Cassava Sciences (SAVA 3.29%), a neuroscience drug developer, released its second-quarter 2025 results on August 14, 2025, illustrating a significant transformation in its business focus and financial results. The company shifted its lead drug, simufilam, from Alzheimer’s disease to Tuberous Sclerosis Complex (TSC)-related epilepsy after terminating its Alzheimer’s program. The company reported a net loss of $44.2 million (GAAP) for Q2 2025, down sharply from net income of $6.2 million (GAAP) in Q2 2024, reflecting substantial legal expenses. There were no Wall Street consensus estimates available for comparison, as the company generates no product sales. The quarter marks a reset for the business, with operational and legal expenses still well above its cash inflows as it repositions for future growth in a new therapeutic area.
| Metric | Q2 2025 | Q2 2024 | Y/Y Change |
|---|---|---|---|
| Net Income (Loss) | $(44.2) million | $6.2 million | (812.9%) |
| EPS (Diluted) | $(0.92) | $0.13 | N/A |
| Research & Development Expenses | $5.1 million | $15.2 million | (66.4%) |
| General & Administrative Expenses | $40.3 million | $46.2 million | (12.8%) |
| Cash and Cash Equivalents (at quarter end) | $112.4 million | N/A | N/A |
Company Overview and Strategic Focus
Cassava Sciences is a clinical-stage biotechnology firm developing novel treatments for central nervous system (CNS) diseases. Its main asset, simufilam, is a proprietary oral drug that initially targeted Alzheimer’s disease. Following disappointing clinical trial results and an inability to meet primary endpoints, the company terminated its Alzheimer’s program in 2025.
Now, Cassava Sciences is focusing on TSC-related epilepsy, a rare neurological condition affecting roughly 50,000 patients in the United States. The company’s success will be tied to the scientific progress of simufilam in this new indication, the strength of its intellectual property, and its ability to navigate regulatory and financial risks as a pre-revenue company. Securing a credible scientific and regulatory path forward, while managing expenses and legal liabilities, is central to its business model.
Pivotal Developments in the Quarter
The second quarter marked a transition for Cassava Sciences. The company reported a significant net loss for Q2 2025, largely due to the recognition of a $31.25 million loss contingency for the potential settlement of securities litigation. This legal provision, paired with continued administrative spending, weighed heavily on its financials. Net cash used in operations for the first half of 2025 totaled $16.3 million, aligning with internal expectations, and the company ended Q2 2025 with $112.4 million in cash and cash equivalents.
The company pivoted the simufilam program from Alzheimer’s disease to TSC-related epilepsy after failing to reach endpoints in prior Phase 3 trials. Simufilam is designed to stabilize the protein filamin A (FLNA) in the brain, which could potentially reduce seizure frequency and improve neurological function. Early preclinical results showed simufilam “reduced seizure frequency by 60%” in a mouse model, as reported in published studies by Dr. Angélique Bordey (Neuron 2014; Science Translational Medicine 2020), though not all parameters achieved statistical significance. The company now aims to initiate proof-of-concept clinical studies in TSC-related epilepsy in H1 2026. This move places the drug at an early, preclinical stage for its new lead indication.
General and administrative expenses (GAAP) decreased from $46.2 million in Q2 2024 to $40.3 million in Q2 2025, reflecting the partial wind-down of the Alzheimer’s program and lower legal provisioning, though legal and compensation costs remain high. The company entered a new license agreement with Yale University to anchor its intellectual property in TSC-related epilepsy, further protecting its new research direction. Newly hired neuroscience executives, including a Chief Medical Officer with expertise in epilepsy, signal tighter alignment around the new pipeline focus.
Research and development expense dropped 66% year over year for Q2 2025, driven by the phasing out of Alzheimer’s activities. With all clinical development now concentrated on simufilam for TSC-related epilepsy, risk is heightened by the absence of revenue and the early stage of the drug’s development. The company faces a competitive landscape, as standard therapies like anti-epileptic drugs and mTOR inhibitors are established in the field, requiring simufilam to show clear advantages in efficacy or safety to gain traction.
Looking Ahead and Financial Outlook
Management projected net cash used in operations for the second half of 2025 at $47 million to $51 million, which includes the large one-time legal settlement provision. The company expects to end 2025 with $61 million to $65 million in cash, assuming no significant new expenditures. No product revenues are expected in the near term, and the company did not provide further financial guidance for subsequent quarters or for potential clinical trial costs after 2025.
For investors and stakeholders, key areas to monitor include the clinical advancement of simufilam for TSC-related epilepsy, the outcome of securities litigation, and management’s ability to maintain cash reserves during a period with no recurring revenue. The start of a proof-of-concept study represents a meaningful milestone, but until then, the company remains in a high-risk, early-stage profile with operational and financing uncertainty.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
