Cassava pivots to TSC epilepsy, trims R&D; cash runway 12 months amid heavy losses, litigation

Cassava Sciences, Inc. (NASDAQ: SAVA) - quick read on what's happening inside the company

Snapshot (figures from 10‑Q, all amounts presented by the company in thousands unless noted)
* Cash and cash equivalents: $112,381
* Total assets: $135,384
* Total liabilities: $47,411
* Stockholders' equity: $87,973
* Shares outstanding (Aug 12, 2025): 48,307,896
* Accumulated deficit: $(472,738)

Key income statement and cash-flow points
* Q2 2025 R&D expense: $5,116 vs Q2 2024 $15,198 (three‑month); six months 2025 R&D $18,782 vs six months 2024 $31,431 - big reduction driven by phase‑out of Alzheimer's programs.
* Q2 2025 General & Administrative: $40,276 vs Q2 2024 $46,204; six months G&A $51,196 vs $49,905 - elevated due to legal costs and stock‑based comp.
* Total operating expenses Q2 2025: $45,392 vs Q2 2024 $61,402; six months 2025: $69,978 vs $81,336.
* Net income (loss): Q2 2025 $(44,224) vs Q2 2024 $6,155; six months 2025 $(67,627) vs six months 2024 $31,198.
* Basic EPS: Q2 2025 $(0.92) vs Q2 2024 $0.13; six months basic $(1.40) vs $0.70.
* Net cash used in operating activities (six months): $(16,283) in 2025 vs $(37,368) in 2024 - cash burn improved year‑over‑year.
* Cash runway commentary: management believes current working capital is sufficient for at least the next 12 months (company statement).

Positive aspects (income statement & operations)
* Material reduction in R&D spend after phasing out the large Alzheimer's program - lowers near‑term cash burn ($5.1M R&D in Q2 vs $15.2M prior year).
* Operating cash use improved: $16.3M used in first half 2025 vs $37.4M in first half 2024 (better working‑capital dynamics).
* Cash balance still meaningful: $112.4M on hand as of June 30, 2025 (per company).
* Strategic pivot: License with Yale (Feb 26, 2025) to pursue simufilam for TSC‑related epilepsy and positive preclinical TSC data announced Aug 4, 2025 - creates a clear R&D focus and an IND / proof‑of‑concept path (targeting H1 2026 for first trial).

Negative aspects (income statement & risks)
* Large reported net loss and widening accumulated deficit: six‑month loss $(67,627); accumulated deficit $472,738 - no product revenue to offset expenses.
* G&A remains high due to legal and settlement-related charges and higher stock‑based compensation (total stock‑based comp was $9,806 for six months 2025).
* Significant litigation and regulatory costs: $40M civil penalty to SEC paid Nov 2024; the company recorded litigation loss contingencies totaling $35.25M at June 30, 2025 (including $31.25M reserved for the Consolidated Securities Action) - ongoing settlements remain a material cash/uncertainty factor.
* Interest income down (lower cash balances and rates): Q2 2025 $1,214 vs Q2 2024 $2,316.
* Revenue = $0 (no product sales); continued dependence on capital markets or other financings if development or settlement costs exceed expectations despite management's 12‑month statement.
* Stock‑based compensation and future option expense remain large - company expects to recognize ~$30.6M more as existing options vest per their disclosure.

Operational / corporate items to note
* Alzheimer's Phase 3 programs discontinued and phased out in Q2 2025; company refocused on TSC‑related epilepsy (simufilam).
* Yale license (Feb 26, 2025) - up to $4.5M in milestone payments plus royalties; milestones and royalty structure disclosed in filing.
* workforce reduction: Jan 7, 2025 cut of 10 employees (≈33% of affected group); one‑time costs ~$0.4M.
* Real‑estate exposure: company owns office complex; occupancy ~25% - higher vacancy hurting other income (leasing) and expected to push other losses.
* No warrants outstanding; prior 2024 warrant distribution and redemptions materially affected 2024 results but are not a 2025 factor.

What to watch next (near term)
* Progress toward IND filing and timing of the planned TSC proof‑of‑concept study (management target H1 2026).
* Outcome / settlement of the Consolidated Securities Action and other litigation - reserves indicate material exposure ($31.25M reserved currently).
* Quarterly cash burn vs guidance and any financing activity - cash of $112.4M gives runway commentary but litigation, trial starts or unexpected costs could change that.
* G&A trends and stock‑based compensation realization - a key driver of non‑cash and cash impacts.
* Any regulatory interactions (FDA) or new preclinical/clinical readouts for simufilam in TSC.

Bottom line: Cassava has reduced R&D cash outlays by exiting an expensive Alzheimer's program and has meaningful cash on hand, but the company is still loss‑making with large accumulated deficits and material litigation exposures. The business now hinges on the success of simufilam's pivot to TSC‑related epilepsy, the timing of clinical progress, and the resolution/cost of ongoing legal matters.