In a remarkable pivot, Athira Pharma is shifting its primary focus from Alzheimer’s to oncology following a multi-year period marked by clinical failures and leadership turnover.
The Bothell, Wash.-based company announced today that it has licensed a Phase 3 breast cancer drug from Sermonix Pharmaceuticals, supported by $90 million in funding from a group of healthcare investment firms. It could land an additional $146 million if the research yields promising results.
Athira will simultaneously continue researching ATH-1105, its own drug candidate for treating ALS.
Athira President and CEO Mark Litton called the development “exciting and transformative news.”
“By securing rights to this late-stage program — while also advancing pATH-1105 for ALS — we are building a pipeline that we believe has the potential to change lives and create enduring value,” Litton said on LinkedIn. “We are honored to have the backing of some of the most respected biotechnology funds in the industry.”
Following the deal announcement, the company’s stock rose 70% to $7 per share.
Athira has been through a tumultuous few years:
- Its Alzheimer’s disease drug candidate, called fosgonimeton, stumbled and then failed a Phase 2/3 trial last year.
- That sank Athira’s stock price and triggered a layoff of 49 employees, or about 70% of its workforce in September 2024.
- In 2021, Athira CEO and President Leen Kawas resigned after it was confirmed she had altered images in scientific papers from her graduate studies that helped form the company’s foundation.
Details on the deal
Under today’s deal, Athira secures an exclusive license to develop and commercialize the breast cancer therapy for nations outside of Asia and select Middle Eastern countries. The drug, called lasofoxifene, is currently in a clinical trial that has enrolled over half of its target patient population, with initial results expected in mid-2027.
The agreement provides Sermonix with 5.5 million shares of Athira’s stock. The Seattle company has also committed to paying Sermonix up to $100 million plus limited royalties if certain commercial targets are reached.
Three lead investors are backing the research: New York’s Commodore Capital, biotech hedge fund Perceptive Advisors, and California-based TCGX. Additional participants are ADAR1, Blackstone Multi-Asset Investing, Kalehua Capital, Ligand Pharmaceuticals, New Enterprise Associates (NEA), Spruce Street Capital and 9vc.
Athira raised $90 million by selling stock and warrants to investors, extending its cash runway into 2028. If investors choose to exercise those warrants in the future, the company could receive up to an additional $146 million to fund its clinical programs.
“We’re proud to support this evolution and excited by the opportunity to deliver meaningful impact for patients and shareholders alike,” said Joseph Edelman, founder and CEO of Perceptive Advisors, in a statement.
Regarding its own ALS drug candidate, Athira this year successfully completed Phase 1 safety trials, and plans to start Phase 2 trials early next year.
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