Athira Pharma Surges After Pivoting to $236M Cancer Drug Deal
Shares soar as company licenses late-stage breast cancer drug Lasofoxifene, securing major financing after its Alzheimer's candidate failed a key trial.
Athira Pharma (NASDAQ: ATHA) orchestrated a dramatic strategic pivot, announcing an exclusive licensing deal for a late-stage breast cancer drug and securing up to $236 million in financing, a move that sent its shares soaring and reset the company’s trajectory.
The deal represents a transformative lifeline for the Bothell, Washington-based biotech, which had a market capitalization of just over $15 million before the announcement. The company secured an upfront private placement of $90 million, co-led by prominent biotech investors Commodore Capital, Perceptive Advisors, and TCGX, with the potential for an additional $146 million through the exercise of warrants. This influx of capital fundamentally changes the company's financial standing and strategic options.
The announcement marks a decisive shift away from the company's previous focus on neurodegenerative diseases. This past September, Athira’s former lead candidate, fosgonimeton, failed to meet its primary endpoint in the Phase 2/3 LIFT-AD trial for mild-to-moderate Alzheimer's disease. The setback sent the company’s valuation plunging and created uncertainty about its future.
With this new agreement, Athira gains exclusive global rights (excluding Asia) to develop and commercialize lasofoxifene, a novel selective estrogen receptor modulator (SERM). The drug is being evaluated in the ongoing Phase 3 ELAINE-3 clinical trial for the treatment of estrogen receptor-positive (ER+), HER2-negative metastatic breast cancer in patients with an ESR1 gene mutation.
“Today marks a defining moment for our company,” said Mark Litton, Ph.D., President and Chief Executive Officer of Athira, in a company press release. “This agreement for the rights to the Phase 3 lasofoxifene program for metastatic breast cancer is a significant step in building a pipeline with the potential to change lives and create enduring value.”
The asset provides Athira with a clear path forward. The ELAINE-3 trial is already more than 50% enrolled, with topline data anticipated in mid-2027. The patient population with ESR1 mutations has limited treatment options after their cancer progresses on standard therapies, representing a significant unmet medical need.
The financing not only provides a massive capital infusion but also a vote of confidence from sophisticated healthcare investors. The private placement of common stock and warrants was struck at $6.35 per share and accompanying warrants, a significant premium to its recent trading price. The proceeds are expected to extend Athira's cash runway into 2028, fully funding the lasofoxifene program through key regulatory milestones, while also supporting the development of its amyotrophic lateral sclerosis (ALS) candidate, ATH-1105.
As part of the license agreement with Sermonix Pharmaceuticals, Athira will issue a pre-funded warrant for approximately 5.5 million shares and is obligated for up to $100 million in potential milestone payments plus royalties.
For investors, the deal completely reshapes Athira's narrative from a company reeling from a clinical setback to one with a well-funded, late-stage asset in a high-value oncology market. The market's sharp positive reaction reflects the newfound clarity in the company's strategy and the validation provided by the significant investment from specialist funds.