Athira Investor Calls For Former GSK Exec to Take Reigns
Athira CEO Mark Litton, Courtesy of Athira Pharma
There’s no shortage of news when it comes to Athira Pharma.
Back in October 2021, Athira’s CEO, Leen Kawas, left the company after it was discovered that papers she published as a graduate student contained altered research. Since then, Mark Litton has acted as president and CEO. But one of the company’s major investors, billionaire Richard 'Ric' Kayne, is calling for the board to oust Litton and replace him with someone else.
In early April, Athira was pushing back on Kayne’s demands. Kayne owns 4.8% of Athira. The week before that, Kayne had called for a leadership change, requesting shareholders support his bid for a seat on the company board of directors, along with George W. Bickerstaff, III, the former chief financial officer of Novartis Pharma AG, who also supports a leadership change.
Kayne has now proposed that the company board and shareholders remove Litton and place Krall in charge of the company. He stated, “When I began my campaign for change at Athira, I made clear my belief that the board’s top priority should be to replace Dr. Mark Litton with a world-class CEO who could actively oversee the company’s ongoing clinical trials and give ATH-1017 its best chance to succeed. Given the board’s refusal to engage with me on this topic, I previously disclosed my intention to seek to identify and present qualified candidates to the board for its consideration. I am extremely pleased to announce that, as part of my search process, I have identified a candidate that warrants the board’s immediate consideration”
Krall is a board-certified neurologist and clinical pharmacologist. He is currently a director at the Foundation for the National Institutes of Health and an adjunct professor of Neurology at the University of Rochester.
But is he interested?
Potentially. According to Kayne, Krall has said he could add value to the company as it progresses its lead compound, ATH-1017, to treat Alzheimer’s disease. He also indicated he was willing to be interviewed by Athira’s board of directors.
Kayne’s arguments against Litton are that Litton’s career has been focused on business development with little clinical or scientific experience. He also argued that some members of the company’s management team have left due to the “hasty appointment” of Litton as CEO.
Athira, for its part, said in early April that Kayne’s platform is “misguided and unnecessarily disruptive.” They also argue that appointing Kayne and Bickerstaff would not add skills or expertise that aren’t already well-represented by the current board. They also charged Kayne with being “stuck in the past.”
“Instead of looking forward, Mr. Kayne has pushed Athira to resume a formal relationship with his current business partner and the company’s former CEO, Leen Kawas. The board believes that ending Dr. Kawas’s relationship with Athira was and remains in the best interests of Athira and our shareholders,” the board stated in its letter. “The board of directors is confident that Athira has the right strategy and the right leadership team to continue positioning the company for success.”
On April 20, Athira issued an announcement introducing the directors of its board, who will be up for election at this year’s annual meeting, including Joseph Edelman, John M. Fluke, Jr. and Grant Pickering. They also added, “Supporting Richard A. Kayne in his proxy contest risks substantial disruption to Athira at a critical time for the company.”
And on April 26, the company, in its continuing campaign for the three board nominees, filed a new investor presentation with the Securities and Exchange Commission, announcing it expected topline results from the Phase II ACT-AD study by the end of the second quarter and is targeting full enrollment of the LIFT-AD Phase III trial for the third quarter with topline data in the first half of 2023. It also dosed the first patient in the Shape Phase II trial of fosgonimeton in Parkinson’s disease Dementia with Lewy bodies in January.
ATH-1020 is a novel, orally available, brain-penetrant small molecule that has shown neuroprotective effects in preclinical studies. It also mitigated depression-like behaviors and rescued mismatch negativity response in both rodent models and in schizophrenia patients. Athira recently initiated a Phase I trial of the drug.