Here's Why Cassava Sciences Stock Could Make a Comeback

Betting on turnarounds in companies that others are too scared to touch can be a successful strategy for some investors. That's because the market often overreacts to bad news. Farsighted investors who recognize the enduring potential of a business -- even during its most vulnerable hours -- can sometimes (but of course, not always) get outsize returns if they're right.

One biotech stock that could be ripe for exactly that kind of play is Cassava Sciences (NASDAQ: SAVA), which is down over 70% from its high in July of last year as a result of a parade of misfortunes. Its flagship candidate is a drug for Alzheimer's disease called simufilam, and it's currently enrolling patients in phase 3 clinical trials.

But given the company's recent past, it's remarkable that the trial is proceeding at all. Let's explore why.

Source Fool.com