Leen Kawas resigned from her post as Athira Pharma‘s (ATHA) chief executive after an investigation found she manipulated data in papers used to found the company — and ATHA stock soared Friday.
An independent committee found Kawas altered images in her 2011 doctoral dissertation and in at least four research papers she co-authored from 2011-14. The data manipulation occurred while she was a graduate student at Washington State University, Athira said in a news release.
Athira tapped Mark Litton, chief operating officer, to succeed Kawas. Rachel Lenington, chief technology officer, will step into Litton’s former position.
Athira said its lead asset, an experimental Alzheimer’s drug called ATH-1017, was not the subject of Kawas’ doctoral research.
“We are confident in the therapeutic potential of ATH-1017 for treating dementia, and I am honored to receive this opportunity to lead Athira forward along with our dedicated team to help make life better for all our loved ones suffering from these debilitating diseases,” Litton said in a written statement.
In morning trading on today’s stock market, ATHA stock jumped 13% near 10.90.
ATHA Stock Jumps On CEO Exit
Athira is working on small molecules that it believes could repair unhealthy neurons in the brain.
In May, Kawas told Investor’s Business Daily that she believes treatment with ATH-1017 could lead to “brain network recovery and clinical benefits.” She believes the drug could treat the symptoms of the disease and, potentially, be disease-modifying. The Food and Drug Administration just approved the first drug to modify an underlying element of the disease: Aduhelm from Biogen (BIIB).
“We don’t fully understand the underlying pathologies that lead to degeneration, so we need approaches that are agnostic to the underlying pathology because we are tackling the outcome,” she said. “We’re focusing on recovery of synaptic ability and degeneration. We understand the outcome.”
On Friday, Athira said it finished enrolling mild-to-moderate Alzheimer’s patients in a Phase 2 study. That likely also gave ATHA stock a boost. Patients will receive daily injections of ATH-1017 or a placebo over 26 weeks. Researchers will monitor patients for improvement in cognition and functional abilities.
Athira received a patent covering ATH-1017 in June. The committee investigating Kawas’ research said neither the patent nor the underlying materials in the application cite any of the papers which include altered images. ATHA stock plummeted nearly 39% on June 18 after the company said it was putting Kawas on temporary leave. Litton took over daily operations at that point.
In Phase 1 testing, patients showed improvements in event-related potential latency, a test measuring memory processing speed. An independent organization conducted that study, Athira said.
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ATHA stock also has low ratings across the board, IBD Digital shows.
Athira isn’t the first biotech company focused on Alzheimer’s disease to face questions regarding data manipulation. Cassava Sciences (SAVA) stock has been volatile this year on claims it altered the images in tests known as Western blots.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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