Athira Pharma, Inc. (ATHA) Made Misleading Statements Regarding the Research Backing its Drug Candidates
On June 17, 2021, Athira Pharma, Inc. (ATHA) issued a press release announcing that the Company’s board of directors had placed Leen Kawas, Athira’s President and Chief Executive Officer, on temporary leave pending review of actions stemming from doctoral research Kawas conducted while at Washington State University. An article published in STAT News that same day revealed that the investigation related to allegations that she altered images in four separate papers relating to her research on hepatocyte growth factor (HGF), a protein with potential to treat Alzheimer’s disease and other neurological disorders. While Athira “has since moved on to a different molecule than the one Kawas was working on, it still aims to target HGF. And so Kawas’ doctoral work laid the biological groundwork that Athira continues to use in their approach to treating Alzheimer’s.”
According to a securities analyst at Stifel, “The scientific hypothesis behind Athira came out of the work Dr. Kawas did in graduate school so there is a risk her that whatever comes out of this investigation could have clear negative implications for how we/investors view the asset, and/or management credibility.” On this news, Athira’s stock price fell $7.09 per share, or nearly 39%, to close at $11.15 per share on June 18, 2021, and has yet to recover.
Throughout the class period, defendants failed to disclose to investors that the research conducted by Kawas, which formed the foundation for Athira’s product candidates and intellectual property, was tainted by Kawas’ scientific misconduct, including the manipulation of key data, and as a result, the defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading.
If you purchased shares of Athira Pharma, Inc. (ATHA) between September 18, 2020 and June 17, 2021, you have until August 24, 2021, to ask the court to appoint you lead plaintiff for the class.
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