundamental to the process of drug discovery and development, you are cautioned to not invest in our publicly traded securities unless you are prepared to sustain a total loss of the money you have invested.

FAQ

What did Cassava (SAVA) agree to pay to settle the securities class action on December 23, 2025?

Cassava agreed to a $31.25 million definitive settlement to resolve the consolidated securities class action.

Does the $31.25 million settlement mean Cassava admitted wrongdoing (SAVA)?

No; the company says the settlement is not an admission of fault or wrongdoing.

Was the $31.25 million charge for the Cassava securities settlement already reflected in financials (SAVA)?

Yes; Cassava fully reserved a $31.25 million loss contingency in Q2 2025 related to this action.

Which investors are covered by the Cassava (SAVA) settlement class and relevant dates?

The plaintiff class covers purchasers or acquirers of Cassava common stock or certain option transactions between Sept 14, 2020 and Oct 12, 2023, subject to exclusions.

Is the Cassava (SAVA) settlement final or still subject to court approval?

The settlement remains subject to court approval, and the court will decide on possible consolidation of later-filed related cases.