Cassava Sciences Shares Defy Logic with Sharp Rally

In a move that appears to defy fundamental logic, shares of Cassava Sciences surged dramatically on Wednesday. The stock climbed over 7% despite the company confirming a significant delay in a key clinical program. This paradoxical price action raises questions about the forces driving the equity when the underlying news was decidedly negative.

The catalyst for the delay stems from a request by the U.S. Food and Drug Administration (FDA). The regulator has asked for additional information regarding the planned epilepsy study for the drug candidate Simufilam. Specifically, the FDA requires more detailed risk assessment data before authorizing the trial for tuberous sclerosis complex (TSC). This new regulatory requirement has pushed the projected start of the clinical study into the first half of 2026, marking a clear setback for the company's pipeline advancement.

Market Reaction Contradicts the News

Contrary to what one might expect, the market responded bullishly. The stock closed Wednesday's session at $3.10, representing a substantial gain of 7.27%. Notably, this upward movement wasn't driven by typical open-market activity. An analysis of trading data reveals an unusual pattern:

• A striking 59.41% of the day's total volume of 426,685 shares was traded in dark pools.
• This level of off-exchange trading is significantly higher than the 30-day average of 53.57%.

Such substantial activity away from public exchanges suggests institutional or speculative involvement that propelled the share price against the negative fundamental backdrop.

Should investors sell immediately? Or is it worth buying Cassava Sciences?

High Short Interest Adds Fuel to Volatility

The stock's volatility is further amplified by an exceptionally high level of short interest. Currently, short sellers have positions in 7.32 million shares, equating to roughly 15.52% of the public float. With a days-to-cover ratio of 7.8, the stock remains highly susceptible to short-term squeezes. This context leads to speculation: could the recent rally be fueled, in part, by short sellers beginning to cover their positions in anticipation of further price increases?

Key Data Points at a Glance

The conflicting signals in the market can be distilled into a few critical metrics:

• Share Price (Dec. 3): $3.10 (+7.27%)
• Short Interest: 15.52% of public float
• Dark Pool Volume: 59.41% of daily turnover
• Q3 2025 EPS: -$0.22 (Estimate: -$0.27)
• Next Catalyst: Simufilam study start delayed to H1 2026

While the company's latest quarterly results beat estimates, it still reported a loss of $0.22 per share. With a market capitalization hovering around $146 million, investors continue to bet heavily on the long-term potential of Cassava's pipeline, choosing to overlook immediate setbacks. The central question remains: how long can this speculative patience last?