On Wednesday, September 4, quotes on Athira Pharma, a small developer of therapies for neuronal health, plummeted 78% after the company reported that its Alzheimer’s treatment had not been found significantly more effective than placebo in a 26-week clinical trial. Despite this setback, Athira intends to continue working on the drug, notes Barron’s.
Details
On Wednesday, Athira Pharma stock lost 78% to $0.61 per share, its largest single-day loss over the past year. Investors traded 17.3 million Athira shares, compared with an average daily volume of 181,000 shares. Since the beginning of the year, the stock is off almost 75%.
The same day, two analysts, from BTIG and JMP Securities, downgraded Athira Pharma, according to Yahoo Finance. Neither provides a target price at the moment, even though as recently as June JMP Securities had said the stock was worth $19 per share. Overall, six analysts cover the company, with an average target price of $4 per share, indicating upside of 550%.
On Tuesday, Athira reported that its fosgonimeton therapy failed to perform significantly better than placebo in patients with Alzheimer’s disease after 26 weeks of clinical trials. According to the statement, though some patients in the fosgonimeton-treated group showed improvements, they did not reach statistical significance.
“These are not the results we hoped for…,” said Javier San Martin, chief medical officer at Athira.
About Athira Pharma
Athira is a small biopharmaceutical company with a market capitalization of $23.5 million, focusing on developing drugs to restore neuronal health and slow neurodegeneration. It has three molecules in its portfolio. One of them, the abovementioned fosgonimeton, is being studied as a potential treatment for Alzheimer’s disease (in phase II/III clinical trials) and Parkinson’s disease (phase II). The other two molecules, including one being developed to treat amyotrophic lateral sclerosis, are in phase I trials. The company does not generate revenue and had a net loss of $26.9 million in the second quarter of 2024.
Barron’s writes that the news is disappointing for Alzheimer’s patients, Athira, and the theory behind Athira’s drug, which differs from that behind a recently approved Alzheimer’s drug from Eli Lilly. Whereas the pharma giant uses monoclonal antibodies to remove amyloid plaque buildup in the brain, Athira is working on a small molecule designed to enhance the activity of hepatocyte growth factor — a protein that promotes neuron survival.
Another small company, ProMIS Neurosciences, with a market capitalization of $25 million, is also working in this direction, though its Alzheimer’s treatment is only in phase I trials.
Context
Athira is not giving up and intends to continue working on fosgonimeton, notes Barron’s. The pharmaceuticals industry is considered one of the most unpredictable. On average, developing a new drug takes 10-15 years and costs $2.6 billion, according to the Pharmaceutical Research and Manufacturers of America. Only 12% of new molecular entities that enter clinical trials eventually receive FDA approval.
For instance, Geron Corporation spent nearly a decade proving the effectiveness of its approach to treating myelodysplastic syndromes. The development of its drug was halted several times due to safety issues, and in 2016 the company lost nearly a fifth of its market value due to setbacks in clinical trials. Last year, however, the drug finally showed “promising results,” and in June 2024 it was approved by the FDA, buoying shares of other pharmaceutical companies using the same approach. MAIA Biotechnology, for example, climbed 16.27% the day after Geron secured FDA approval and gained around another 6% before a slight correction.
