Avadel Pharmaceuticals plc (NASDAQ:AVDL) recently announced positive phase III trial results for its drug FT218 to treat excessive daytime sleepiness and cataplexy in patients suffering from narcolepsy.

SanaCurrents forecast in September 2019 that Avadel’s pivotal phase III trial, called REST-ON, would succeed this spring. At the time of the report, Avadel traded at $4.34 per share. Following the release of the results, Avadel touched a high of $13.49 per share, a 3x return in seven months.

FT218, a once-nightly formulation of sodium oxybate, demonstrated meaningful improvement across three co-primary endpoints when compared to a placebo group.

Cassava Sciences, Inc. (NASDAQ:SAVA) drug PTI-125 to treat Alzheimer’s disease was not as fortunate. While Alzheimer’s has proven to be a notoriously difficult to treat, SanaCurrents expected PTI-125 to do better because the drug demonstrated significant reductions in both nitrated and phosphorylated forms of the key tau protein in a 13-patient open label trial. Each patient also exhibited responses to several, distinct biomarkers in cerebrospinal fluid (CSF). After Cassava reported the results in December 2019, the stock climbed more than 4x to nearly $10 per share.

What Cassava was attempting to do in a phase II trial was to demonstrate PTI-125 also could reduce CSF levels of tau, when treated patients were compared to a placebo group. Cassava did not have to demonstrate improvement in function by Alzheimer’s patients.

On May 15, Cassava reported the placebo-treated patients recorded changes in levels of CSF tau and p-tau ranging from -54% to +34% and -49% to +253%, respectively, from baseline to day 28. As a result of the strong placebo effect, Cassava’s phase II trial did not achieve statistical significance.

Cassava shares plunged quickly to $2.84 per share on Friday, down from $6.04 per share at the time of the March 6 SanaCurrents report. The company’s stock closed at $2.12 per share on Friday.

Cassava still expects to develop a diagnostic test based on its work in Alzheimer’s disease but even if the test is successful, it will take time for Cassava shares to recover. Any remaining capital in Cassava likely would be better distributed among remaining SanaCurrents catalysts.