A securities class action has been filed against Athira Pharma, Inc. (ATHA) on behalf of all investors who purchased or otherwise acquired Athira Pharma securities between September 18, 2020 through June 17, 2021. This case has been filed in the USDC – W.D.WA.
Athira is a late-stage clinical biopharmaceutical company that is focused on developing small molecules to restore neuronal health and stop neurodegeneration.
On June 17, 2021, after the market closed, Athira announced that it had placed its president and Chief Executive Officer, Dr. Leen Kawas (“Kawas”), on leave pending a review of actions stemming from doctoral research she conducted while at Washington State University (“WSU”).
The same day, STAT published an article stating that WSU was investigating claims that Dr. Kawas “published several papers containing altered images while she was a graduate student.” These papers “are foundational to Athira’s efforts to treat Alzheimer’s” because they “established that a particular molecule affects the activity of HGF.” Though Athira is developing a different molecule than the one Kawas examined in the papers at issue, her “doctoral work laid the biological groundwork that Athira continues to use in their approach to treating Alzheimer’s.”
On this news, the Company’s share price fell $7.09, or approximately 39%, to close at $11.15 per share on June 18, 2021, on unusually heavy trading volume.
By the commencement of this action, the Company’s stock was trading as low as $10.34 per share, a nearly 40% decline from the $17 per share IPO price.
The Registration Statement was materially false and misleading and omitted to state: (1) that Kawas had published research papers containing improperly altered images while she was a graduate student; (2) that this purported research was foundational to Athira’s efforts to develop treatments for Alzheimer’s because it laid the biological groundwork that Athira was using in its approach to treating Alzheimer’s; (3) that, as a result, Athira’s intellectual property and product development for the treatment of Alzheimer’s were based on invalid research; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.