8-K: Athira Pharma Reports Q3 2024 Results, Advances ALS Drug Candidate

Athira Pharma announced its third quarter 2024 financial results, highlighted by the continued development of its ALS drug candidate, ATH-1105, and the exploration of strategic alternatives.

Summary

• Athira Pharma reported its financial results for the quarter ended September 30, 2024, and provided updates on its pipeline and business.
• The company is progressing its Phase 1 study of ATH-1105, a potential treatment for ALS, with completion expected by year-end 2024 and plans to begin dosing ALS patients in 2025.
• The company's cash, cash equivalents, and investments totaled $68.9 million as of September 30, 2024, a decrease from $147.4 million at the end of 2023.
• Net cash used in operations was $71.2 million for the nine months ended September 30, 2024, compared to $74.5 million for the same period in 2023.
• Research and development expenses were $17.9 million for the quarter, down from $27.2 million in the same quarter of the previous year.
• The company reported a net loss of $28.7 million, or $0.75 per share, for the quarter, compared to a net loss of $33.0 million, or $0.87 per share, for the same quarter in 2023.
• Athira has paused further development of fosgonimeton after its Phase 2/3 trial did not meet its primary or key secondary endpoints and is exploring strategic alternatives to maximize stockholder value.

Sentiment

Score: 4

Explanation: The document presents mixed results. While there is progress with ATH-1105, the failure of the fosgonimeton trial and the significant decrease in cash reserves are concerning. The exploration of strategic alternatives also introduces uncertainty.

Positives

• The company is making progress with the development of ATH-1105 for ALS, with positive preclinical data and a Phase 1 study on track for completion by the end of 2024.
• The company has reduced its research and development expenses compared to the same quarter last year.
• The net loss per share has improved from $0.87 to $0.75 year over year.

Negatives

• The company's cash position has significantly decreased from $147.4 million at the end of 2023 to $68.9 million as of September 30, 2024.
• The Phase 2/3 trial for fosgonimeton did not meet its primary or key secondary endpoints, leading to a pause in its development.
• The company has accrued a $4.1 million legal expense related to a Department of Justice investigation.

Risks

• The company's cash reserves are decreasing, which may require additional funding in the future.
• The failure of the fosgonimeton trial has led to a strategic review, which could result in significant changes to the company's direction.
• The ongoing legal investigation by the Department of Justice could have a negative impact on the company.
• There is a risk that the clinical trials for ATH-1105 may not be successful or may be delayed.

Future Outlook

Athira expects to complete the Phase 1 study of ATH-1105 by year-end 2024 and plans to begin dosing ALS patients in 2025. The company is also exploring strategic alternatives to maximize stockholder value.

Management Comments

• Mark Litton, Ph.D., President and Chief Executive Officer of Athira, stated that they are pleased to be continuing the advancement of ATH-1105 as a potential treatment for ALS.
• He also noted that preclinically ATH-1105 has shown a consistent ability in various ALS models to reduce plasma neurofilament light chain (NfL) levels and to improve motor and nerve function.

Industry Context

The focus on developing treatments for neurodegenerative diseases like ALS and Alzheimer's is a significant area of research in the biopharmaceutical industry. The failure of the fosgonimeton trial highlights the challenges in developing effective treatments for Alzheimer's, while the progress of ATH-1105 represents a potential advancement in ALS therapy.

Comparison to Industry Standards

• The decrease in R&D spending from $27.2 million to $17.9 million quarter over quarter is a significant change, and may be a result of the company pausing the development of fosgonimeton. This is a common strategy for companies that have had a clinical trial failure.
• The cash burn of $71.2 million over nine months is high for a company of this size, and the company will need to raise capital or partner to continue operations.
• The failure of the LIFT-AD trial is not uncommon in the Alzheimer's space, where many trials have failed to meet their endpoints. Companies like Biogen and Eli Lilly have also experienced setbacks in this area.
• The focus on ATH-1105 for ALS is a positive move, as there is a high unmet need for effective treatments in this area. Companies like Amylyx Pharmaceuticals have recently had success in this space with their drug Relyvrio.

Legal Proceedings

• A legal expense of $4.1 million was accrued during the quarter ended September 30, 2024, in connection with the United States Department of Justice investigative demand.

Stakeholder Impact

• Shareholders are impacted by the decrease in cash reserves and the failure of the fosgonimeton trial, which has led to a strategic review.
• Employees may be impacted by the strategic review and potential changes in the company's direction.
• Patients with ALS may benefit from the continued development of ATH-1105.

Next Steps

• Complete the Phase 1 study of ATH-1105 by year-end 2024.
• Begin dosing ALS patients with ATH-1105 in 2025.
• Explore strategic alternatives to maximize stockholder value.
• Continue development of ATH-1105.

Key Dates

Keywords

Athira Pharma, ATH-1105, ALS, Fosgonimeton, Alzheimers disease, Clinical Trial, Neurodegeneration, HGF, Strategic Alternatives, Financial Results