Nearly $400 million for a ‘Dark-Horse’ Situation Lands CEO in Trouble

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Athira Pharm, a Washington biotech company founded on the breakthroughs of its’ founder and CEO Dr. Leen Kawas in Alzheimer’s research is facing some trouble today. Dr. Kawas has been placed on leave today as an independent investigation into allegations of scientific misconduct proceeds. Athira, based upon Dr. Kawas’ research generated almost $400 million dollars in investments for their ‘Dark-Horse’ methodology and approach to discovering a treatment for the degenerative neurological disease.

According to Endpoints News,

“The announcement came, as STAT first reported, in the days after Kawas’ work appeared on PubPeer, an anonymous forum often used to identify or discuss errors and scientific misconduct in major papers. Although all the papers discussed are between 6 and 10 years old, they carved out the foundational biology for Athira’s outside-the-box strategy for treating Alzheimer’s, raising questions about the company overall.”

Trouble Looms for the BioTech Firm

After the story broke on STAT, and Athira’s acting CEO Mark Litton made the announcement of Kawas’ leave the stock market pretty immediately responded with a deep plunge in the value of the company as investors fled in droves, dropping Athira’s stock $ATHA 40% from $18.24 to $10.87.

Kawas’ work centered around hepatocyte growth factor, or HGF, in the brain “helping regenerate neurons and strengthen the connections between them” as opposed to the more conventionally accepted amyloid hypothesis but gradually gained investor acceptance. Given that Kawas’ work was so foundational, in spite of numerous studies that followed seeming to advance her hypothesis, investors are questioning their faith.

The company has since formed a special committee to look into the matter and through Chairman of the Board Tachi Yamada made a statement,

“Athira is committed to the integrity of scientific research in its mission to restore neuronal health for those suffering from neurological diseases, so that patients can regain their memories, lives, and family relationships. ATH-1017 was discovered, developed, and patented by Athira on the basis of novel data generated within the company. The company is confident in the therapeutic potential of ATH-1017 for treating dementia.”

The veneer seems to be falling away from a company that garnered a lot of attention back in 2020 raising $204 million and Dr. Kawas was highly lauded as “the first woman to guide a company public in Washington state in more than two decades.” according to GeekWire.

They added, “I’ve been mistaken for the coat check girl more times than I can count, ” Kawas told Forbes in a 2016 profile. “But people who thought I was the coat girl at the beginning of the meeting were willing to invest a lot of money in my company by the end of it.”

It’s impossible to say at this point if Dr. Kawas’ or Athira’s reputations will survive the trouble ahead.

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