A Maryland federal grand jury on Thursday indicted neuroscientist Hoau-Yan Wang, a longtime Cassava Sciences collaborator, for allegedly defrauding the NIH out of about $16 million in federal grant funds.
Wang, who’s a medical professor at the City University of New York, has been in the spotlight for at least three years since facing accusations that he committed scientific misconduct on 20 research papers, including manipulating images in a 2012 paper in The Journal of Neuroscience.
The early research backed Cassava’s lead drug, an Alzheimer’s treatment that’s expected to see Phase 3 results by the end of this year, Cassava said in its most recent earnings update.
“From approximately May 2015 through approximately April 2023, Wang allegedly engaged in a scheme to fabricate and falsify scientific data in grant applications made to the NIH on behalf of himself and the biopharmaceutical company,” the Department of Justice said Friday.
The DOJ said that Wang’s alleged scientific data falsification in the NIH grant applications “related to how the proposed drug and diagnostic test were intended to work and the improvement of certain indicators associated with Alzheimer’s disease after treatment with the proposed drug.”
Wang did not immediately respond to requests for comment. Cassava said in a statement, “Dr. Wang and his former public university medical school have had no involvement in the Company’s Phase 3 clinical trials of simufilam.”
Cassava faced an SEC investigation over the manipulation issues in 2021, but the company maintains that the claims haven’t gone anywhere. In October, CUNY paused its internal investigation into Wang after “questions regarding the confidentiality and integrity” were raised regarding the investigation, the university said at the time.
Cassava, which has maintained its innocence, has seen its stock price $SAVA boomerang from $7 per share at the start of 2021 to a high of $117 before the manipulation claims. It’s now down to about $10 per share. Shares fell about 40% on Friday afternoon.
If convicted, the DOJ says Wang faces a maximum penalty of 10 years in prison for major fraud, 20 years in prison for each count of wire fraud, and five years in prison for false statements.
Editor’s note: Updated with comment from Cassava.