NEW YORK, Aug 5 (Reuters) - Cassava Sciences ( SAVA )

ended its defamation lawsuit against four short sellers who

expressed doubts about its experimental Alzheimer's drug after a

medical professor whose research underpinned the treatment was

charged with fraud.

The biotechnology company sued in 2022 after the short

sellers, who were also scientists who investigated Cassava's

statements about its simufilam drug, claimed on social media and

the website "cassavafraud.com" that Hoau-Yan Wang's research for

simufilam was fabricated.

Cassava dropped the lawsuit in a Friday evening filing in

federal court in Manhattan.

U.S. District Judge Gregory Woods had dismissed much of the

case against Adrian Heilbut, Jesse Brodkin, Enea Milioris and

Patrick Markey in March, but Cassava sued them again in April.

Short sellers borrow stock and sell it, hoping the price

will fall so they can buy it back and replenish their lenders.

Wang, a professor at the City University of New York's

School of Medicine, was charged with fraud on June 28 for

submitting false data to the National Institutes of Health to

earn millions of dollars in grants. He has pleaded not guilty.

Cassava announced on July 17 that Chief Executive Remi

Barbier and neuroscience chief Lindsay Burns would resign.

In a statement on Sunday, a Cassava spokesperson said: "New

management determined that pursuing this defamation lawsuit is

an unnecessary distraction from our mission of developing a

treatment for Alzheimer's disease."

Cassava shares rose more than 20-fold between January 2021

and July 2021 on investor hopes of a breakthrough in treating

Alzheimer's.

The stock gave up many gains after physicians David Bredt

and Geoffrey Pitt urged the U.S. Food and Drug Administration to

halt clinical trials of simufilam, citing alleged data

misrepresentation and manipulated images of experiments.

Bredt and Pitt later disclosed they had also shorted

Cassava's stock. The Austin, Texas-baesd company also sued them

for defamation, but Woods dismissed those claims in March.