05:42 AM EDT, 09/27/2024 (MT Newswires) -- (Updates with the stock move in the headline and the second paragraph.)

Cassava Sciences ( SAVA ) said late Thursday it has agreed to pay a $40 million penalty to settle a US Securities and Exchange Commission case against it over allegedly misleading statements made in relation to the results of a phase 2 trial for its Alzheimer's disease drug candidate.

Shares of the company dropped more than 11% in premarket activity Friday.

The SEC alleged that Cassava misled investors by manipulating trial data to falsely show significant improvement in the trial's results. It also alleged that the company and certain of its executives violated reporting provisions of the federal securities laws.

Cassava, without admitting or denying the allegations, said it has cooperated with the SEC's investigation and has implemented remedial measures.

"In connection with the previously-disclosed investigation by the Department of Justice, the company does not currently anticipate that DOJ's Criminal Division will bring charges against or seek a resolution with the company," Cassava said.

Price: 28.25, Change: -3.62, Percent Change: -11.37