Jordan Thomas’s Army of Whistle-Blowers

These are strange days for the American stock market, with the exuberance of investors defying the bleakest of outlooks. Yet, even in this warped moment, the outsized success last year of a tiny company called Cassava Sciences seemed exceptional. With only two dozen employees and no product revenue, the Austin-based biotech firm generated a stampede of investor enthusiasm that caused its stock to rise nearly fifteen hundred per cent. Cassava is run by Remi Barbier, a genial entrepreneur who wears wire-rimmed glasses and is given to ambitious predictions. It has been developing a novel treatment for Alzheimer’s, a pill called Simufilam, which is designed to attack the disease by fixing abnormalities of the protein filamin A. The medication has not yet received approval from the Food and Drug Administration, but clinical trials are under way.

Six million Americans suffer from Alzheimer’s, and any drug that could ameliorate the condition would represent a milestone in public health—and make billions of dollars. Cassava issued press releases touting the results of its clinical trials, and Barbier suggested that Simufilam was “the first drug—to our knowledge—that can restore cognition.” Word spread about the product on online forums, including Reddit, and Cassava became a “meme stock,” surging in value as it was hyped by relatively unsophisticated retail day traders. Cassava’s stock symbol is sava, and devotees of the company called themselves “savages.” They weren’t necessarily scientists, but they felt certain that Cassava would, in the words of one Redditor, “eradicate Alzheimer’s.” Another stockholder declared, “Ever since I seen the 10% conginitive [sic] improvement I’ve been convinced.” Barbier, meanwhile, told Fortune that a core group of institutional investors had looked at the preliminary data and concluded that, from an investment perspective, Cassava might be the next “Google or Tesla.” Last summer, a user on the Web site Seeking Alpha proclaimed, “cassava sciences is on the brink of making medical history,” enthusing, “CEOs of public companies don’t make these kinds of statements unless they can back it up.” In July, Cassava’s stock price surged to a hundred and thirty-five dollars, giving it a market value of roughly five billion dollars.

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