Cassava Sciences forms an internal panel after US regulatory probes two of their employees

Cassava Sciences, a Texas-based pharmaceutical company, will form a committee to evaluate new probes by U.S. regulators and investigate two senior employees, days after a medical professor linked to the company was charged with fraud.

As per a Reuters report, federal prosecutors charged Hoau-Yan Wang, a doctor who collaborated with Cassava, with fraud for allegedly submitting fabricated data to the National Institutes of Health related to an experimental treatment for Alzheimer's disease.

Wang's laboratory conducted the final analysis for the mid-stage study evaluating the company's Alzheimer's drug, simufilam.

When asked for their response, Cassava informed terminating its consulting relationship with Wang prior to his indictment, adding he did not have any involvement in its ongoing late-stage trials.

The company stated it was engaged with the U.S. Department of Justice (DoJ) and the Securities and Exchange Commission (SEC) on the investigations into the two employees.

The committee, consisting of independent directors, is evaluating the information contained in the DOJ indictment of Wang and will oversee disclosures in filings with the SEC regarding matters at issue, said Cassava.As soon as the news was out, Cassava Sciences’ shares dropped massively. The Texas-based company saw an 8% drop in early trade.