Cassava’s stock dives 24% after report citing alleged criminal probe of data from Alzheimer’s drug trial

Shares of Cassava Sciences Inc. plunged 24.2% in premarket trading on Wednesday after Reuters reported that the Justice Department is investigating whether the company manipulated clinical data for a still-investigational Alzheimer’s disease drug, citing people familiar with the matter. Cassava put out a news release in December that said a scientific journal did not find evidence of manipulated data in a 2005 paper authored by the company’s scientists after short sellers alleged data manipulation in some previously published research. Cassava’s Alzheimer’s drug candidate is currently in Phase 3 clinical trials. The company did not immediately respond to a request for comment. Cassava’s stock has tumbled 50.3% this year, while the S&P 500 has declined 16.7%.

Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.