Athira Stock Soars 72% on Transformative Cancer Drug Bet
The company secures a $90 million financing to license late-stage breast cancer drug lasofoxifene, pivoting from its challenging Alzheimer's pipeline.
Athira Pharma (NASDAQ: ATHA), a biotechnology firm long dedicated to fighting neurodegenerative diseases, saw its shares skyrocket over 72% on Tuesday after announcing a transformative pivot into oncology. The company revealed an exclusive licensing agreement for a late-stage breast cancer drug, backed by a substantial $90 million financing that secures its operational runway into 2028.
The Bothell, Washington-based company's stock surged to levels not seen in over a year, closing at $7.12 in a dramatic reaction from investors. The move signals a major strategic shift for Athira, which has faced significant headwinds in its primary mission to develop treatments for Alzheimer's disease.
At the center of the deal is lasofoxifene, a selective estrogen receptor modulator (SERM) developed by Sermonix Pharmaceuticals. Athira has acquired exclusive worldwide rights to the drug, which is being targeted for patients with metastatic breast cancer who have developed ESR1 mutations. According to the company's official announcement, the agreement positions Athira to take over a promising, late-stage asset.
Unlike a speculative early-stage bet, lasofoxifene is already in a potentially registrational Phase 3 clinical trial, ELAINE-3. The trial is reportedly over 50% enrolled, with top-line data anticipated in mid-2027. The drug has already shown encouraging results in a Phase 2 study, where it demonstrated a median progression-free survival of over 13 months in heavily pre-treated patients, according to reports from investing.com.
Fueling the acquisition and its future development is a $90 million private placement co-led by prominent biotech investors Commodore Capital, Perceptive Advisors, and TCGX. The financing provides Athira with a critical capital infusion, extending its cash runway into 2028 and providing the resources needed to push lasofoxifene toward commercialization. The deal also includes warrants that could provide up to an additional $146 million if exercised.
This strategic pivot offers a new narrative for Athira, whose investors have watched the company grapple with setbacks in its Alzheimer's pipeline. By licensing a late-stage asset with a clear development path and significant market potential, management has moved decisively to de-risk its portfolio and create a new avenue for growth.
Under the terms of the license, Sermonix will receive a pre-funded warrant to purchase approximately 5.5 million shares of Athira common stock. Sermonix is also eligible for up to $100 million in milestone payments tied to commercial and sales targets, in addition to tiered royalties on future net sales. The deal structure allows Athira to redirect its focus and capital toward an asset that could reach the market sooner than its legacy programs, offering a more tangible path to revenue for the currently zero-revenue biotech.