Editor's Note: This article was updated on Aug. 31 to reflect that Labaton Sucharow was representing clients with short positions in Cassava Sciences when it filed the citizen petition filed with the FDA.

The stock market had a generally positive tone on Wednesday morning, although gains were modest after more sizable advances earlier in the week. As of 11:30 a.m. EDT, the Nasdaq Composite (^IXIC 0.03%) was higher by just 0.1%, although that will be enough to send the index to a new record high if it holds on to its gains for the remainder of the trading session.

Big-name Nasdaq stocks get a lot of attention, but on Wednesday it was a couple of smaller stocks that made noteworthy moves. BioLife Solutions (BLFS -1.43%) posted a strong gain on news that will lift its profile, but Cassava Sciences (SAVA -1.86%) fell sharply amid questions from short-sellers about a key product.

BioLife takes its first step

Shares of BioLife Solutions jumped more than 16% on Wednesday. Investors celebrated recognition that the small biotech company is steadily growing.

Person looking through microscope in a lab.

Image source: Getty Images.

BioLife found out that it will join the S&P SmallCap 600 Index. The move will be effective beginning next Monday morning, Aug. 30. The move comes as a result of the domino effect of various replacements across the S&P index spectrum, as an opening in the S&P 500 led to the promotion of a current MidCap 400 member to take its place. A current SmallCap 600 member will fill in the gap in the mid-cap index, and BioLife was chosen to fill the resulting open spot in the small-cap index.

BioLife has seen huge growth in the past year and a half, with sales nearly tripling. Much of that growth has resulted from rising awareness of the value of cold chain packaging, lab freezers, and biopreservation equipment in light of the COVID-19 pandemic, with some vaccines requiring special handling to preserve their efficacy. More broadly, rising levels of activity in the biopharma space have strengthened BioLife's customer base.

Joining a small-cap index is an important step for any company, but for BioLife, it could be just the beginning of a longer-term journey. If it can execute well on its business model, then BioLife might well graduate to indexes for larger companies in the years to come.

Cassava faces scrutiny

Meanwhile, shares of Cassava Sciences were down 22%. The stock had fallen as much as 32% earlier in the session as investors tried to assess the implications of a petition sent to the U.S. Food and Drug Administration. The petition was filed by Labaton Sucharow, which said in an Aug. 26 press release that it represented clients who have short positions in Cassava Sciences.

Cassava's sole clinical-stage candidate treatment is simufilam, which is intended to help patients with Alzheimer's disease. Alzheimer's has been a hot area lately, with a couple of drugs receiving FDA approval. The citizens' petition, filed by a law firm, calls for the FDA to force Cassava to halt clinical studies amid allegations that the biotech's sole academic laboratory partner produced data inconsistent with results from another lab.

Cassava has denied the allegations, simply stating that the petition's claims are false and misleading and standing behind its studies. CEO Remi Barbier tried to paint a calm picture, arguing that the facts should provide the final answer.

Optimism about Alzheimer's treatments has lifted Cassava's stock more than tenfold just since the beginning of the year. Any lingering concerns about simufilam could threaten the company's long-term growth prospects and cause more of those share-price gains to erode.