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By Marisa Taylor and Mike Spector
WASHINGTON (Reuters) - The U.S. Justice Department has opened a criminal investigation into Cassava Sciences Inc involving whether the biotech company manipulated research results for its experimental Alzheimer's drug, two people familiar with the inquiry said.
The Justice Department personnel conducting the investigation into Austin, Texas-based Cassava specialize in examining whether companies or individuals have misled or defrauded investors, government agencies or consumers, according to the sources, who spoke on condition of anonymity. The sources did not provide details of the focus of the probe and whether the department was looking into any specific individuals.
As in any Justice Department investigation, this one could lead to criminal charges or be closed without any charges being brought.
In an emailed statement, Kate Watson Moss, a lawyer representing Cassava, neither confirmed nor denied the existence of the Justice Department criminal probe.
"To be clear: Cassava Sciences vehemently denies any and all allegations of wrongdoing," Watson Moss said, adding that the company "has never been charged with a crime, and for good reason - Cassava Sciences has never engaged in criminal conduct."
Watson Moss added that Cassava Sciences has received confidential requests for information from government agencies, but declined to identify those agencies. Watson Moss said that "Cassava Sciences has provided information in response to these requests in full satisfaction of its legal obligations." Watson Moss added that no government agency has accused the company of wrongdoing.
A Justice Department spokesperson declined to comment.
The company already was facing scrutiny from the U.S. Securities and Exchange Commission and investors after two physicians from outside Cassava last year made allegations of data manipulation and misrepresentation involving research underpinning the company's Alzheimer's drug, called simufilam.
Cassava, a small company with about two dozen employees, in a statement last year called the allegations of data manipulation and misrepresentation "false and misleading."
Cassava on its website describes simufilam as taking an "entirely new approach to treating Alzheimer's, the most common form of dementia and a progressive brain disorder that affects nearly 6 million Americans. The oral medication restores the normal shape and function of a key protein in the brain, the company said.
A PETITION TO THE FDA
The criminal investigation began, according to the sources, sometime after a petition was filed in August 2021 with the U.S. Food and Drug Administration by a lawyer on behalf of two physicians asking the agency to halt clinical trials of simufilam. The physicians are David Bredt, a neuroscientist formerly at Johnson & Johnson's Janssen, and Geoffrey Pitt, a cardiologist who serves as director of Weill Cornell Medicine's Cardiovascular Research Institute in New York.