Overview
Cassava Sciences reported a 2.75% increase in its Nasdaq-listed shares on Thursday after announcing that the U.S. Department of Justice has closed its inquiry into allegations of research misconduct. The DOJ investigation was connected to allegations outlined in the indictment in United States v. Wang, which the department dismissed with prejudice on October 23, 2025.
Regulatory background and company statement
The DOJ conclusion follows Cassava's earlier resolution with the U.S. Securities and Exchange Commission. In September 2024 the company reached a settlement with the SEC related to negligence-based disclosure charges; as part of that settlement Cassava paid a monetary penalty without admitting or denying the allegations. Cassava said it cooperated fully with inquiries from both the DOJ and the SEC.
In a statement accompanying the announcement, Richard J. Barry, President and Chief Executive Officer of Cassava, said: "We welcome the resolution of these investigations and remain dedicated to maintaining the trust of all our stakeholders. As we move forward, we will continue to focus our efforts on developing a novel treatment for TSC-related epilepsy."
Market reaction
Investors reacted favorably to the news that federal probes have concluded. Market commentary included the view that closure of the DOJ and SEC matters removes a material source of uncertainty that had been weighing on the stock and the company’s outlook.
Key points
- Cassava’s stock rose 2.75% following the DOJ announcement that its inquiry has ended.
- The DOJ’s inquiry was linked to allegations in the indictment in United States v. Wang, dismissed with prejudice on October 23, 2025.
- The company previously settled with the SEC in September 2024 over negligence-based disclosure charges, paying a monetary penalty without admitting or denying the allegations.
Risks and uncertainties
- The SEC settlement required a monetary penalty, reflecting prior regulatory action that carried financial consequences for the company - a consideration for investors in biotech and capital markets.
- The company previously faced a DOJ inquiry and an indictment was filed in United States v. Wang, events that introduced uncertainty for the company’s operations and stock performance until the recent dismissal.
- While both federal investigations have concluded according to the company, investors remain attentive to any disclosures or developments related to regulatory or operational matters affecting the biotechnology sector.
Company focus
Cassava emphasized that it will continue to concentrate on developing investigational treatments for central nervous system disorders, including a novel candidate for Tuberous Sclerosis Complex (TSC)-related epilepsy. The company reiterated its cooperation with federal authorities and expressed a commitment to maintaining stakeholder trust as it proceeds with its clinical and development efforts.