Cassava Sciences, Inc. (SAVA): 5 FORCES Analysis [Nov-2025 Updated]

You're assessing Cassava Sciences, Inc. (SAVA) after their dramatic Q2 2025 strategic exit from Alzheimer's and pivot into Tuberous Sclerosis Complex (TSC)-related epilepsy-a move that instantly reframes its competitive position from a broad failure to a high-risk, orphan drug bet. Honestly, this new focus, backed by $106.1 million cash as of September 30, 2025, means the market forces are now sharply defined: expect high supplier power due to specialized reagents, significant customer power from payers scrutinizing efficacy against generics, and a tough fight against established substitutes like Everolimus. To truly gauge the risk profile for the H1 2026 clinical start, you need a deep dive into how these five forces-rivalry, substitutes, suppliers, customers, and new entrants-shape the path for this biotech now.

Cassava Sciences, Inc. (SAVA) - Porter's Five Forces: Bargaining power of suppliers

When you look at the power suppliers hold over Cassava Sciences, Inc., you have to consider the highly specialized nature of their inputs, especially now that the focus is squarely on Tuberous Sclerosis Complex (TSC)-related epilepsy. For a company like Cassava Sciences, Inc., which is preparing to launch a proof-of-concept study in the first half of 2026, the suppliers aren't selling widgets; they are providing niche scientific expertise and materials.

Suppliers of highly specialized neuroscience reagents and Contract Research Organizations (CROs) are, by industry nature, concentrated. You can't just pick up the phone and find a dozen labs ready to run a highly specific preclinical assay for a novel CNS indication. This concentration naturally gives those specialized vendors more leverage. Furthermore, the reliance on CROs for clinical trials is high, especially as Cassava Sciences, Inc. ramps up for that planned H1 2026 study. While the company has streamlined its internal burn, cutting Research and Development (R&D) expenses to $4.0 million in the third quarter of 2025 from $17.7 million in the third quarter of 2024 due to the Alzheimer's program wind-down, this lower spend doesn't translate to massive negotiating leverage with a top-tier CRO needed for a rare disease trial.

Simufilam itself requires unique molecular compounds, and for a drug candidate at this stage, there are limited alternative vendors who can meet the required Good Manufacturing Practice (GMP) standards for clinical supply. This lack of fungibility means the existing supplier has a strong hand. The financial context shows they ended Q3 2025 with $106.1 million in cash and cash equivalents, with an estimated year-end 2025 cash range of $92 to $96 million. This runway, expected to support operations into 2027, gives them some breathing room, but it doesn't fundamentally change the supply chain dynamic for unique inputs.

The most concrete example of a non-substitutable input comes from the intellectual property side. The licensing of U.S. Patent No. 12,186,307 from Yale University is a key, non-substitutable input for the TSC indication. This agreement, effective February 26, 2025, grants Cassava Sciences, Inc. exclusive worldwide rights to the method of treatment for simufilam in TSC-related epilepsy. The terms Cassava Sciences, Inc. agreed to pay Yale are structured to reflect this exclusivity:

This structure shows that Yale, as the IP supplier, has significant power because the core technology for this new program is locked down. Furthermore, high switching costs exist for key research partners and specialized manufacturing. If Cassava Sciences, Inc. needed to change a specialized chemistry, manufacturing, and controls (CMC) vendor or a CRO currently running their preclinical work, the time and cost to re-qualify a new partner for a rare disease program targeting an H1 2026 start would be substantial. You're hiring before product-market fit, so you need reliable partners, and that reliability comes at a price.

The supplier power is further influenced by the internal structure of the relationship with the IP source. Dr. Angélique Bordey, whose research formed the basis of the licensed patent, is now the Senior Vice President (SVP) of Neuroscience at Cassava Sciences, Inc., while maintaining her tenured position at Yale School of Medicine part-time. This internal alignment helps mitigate some of the risk associated with the IP supplier, but the financial obligations remain firm.

Here's the quick math on the cost structure that impacts supplier leverage:

• Cash and Equivalents (as of September 30, 2025): $106.1 million.
• Net Cash Used in Operations (First Nine Months of 2025): $22.5 million.
• G&A Expense (Q3 2025): $7.9 million, which included $3.2 million in legal fees.
• R&D Expense (Q3 2025): $4.0 million.

What this estimate hides is the expected ramp-up in R&D spend once the TSC study begins in 2026, which will put more pressure on negotiating favorable terms with clinical suppliers now.

Cassava Sciences, Inc. (SAVA) - Porter's Five Forces: Bargaining power of customers

You're looking at Cassava Sciences, Inc. (SAVA) as a pre-revenue biotech, so the bargaining power of the customer-which in this case is primarily the third-party payer like Medicare or private insurers-is inherently high right now. Since Cassava Sciences, Inc. (SAVA) has no product sales as of Q2 2025, the company has zero leverage from established market presence or revenue streams. You see this reflected in their financials; cash and cash equivalents stood at $106.1 million as of September 30, 2025, which management projected would support operations into 2027. This cash runway is what they must manage while facing payer scrutiny for a future product.

For any drug to gain formulary access, payers demand clear clinical superiority, especially when an existing, approved therapy is already on the market. While you might think of generic anti-epileptic therapies (ASMs), the direct comparison for Cassava Sciences, Inc. (SAVA)'s new focus is against Novartis's established mTOR inhibitor. Payers will look at the cost-benefit ratio against this existing standard of care. For context on the high-cost environment that drives this scrutiny, new Alzheimer's disease treatments, which share the CNS space, were projected to cost the entire Medicare program $3.5 billion in 2025, with individual annual costs for similar therapies reaching $26,500 to $32,000 per patient.

The target market size itself concentrates payer attention. Cassava Sciences, Inc. (SAVA) has pivoted its lead asset, simufilam, toward Tuberous Sclerosis Complex (TSC)-related epilepsy, a rare condition with a US patient population estimated at approximately 50,000 people. Small patient populations often lead to higher per-patient pricing requests, which in turn triggers intense scrutiny from payers on clinical justification. The company is still in the early stages for this indication, planning to initiate proof-of-concept clinical studies in H1 2026, meaning they have not yet generated the human efficacy data required to counter payer demands.

However, the power of the customer is somewhat mitigated by the presence of a significant unmet need. Patients with TSC-associated seizures often struggle with existing options. To be fair, Novartis's everolimus (Votubia®/Afinitor®) is already approved for TSC-associated seizures, setting a high bar for efficacy. Still, reports indicate that more than 60% of patients with TSC who experience seizures stop responding to available anti-epileptic therapies. If Cassava Sciences, Inc. (SAVA) can prove clear, durable superiority in their upcoming trials, this refractory patient segment becomes a powerful argument for payer coverage, reducing customer bargaining power.

The availability of an established, approved mTOR inhibitor, like Novartis's everolimus, which is approved for TSC-associated partial-onset seizures, establishes a high benchmark for reimbursement. Payers will not simply cover a new treatment unless it demonstrates a meaningful step-change in outcomes over this existing option. The comparison is stark when you look at the landscape for existing TSC treatments versus the potential for a new therapy:

You should watch the data from the planned H1 2026 clinical study closely. That data will be the single biggest factor shifting the power dynamic away from the payers and toward Cassava Sciences, Inc. (SAVA). Finance: draft the projected cost of Phase 1/2 trials for TSC-epilepsy based on current R&D burn rates by end of Q1 2026.

Cassava Sciences, Inc. (SAVA) - Porter's Five Forces: Competitive rivalry

For Cassava Sciences, Inc. (SAVA), the competitive rivalry in its current focus area-Tuberous Sclerosis Complex (TSC)-related epilepsy-is best described as moderate-high, representing a significant shift from the hyper-crowded Alzheimer's disease space it recently exited. You're looking at a company that has made a decisive pivot, and that changes the competitive calculus entirely.

The rivalry dynamic is shaped by the fact that Cassava Sciences, Inc. (SAVA) is targeting a niche, rare disease market, but one that still features established players. Direct competition is certainly present, particularly from approved treatments that modulate the same underlying pathway, such as mTOR inhibitors like Everolimus, which is marketed by major pharmaceutical companies like Novartis. Novartis, for instance, reported total net sales of \$13.9 billion in Q3 2025, and their established distribution and physician relationships represent a significant barrier to entry for a smaller firm like Cassava Sciences, Inc. (SAVA) in any CNS indication where their products overlap. Still, Cassava Sciences, Inc. (SAVA)'s lead candidate, simufilam, offers a unique differentiation point by targeting filamin A modulation, which is a novel mechanism compared to the established mTOR inhibitors.

The market Cassava Sciences, Inc. (SAVA) is entering is small but expanding, which can temper rivalry by offering room for multiple successful therapies. The Tuberous Sclerosis drug market was valued at \$831.20 million in 2023 and is projected to reach \$1,560.56 million by 2032, growing at a compound annual growth rate (CAGR) of 7.25% during that forecast period. More immediately, the market size was \$0.79 billion in 2024 and is expected to grow to \$0.85 billion in 2025 at a CAGR of 7.7%. This growth trajectory suggests increasing investment and attention, which naturally heightens rivalry, but the focus on a specific indication like TSC-related epilepsy-where 84% of the estimated 50,000 individuals in the U.S. experience epilepsy-creates a more defined battleground.

Here's a quick look at the competitive context and Cassava Sciences, Inc. (SAVA)'s current standing:

• The Alzheimer's program, which saw R&D expenses drop 78% to \$4.0 million in Q3 2025, is officially phased out as of Q2 2025.
• Simufilam's proof-of-concept study for TSC-related epilepsy is slated to start in H1 2026.
• Preclinical data for simufilam showed a 60% reduction in seizure frequency in a mouse model.
• Cassava Sciences, Inc. (SAVA) ended Q3 2025 with \$106.1 million in cash and estimates year-end 2025 cash between \$92 to \$96 million.
• Key competitors in the broader TSC space include Novartis AG, GW Pharmaceuticals, and Takeda Pharmaceuticals.

The established players have significant financial muscle, which you see reflected in their quarterly results. For example, Novartis reported Q3 2025 net sales of \$13.9 billion and a free cash flow of \$6.2 billion for that quarter alone. This financial disparity means that Cassava Sciences, Inc. (SAVA) must rely heavily on the novelty and efficacy of simufilam's mechanism to compete effectively against incumbents who can sustain long development cycles or aggressive pricing strategies.

To map the competitive forces related to the TSC niche, consider this comparison of market dynamics:

Ultimately, Cassava Sciences, Inc. (SAVA)'s rivalry hinges on execution. They need to successfully navigate the path to the H1 2026 clinical study, and the preclinical data showing a 60% seizure reduction is the only real leverage point against entrenched competitors who already have products on the market. Finance: draft 13-week cash view by Friday.

Cassava Sciences, Inc. (SAVA) - Porter's Five Forces: Threat of substitutes

The threat of substitutes for Cassava Sciences, Inc. (SAVA) in the Tuberous Sclerosis Complex (TSC)-related epilepsy space is substantial, given the existing, approved, and widely used treatment pathways. You are looking at a landscape where patients already have established options, which means any new entrant, like Cassava Sciences, Inc.'s investigational simufilam, must demonstrate a significant, quantifiable advantage over these incumbents to gain traction.

As of late 2025, Cassava Sciences, Inc. is still in the preclinical/early development phase for this indication, with a clinical study expected to begin in H1 2026. The Company reported $106.1 million in cash and cash equivalents as of September 30, 2025, with an estimated year-end 2025 cash range between $92 to $96 million.

The established alternatives present a clear hurdle. Here is a snapshot of the competitive landscape based on available data for the broader epilepsy and TSC treatment areas:

Traditional Anti-Seizure Medications (ASMs) are a major factor, primarily because many are generic, meaning their cost basis is extremely low, making them the default first-line therapy. While specific 2025 pricing for generic ASMs is not provided here, their generic status inherently implies a low marginal cost to the payer or patient compared to a novel biologic or device.

Cannabidiol (CBD), approved as an adjunctive therapy for TSC-associated seizures, shows meaningful efficacy in real-world settings. In one analysis of patients with TSC in an Expanded Access Program, the median reduction in total seizures was between 44% and 87% over a 144-week period. This sustained efficacy from an approved adjunctive therapy directly competes with any potential new drug from Cassava Sciences, Inc.

Non-pharmacological options are critical for the refractory patient population, which is where Cassava Sciences, Inc. is aiming its simufilam. These devices represent established, durable alternatives for patients who have failed multiple medications. You see this reflected in the device market size:

• Global market for epilepsy treatment devices expected to reach $11.5 billion by 2033.
• Vagus Nerve Stimulators (VNS) market estimated at USD 667.4 Mn in 2025.
• Epilepsy application holds the highest share of the VNS market, projected at 38.3% in 2025.
• Refractory cases affect approximately 30% of the estimated 6 million individuals with epilepsy in Europe.

The existence of these established, approved, and quantified alternatives means that Cassava Sciences, Inc. must clear a high bar for clinical differentiation. If your drug only achieves a 25% seizure reduction, it falls short of the median response seen with Everolimus in the HE arm (39.6% reduction) and the lower end of the range seen with CBD (44% total seizure reduction in the TSC group).

Cassava Sciences, Inc. (SAVA) - Porter's Five Forces: Threat of new entrants

You're looking at the barriers Cassava Sciences, Inc. (SAVA) faces from potential new competitors trying to enter the rare neurological disorder space. Honestly, the threat level here lands in the low-to-moderate zone. This isn't about a simple product launch; it's about navigating massive regulatory hurdles and deep financial commitments that scare off most smaller biotechs.

The financial cushion Cassava Sciences, Inc. (SAVA) currently holds is a necessary, but not sufficient, barrier. As of September 30, 2025, Cassava Sciences, Inc. (SAVA) reported cash and cash equivalents of $106.1 million, with zero debt. Management guided this position would support operations into 2027. That runway buys time, but a new entrant with comparable funding could still try to play the long game, especially if they target a different rare indication.

The costs associated with Central Nervous System (CNS) drug development are a huge deterrent. New players must be ready to absorb significant, often sunk, costs before seeing any potential return. Here's a quick look at the expense landscape for CNS trials:

• Phase III trial average cost (2024): $36.58 million.
• Phase I CNS trial cost: Approached $8,943 per patient per month (based on older data, but CNS remains the costliest area).
• Protocol amendments alone can cost several hundred thousand dollars each.

Securing regulatory advantages acts as a strong moat. If Cassava Sciences, Inc. (SAVA) secures and maintains Orphan Drug Designation (ODD) for its lead candidate in Tuberous Sclerosis Complex (TSC)-related epilepsy-a condition affecting an estimated 50,000 individuals in the U.S.-it gains significant protection.

The exclusivity granted by ODD is a powerful barrier against direct competition for that specific indication. A competitor would have to wait out the exclusivity period or prove clinical superiority, which is a high bar.

Furthermore, developing treatments for rare neurological disorders requires specialized, hard-to-acquire expertise. Cassava Sciences, Inc. (SAVA) has been fortifying this by licensing intellectual property (IP) from Yale University, including an issued US method of treatment patent (US 12,186,307) for simufilam in seizures related to rare neurodevelopmental disorders, like TSC. New entrants would need to replicate this specialized scientific foundation or acquire similar exclusive rights, which is a defintely high hurdle.

The need to overcome the high cost of CNS clinical trials is compounded by the complexity of rare disease recruitment. Even with a clear clinical path, like Cassava Sciences, Inc. (SAVA)'s planned proof-of-concept study for TSC-related epilepsy in the first half of 2026, a new entrant faces the same patient scarcity and protocol rigor. You can't just throw money at patient recruitment when the population is small.