Cassava Sciences revises executive bonus plan

Cassava Sciences Inc. (NASDAQ:SAVA), a pharmaceutical company with a market capitalization of $125 million, announced significant amendments to its executive compensation plan following a court-approved settlement. According to InvestingPro data, the company maintains a strong liquidity position with a current ratio of 11.62, though it’s currently burning through cash reserves. On Monday, the company’s board of directors approved changes to the 2020 Cash Incentive Bonus Plan (CIB Plan), which now include a new condition for bonus payouts to its top executive.

The adjustments, effective from March 6, 2025, stipulate that the Chairman, President, and CEO will not receive any bonus payments unless the U.S. Food and Drug Administration approves the company’s leading drug candidate, simufilam, for any indication, barring a merger transaction. This decision comes as the company faces significant financial challenges, with InvestingPro reporting negative EBITDA of $140.31 million in the last twelve months.

The CIB Plan, which offers potential cash bonuses based on market capitalization increments, will now prevent any bonus payments to plan participants unless the company is involved in a merger or has sufficient cash on hand. To date, no cash bonuses have been distributed under the CIB Plan. With the stock trading at $2.58, down over 85% in the past year, these changes reflect the company’s focus on preserving capital. Get deeper insights into Cassava Sciences’ financial health and 11 additional key metrics with InvestingPro.

Furthermore, in the event of a merger, the Chairman, President, and CEO will be entitled to a bonus based solely on the merger’s terms rather than the market capitalization milestones.

The Compensation Committee also exercised its discretion on February 13, 2025, to set all unallocated bonuses to zero and to rescind the CIB Plan to the extent allowed by the amended plan. As of now, no individual holds the combined roles of Chairman, President, and CEO.

This update is based on a press release statement and the full details of the amended CIB Plan can be found in the exhibit attached to the company’s SEC filing.

In other recent news, Cassava Sciences announced a significant development with the acquisition of an exclusive license for a treatment patent related to its drug candidate, simufilam. The patent, originating from Yale University, pertains to potential treatments for seizures in rare neurodevelopmental disorders, including tuberous sclerosis complex. This move could broaden the therapeutic applications of simufilam beyond its current investigational uses. Meanwhile, H.C. Wainwright maintained a Neutral rating on Cassava Sciences, emphasizing the importance of upcoming results from the ReFocus-ALZ Phase 3 trial for Alzheimer’s disease. The firm has not included potential revenue from simufilam for seizures or epilepsy in their financial models due to the preliminary nature of the data.

In another development, PainReform has executed an agreement to acquire DeepSolar, a solar analytics platform, marking a strategic shift for the company traditionally focused on pain treatment technologies. The acquisition is expected to close by the end of February 2025, pending customary conditions. DeepSolar’s AI-driven platform offers real-time monitoring and performance analytics for solar energy assets, potentially reducing operational costs and maximizing production. PainReform’s Chairman, Ehud Geller, described the acquisition as a unique opportunity to tap into the rapidly growing solar energy market. Despite this pivot, PainReform assures stakeholders of its continued commitment to its core pharmaceutical business.

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