Athira Pharma, a Seattle-based biotech company, has announced a significant restructuring that includes laying off 49 employees, or about 70% of its workforce, in an effort to cut costs. The company, which went public in 2020, is focused on developing drugs for Alzheimer’s disease and other neurodegenerative conditions. However, its stock recently suffered after disappointing results from a phase 2/3 study. Athira is now shifting its focus to advancing ATH-1105, a potential treatment for ALS currently in Phase 1 trials.
As part of the restructuring, Athira has terminated its chief business officer and chief financial officer, Andrew Gengos, and chief operating officer and chief development officer, Rachel Lenington, effective October 1. The company has appointed Robert Renninger, vice president of finance, as its new principal financial officer and principal accounting officer. The restructuring is expected to save Athira $13.4 million annually and is set to be completed by the end of the year, according to a regulatory filing. The company reported having cash, cash equivalents, and investments of $91.8 million as of June 30, down from $147.4 million at the end of the previous year, with a net loss of $26.9 million for the quarter ending June 30.
Mark Litton, Athira’s current CEO, took over in 2021 after former CEO Leen Kawas resigned due to an investigation into the integrity of data in papers she co-authored as a graduate student that led to the founding of the company in 2011. Athira had raised $204 million in its IPO and was valued at around $670 million when it went public four years ago. However, the company’s market capitalization has now plummeted to less than $20 million. The restructuring and cost-cutting measures are part of Athira’s efforts to navigate the challenges it faces following the recent setback in its clinical trials and the departure of its former CEO.
Despite the setbacks, Athira remains dedicated to advancing its research and development efforts, particularly in the field of neurodegenerative diseases. The company’s focus on ALS treatment with ATH-1105 indicates its commitment to finding innovative solutions for challenging conditions. With the appointment of a new financial officer and the cost-saving measures underway, Athira aims to streamline its operations and financial outlook to ensure continued progress in its drug development pipeline. The company’s current leadership under CEO Mark Litton is focused on driving Athira forward and overcoming the obstacles it faces in a highly competitive and challenging biotech industry landscape.
While the layoffs and restructuring may be a difficult decision for Athira and its employees, they are a strategic move to ensure the company’s sustainability and continued progress toward its goals. The cost-cutting measures and new leadership appointments demonstrate Athira’s proactive approach to addressing challenges and restructuring its operations for long-term success. Despite the recent setbacks, Athira’s dedication to advancing innovative treatments for neurodegenerative diseases remains strong, and the company is focused on moving forward with determination and resilience. Time will tell how Athira’s efforts will pay off in shaping the company’s future in the biotech industry.
