Cassava Sciences, Inc. ( SAVA ) shares are trading significantly lower on Friday following the indictment of Hoau-Yan Wang, a tenured medical professor and advisor to the company, by a federal grand jury.

What’s Going On: Wang has been accused of fabricating scientific data in grant applications to the U.S. National Institutes of Health (NIH), resulting in the misappropriation of approximately $16 million in federal funds intended for Alzheimer’s research.

According to court documents, Wang’s alleged fraudulent activities occurred between May 2015 and April 2023. The falsified data was part of grant applications related to early-stage research on a potential Alzheimer’s treatment and diagnostic test.

What Else: These applications, which secured millions in NIH funding, involved the improvement of Alzheimer’s indicators after treatment with the proposed drug. Wang faces charges including one count of major fraud against the United States, two counts of wire fraud and one count of making false statements. If convicted, he could face up to 55 years in prison.

SAVA Price Action: Cassava shares were down 32.5% at $12.81 at the time of writing, according to Benzinga Pro.

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