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Athira Pharma, Inc. (NASDAQ:ATHA): A Promising Neurodegenerative Disease Specialist Advancing Its Pipeline
Published on September 24, 2024 | Ticker: ATHA

Athira Pharma, Inc. (NASDAQ:ATHA) is a late clinical-stage biopharmaceutical company focused on developing small molecules engineered to restore neuronal health and slow neurodegeneration. The company's lead drug candidate, fosgonimeton, is a potentially first-in-class small molecule aimed at treating central nervous system (CNS) and peripheral nervous system (PNS) disorders.

Financials

Athira Pharma has not yet generated any revenue from product sales, as the company is still in the clinical development stage of its drug candidates. For the fiscal year ended December 31, 2023, the company reported an annual net loss of $117,672,000, annual operating cash outflow of $100,753,000, and annual free cash outflow of $101,057,000. These financial results reflect Athira's ongoing investments in research and development to advance its pipeline.

In the first quarter of 2024, Athira reported a net loss of $26,337,000, with research and development expenses of $21,236,000 and general and administrative expenses of $6,451,000. The company's cash, cash equivalents, and investments totaled $122,100,000 as of March 31, 2024, providing a strong financial foundation to support its clinical development efforts.

Fosgonimeton: Athira's Lead Drug Candidate for Neurodegenerative Disorders

Fosgonimeton is Athira's lead drug candidate, designed to positively modulate the neurotrophic hepatocyte growth factor (HGF) system. The company is evaluating fosgonimeton for the treatment of Alzheimer's disease (AD), Parkinson's Disease Dementia (PDD), and Dementia with Lewy Bodies (DLB).

In the company's Phase 2 ACT-AD clinical trial in mild-to-moderate AD, the primary and secondary endpoints were not met by the protocoled analysis. However, a post hoc analysis of the data suggested positive effects on measures of cognition, function, and neurodegeneration in a pre-specified subgroup of patients taking fosgonimeton without background acetylcholinesterase inhibitors (AChEIs). These findings have informed the design of Athira's ongoing Phase 2/3 LIFT-AD trial, which is now focused on the 40 mg dose of fosgonimeton and patients not on background AChEIs.

The LIFT-AD trial is a 26-week study evaluating fosgonimeton versus placebo in mild-to-moderate AD patients. The primary endpoint is the Global Statistical Test, which combines scores from the co-key secondary endpoints of cognition (Alzheimer's Disease Assessment Scale-Cognitive Subscale) and function (Alzheimer's Disease Cooperative Study-Activities of Daily Living). Athira recently announced the completion of patient enrollment in LIFT-AD, with topline results expected in the second half of 2024.

In addition to the LIFT-AD trial, Athira is also evaluating fosgonimeton in the Phase 2 SHAPE trial for the potential treatment of PDD and DLB. While the primary endpoint of the SHAPE trial was not met by the protocoled analysis, the 40 mg dose group showed directionally positive results, with improvements observed in cognitive, functional, and biomarker measurements.

Athira's Pipeline Beyond Fosgonimeton

In addition to fosgonimeton, Athira's pipeline includes other small molecule drug candidates targeting the neurotrophic HGF system for the treatment of CNS and PNS disorders. The company's pipeline includes ATH-1020 for amyotrophic lateral sclerosis (ALS) and other early-stage programs.

Athira's Intellectual Property and Licensing Agreements

Athira's intellectual property portfolio includes patents and patent applications covering fosgonimeton and other drug candidates. The company has an exclusive license agreement with Washington State University for certain patents, including the dihexa compound, which is the chemical compound into which fosgonimeton metabolizes following administration.

Risks and Challenges

Athira faces several risks and challenges common to clinical-stage biopharmaceutical companies, including the inherent uncertainty of drug development, the potential for delays or failures in clinical trials, regulatory approval hurdles, and the need for substantial additional funding to complete the development and commercialization of its drug candidates.

The company has also faced challenges related to allegations of scientific misconduct by its former chief executive officer during her doctoral research. While these allegations are not directly related to Athira's current drug candidates or clinical research, they have resulted in ongoing legal proceedings and investigations that could have a material adverse impact on the company's reputation, intellectual property, and business operations.

Competitive Landscape and Market Opportunity

Athira operates in a highly competitive field, with several other companies developing therapies for neurodegenerative diseases. The company's success will depend on its ability to differentiate fosgonimeton and its other drug candidates, demonstrate their safety and efficacy, and navigate the complex regulatory landscape.

The potential market opportunity for Athira's drug candidates is significant, as neurodegenerative disorders such as Alzheimer's disease, Parkinson's disease, and amyotrophic lateral sclerosis represent areas of high unmet medical need with limited treatment options. However, the company will need to overcome the historical challenges in this field and effectively compete with both established and emerging therapies.

Outlook

Athira Pharma is a promising late clinical-stage biopharmaceutical company focused on developing innovative small molecule therapies for neurodegenerative disorders. The company's lead drug candidate, fosgonimeton, has shown encouraging results in early-stage trials and is now being evaluated in the pivotal Phase 2/3 LIFT-AD study for the treatment of Alzheimer's disease.

While Athira faces the typical risks and challenges associated with drug development, the company's strong financial position, with $122.1 million in cash, cash equivalents, and investments as of March 31, 2024, provides a solid foundation to advance its pipeline. The successful development and potential commercialization of fosgonimeton and Athira's other drug candidates could unlock significant value for the company and its shareholders.

Investors will closely monitor the progress of Athira's clinical trials, particularly the upcoming topline results from the LIFT-AD study, as well as the company's ability to navigate the legal and regulatory challenges it has faced. With a focus on addressing critical unmet needs in neurodegenerative diseases, Athira Pharma remains a company to watch in the biopharmaceutical industry.

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