Stock of Bothell-based biotech Athira Pharma Inc. (Nasdaq: ATHA) tumbled more than 66% Wednesday after the company released disappointing clinical results for its drug aimed at treating Alzheimer's and Parkinson's dementia.
The results indicated Athira's lead drug, ATH-1017, also called fosgonimeton, didn't have a statistically significant impact on working memory processing speed or cognition when compared with a placebo after 26 weeks.
Athira CEO Mark Litton said in a news release that the company is in a "fortuitous situation" because it has "a much larger trial ongoing with more than 200 patients completing at least 20 weeks of treatment providing us with an opportunity to obtain more insights in an expedited manner. Our strong cash position allows us to continue to progress fosgonimeton development."
The Phase 2 study enrolled 77 patients from the U.S. and Australia with mild to moderate Alzheimer's. Patients could continue standard-of-care therapy, and 60% remained on those therapies during the study. Patients received either a placebo, 40 milligrams per day of fosgonimeton or 70 milligrams per day of fosgonimeton. Athira said an analysis of the patients who didn't continue standard-of-care therapy during the study "showed a potentially beneficial change" to working memory processing speed and cognition compared with the placebo.
Enrollment is ongoing for Athira's Phase 3 trials, which will include about 420 U.S. patients. According to a filing with the Securities and Exchange Commission, the company expects to have its Phase 3 results in the first half of 2023.
Athira has faced a difficult year, starting in June of last year when former CEO Leen Kawas was placed on temporary leave following scrutiny of her doctoral work at Washington State University, where she received a doctorate in molecular pharmacology in 2011. Kawas resigned in October after an independent review found she altered images in her doctoral dissertation and at least four papers she co-authored while at WSU that were published between 2011 and 2014. Kawas has since launched a biotech investment firm called Propel Bio Partners with Athira investor Richard Kayne.
Kayne also spent more than a month slamming Athira's leadership, including Litton, in open letters to Athira shareholders. Kayne was pushing for himself and former Novartis Chief Financial Officer George Bickerstaff to take two board seats at the company before suspending his campaign in May. The company's stock is down more than 83% since Kawas was first placed on leave. It closed Wednesday at $2.85 per share.
Athira was founded in 2011 as M3 Biotechnology. The company went public in 2020 through a $204 million initial public offering.
In an opinion piece published Wednesday in the journal Science, Derek Lowe, a director at the Novartis Institutes for BioMedical Research, wrote that Athira "is of course talking about subgroup analysis and re-examining the data, but I honestly don't see much hope for that. Objectively, fosgonimeton would appear to be done. The company has already been enrolling Phase 3 patients, though, so it'll get another shot, but I would be very, very surprised to see positive results."
