(Bloomberg) -- Drugmaker Cassava Sciences Inc. and two former executives agreed to pay more than $40 million to resolve US Securities and Exchange Commission claims they misled the public about the success of an Alzheimer’s drug trial.
Cassava published results in 2020 based on hand-selected data that showed patients’ memories improved, though the full data showed no measurable progress, the SEC said in a statement Thursday announcing the settlement. The company later raised hundreds of millions of dollars in funding, the regulator said.
“Our capital markets can and should be a powerful engine for innovation in the development of new and potentially life-altering therapeutics,” said Mark Cave, associate director of the SEC’s enforcement division.
The company, which the SEC accused of violating antifraud provisions of federal securities laws, will shoulder the vast majority of the punishment — $40 million — in an agreement subject to a judge’s approval, the regulator said.
Former Chief Executive Officer Remi Barbier agreed to pay $175,000 for his role in disclosures, the agency said. And Cassava’s former senior vice president of neuroscience, Lindsay Burns, who handled the data, reached an $85,000 accord. They and the company didn’t admit or deny wrongdoing, the SEC said.
The Austin-based company, which previously disclosed a Justice Department inquiry, said it took steps to improve corporate governance and transparency and doesn’t expect criminal charges. “Cassava is pleased to put this matter behind us,” its new CEO, Richard Barry, said in a statement.
There was no immediate response to messages seeking comment from attorneys for Barbier and Burns.
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