Athira Pharma Shifts Focus to Oncology with Promising Breast Cancer Drug and Major Financing Boost
Bothell, Washington-based Athira Pharma is making a dramatic strategic shift from Alzheimer’s research to oncology after experiencing years of clinical setbacks and executive changes. The biotechnology company revealed Wednesday it has obtained licensing rights to a promising breast cancer treatment from Sermonix Pharmaceuticals, accompanied by $90 million in financing from healthcare investment firms. An additional $146 million in potential funding could be unlocked if research outcomes prove favorable.
While pursuing this new direction, Athira will maintain its research efforts on ATH-1105, a candidate drug designed to treat ALS patients.
Company President and CEO Mark Litton characterized the announcement as “exciting and transformative news.” In a LinkedIn statement, he expressed enthusiasm about obtaining rights to this advanced-stage program while simultaneously progressing ATH-1105 for ALS treatment. Litton emphasized that the company is constructing a pipeline with potential to make meaningful differences in patients’ lives and generate lasting value. He noted the honor of receiving support from highly respected biotechnology investment funds.
The announcement triggered a significant market response, with Athira’s stock surging 70 percent to reach $7 per share.
The company has navigated considerable turbulence in recent years. Its Alzheimer’s disease drug candidate, fosgonimeton, encountered difficulties before ultimately failing a Phase 2/3 trial in 2024. This failure caused Athira’s stock to plummet and resulted in September 2024 layoffs affecting 49 workers, representing approximately 70 percent of the company’s workforce. Additional controversy emerged in 2021 when CEO and President Leen Kawas stepped down following confirmation that she had manipulated images in scientific papers from her graduate work, which had contributed to the company’s scientific foundation.
The newly announced licensing arrangement grants Athira exclusive development and commercialization rights for the breast cancer therapy in markets outside Asia and certain Middle Eastern territories. The drug, lasofoxifene, is currently undergoing clinical trials with more than half of the target patient enrollment completed. Initial trial results are anticipated by mid-2027.
Financial terms include providing Sermonix with 5.5 million Athira shares. Athira has additionally committed to potential payments reaching $100 million, plus limited royalty arrangements, contingent upon achieving specific commercial milestones.
The research initiative has backing from three principal investors: Commodore Capital based in New York, biotech-focused hedge fund Perceptive Advisors, and California’s TCGX. Other participating investors include ADAR1, Blackstone Multi-Asset Investing, Kalehua Capital, Ligand Pharmaceuticals, New Enterprise Associates (NEA), Spruce Street Capital, and 9vc.
Through stock and warrant sales to investors, Athira secured $90 million in funding, which extends the company’s financial runway through 2028. Should investors opt to exercise their warrants in future periods, Athira could potentially receive up to $146 million more to support its clinical development programs.
Joseph Edelman, founder and CEO of Perceptive Advisors, expressed support for the company’s transformation in a statement, noting pride in backing this evolution and excitement about opportunities to create meaningful impact for both patients and shareholders.
Concerning its ALS drug candidate, Athira successfully concluded Phase 1 safety trials earlier this year and intends to initiate Phase 2 trials in early 2026.
