Athira Pharma is executing a dramatic strategic shift, pivoting its primary focus from Alzheimer’s disease to oncology following years marked by clinical failures and executive upheaval.
The Bothell, Washington-based biotechnology company announced today it has licensed a Phase 3 breast cancer drug from Sermonix Pharmaceuticals, backed by $90 million in funding from a consortium of healthcare investment firms. The company could receive an additional $146 million if the research produces promising results.
Athira will simultaneously continue developing ATH-1105, its own drug candidate for treating ALS (amyotrophic lateral sclerosis).
Athira President and CEO Mark Litton described the development as “exciting and transformative news” for the company.
“By securing rights to this late-stage program while also advancing ATH-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 surged 70 percent to $7 per share, signaling investor enthusiasm for the strategic redirection.
Athira has endured a turbulent period over the past few years that necessitated this pivot.
The company’s Alzheimer’s disease drug candidate, called fosgonimeton, stumbled in trials and then failed a Phase 2/3 trial last year, dealing a severe blow to the company’s core strategy.
That failure sank Athira’s stock price and triggered a layoff of 49 employees, representing approximately 70 percent 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 scientific foundation, creating a leadership crisis and credibility questions.
Under today’s deal, Athira secures an exclusive license to develop and commercialize the breast cancer therapeutic for nations outside of Asia and select Middle Eastern countries. The drug, called lasofoxifene, is currently enrolled in a clinical trial that has recruited more than 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 as compensation for the license. Athira has also committed to paying Sermonix up to $100 million plus limited royalties if certain commercial targets are achieved.
Three lead investors are backing the research: New York’s Commodore Capital, biotech hedge fund Perceptive Advisors, and California-based TCGX. Additional participants include ADAR1, Blackstone Multi-Asset Investing, Kalehua Capital, Ligand Pharmaceuticals, New Enterprise Associates, 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, keeping that program advancing while the breast cancer initiative ramps up.
The breast cancer pivot represents a pragmatic response to the Alzheimer’s setbacks. Alzheimer’s drug development has proven extraordinarily difficult, with numerous high-profile failures across the pharmaceutical industry. The disease’s complex biology and the lack of clear biomarkers make clinical trials challenging and expensive.
Breast cancer, while still a difficult therapeutic area, offers more established clinical trial pathways and clearer endpoints for measuring success. The fact that lasofoxifene is already in Phase 3 trials with over half enrollment complete means Athira is acquiring a program with substantial de-risking already accomplished.
The mid-2027 expected results timeline gives Athira a relatively near-term catalyst that could validate the strategic shift. Success could position the company as a credible oncology player rather than another failed Alzheimer’s biotech.
The 70 percent stock price surge reflects investor relief that Athira has found a viable path forward after the devastating Alzheimer’s failure. The $7 per share price, while representing strong single-day gains, likely remains well below the company’s previous highs when Alzheimer’s prospects seemed brighter.
The $90 million raised extends Athira’s cash runway to 2028, buying time for both the breast cancer and ALS programs to generate data. Biotech companies constantly manage cash runway, and having three years of funding provides breathing room.
The potential additional $146 million from warrant exercises could come if the stock price rises significantly, which would happen if clinical programs show promise. This structure aligns investor returns with clinical success.
