Athira Pharma Reports Financial Challenges, Workforce Reduction, and Focus on Lead Drug Candidate

Athira Pharma, Inc. reported significant financial changes in its latest 10-Q filing for the quarter ending September 30, 2024. The company recorded cash and cash equivalents of $68.9 million, a decrease from $90.6 million at the end of 2023. Total current assets also fell to $82.0 million from $154.7 million, while total assets decreased to $86.2 million from $160.2 million. Stockholders' equity dropped to $57.6 million from $130.2 million, reflecting a challenging financial environment.

For the three months ended September 30, 2024, Athira's operating expenses were $29.6 million, down from $35.0 million in the same period of 2023, marking a 15% reduction. This decline was primarily driven by a significant decrease in research and development (R&D) expenses, which fell to $17.9 million from $27.2 million, a 34% decrease. The reduction in R&D costs was largely attributed to a $10.7 million decrease in expenses related to the fosgonimeton program, which has been paused following disappointing clinical trial results. The net loss for the quarter was $28.7 million, an improvement from $33.0 million in the prior year.

For the nine months ended September 30, 2024, the net loss was $81.9 million, compared to $90.4 million for the same period in 2023. Total operating expenses for this nine-month period were $85.3 million, down from $96.5 million in 2023. The company reported a decrease in cash used in operating activities, which was $71.2 million for the nine months ended September 30, 2024, compared to $74.5 million in the previous year.

Strategically, Athira announced a significant workforce reduction on September 15, 2024, expected to eliminate approximately 70% of its workforce. This restructuring is anticipated to incur costs of about $2.8 million, primarily for severance and termination benefits, and aims to extend the company's cash runway while focusing on the development of its lead drug candidate, ATH-1105, which is currently in a Phase 1 clinical trial for ALS and Alzheimer's disease.

The company has not generated any revenue from drug sales since its inception and continues to rely on equity financing, having raised approximately $407.4 million since its founding. Athira's current cash position is projected to fund operations for at least the next 12 months, although it will require additional capital to support ongoing development and operational costs.