Bothell-based biopharmaceutical company Athira Pharma Inc. (Nasdaq: ATHA) is laying off about 50 people, or roughly 70% of its staff.
Athira announced the move Tuesday as it shifts focus from its previous lead drug, an Alzheimer's treatment called fosgonimeton, to another treatment called ATH-1105, which the company is developing to target amyotrophic lateral sclerosis (ALS) and Alzheimer's. The decision comes after disappointing trial data from fosgonimeton, which Athira had called ATH-1017.
“I want to thank our colleagues who will be departing from Athira as part of the restructuring and acknowledge their many contributions to the development of therapeutics," Athira CEO Mark Litton said in a release.
Athira said in a regulatory filing the layoffs will come with a cost of about $2.8 million, mainly from severance and termination benefits, and the company will incur these costs in the third quarter. The cuts should finish by the end of the year and will result in savings of about $13.4 million per year.
The company said it expects now to have cash runway into the first quarter of 2026. According to a news release, Athira will explore partnerships and financing to extend its runway.
Among the layoffs are Andrew Gengos, chief business and financial officer, and Rachel Lenington, chief operating and development officer, effective Oct. 1. Robert Renninger, Athira's vice president of finance, will take the role of principal financial and accounting officer.
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Athira, founded in 2011 as M3 Biotechnology, is focused on neurological diseases. The company released phase 2 results for ATH-1017 on Alzheimer's patients in 2022. The results appeared disappointing at first, but the trials found that a subset of patients, namely those not on other forms of Alzheimer’s treatment, did see “a potentially beneficial change” to working memory processing speed and cognition compared with the placebo.
In its clinical trial results released earlier this month, however, Athira said the drug didn't show statistically significant improvement for cognition or function compared with a placebo after 26 weeks. The company said, however, the drug did help cognition and function in groups with more rapid disease progression.
“These are not the results we hoped for, as the lack of clinical decline in the placebo group, combined with the short duration of the study, may have impacted the trial’s ability to translate the effect of fosgonimeton treatment into meaningful clinical benefit,” Athira Chief Medical Officer Javier San Martin said in a release.
Athira hasn't yet said whether it is completely dropping ATH-1017 or simply focusing more heavily on ATH-1105. The company plans to finish a phase 1 study of ATH-1105 by the end of the year and to start dosing ALS patients next year.
Athira went public in 2020. The company had cash and cash equivalents of $73.8 million as of the end of June, down from $90.6 million at the end of last year.
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