Athira Pharma raises $204M in IPO, reaching ‘big milestone’ in fight against Alzheimer’s and other diseases

Athira Pharma CEO Leen Kawas accepts the award for CEO of the Year at the 2019 GeekWire Awards. (GeekWire Photo / Kevin Lisota)

More than 5 million Americans have Alzheimer’s disease, and the number is projected to rise to nearly 14 million by 2050. The disease is the sixth-leading cause of death in the U.S. And the economic impact is massive, with hundreds of billions spent annually fighting it.

Athira Pharma is on a mission to treat the debilitating disorder — and now it has additional capital and a bigger platform to pursue that goal as a public company.

The Seattle biotech company on Friday morning became the third Washington state company to make its initial public offering this year, debuting on the Nasdaq under the ticker ATHA. It’s the latest privately-held company to test the public markets amid a rush of IPOs in recent months, particularly in biotech and software, despite the ongoing pandemic.

“This is a big milestone,” Athira CEO Leen Kawas said Friday in an interview with GeekWire. “We are one step closer to hopefully impacting a lot of people’s lives positively.”

Athira priced its IPO on Thursday at $17 per share, which came in at the high end of its range. The company sold 12 million shares and raised $204 million in the IPO. The stock was up slightly in Friday morning trading. Athira’s valuation is now about $670 million.

Founded in 2011, Athira is in late-stage development for its lead therapeutic candidate called NDX-1017. The drug could halt or reverse the nerve damage that causes Alzheimer’s disease and other illnesses including Parkinson’s and ALS, or Lou Gehrig’s Disease. It uses regenerative technology that rebuilds connections between neurons.

Kawas said the company’s technology is different than anything else pursued over the past few decades.

“This is a new approach that could help a lot of people recover their life, and reduce the burden of this huge unmet medical need,” she said.

The Athira team. (Athira Photo)

The IPO marks an achievement for Kawas, who began building the foundation of Athira while earning her Ph.D. in molecular pharmacology at Washington State University nearly a decade ago. She’s an immigrant entrepreneur who moved to the U.S. from Jordan in 2007.

Kawas said she knew very little about starting companies and raising capital, let alone taking a startup public, until she was exposed to U.S. business culture and mentality. The 35-year-old CEO credited the “very special” environment for helping turn a kernel of an idea into a medical treatment that can potentially improve the lives of millions of people.

“This is a very difficult period in the U.S., but there is so much greatness here,” said Kawas, who co-founded Athira with WSU researchers Joseph Harding and Jay Wright. “We should not underestimate how amazing this ‘special sauce’ is that we have in the U.S.”

As GeekWire previously reported, Kawas is also the first woman to guide a company to an initial public offering in Washington state in more than two decades.

Kawas said she was shocked and saddened by the statistic, but also proud to be part of diversifying the industry and opening up opportunities for more people. She hopes the world changes so that her daughter will someday not be called “the first woman” to accomplish something but rather the first person.

While Kawas would be the first woman to take a company public in Washington state since 1998, there’s evidence nationally that a tide may be turning — albeit slowly — when it comes to female-led companies.

In the first half of last year, 13 women CEOs led U.S. companies to IPOs, representing 15% of the total. That was the highest proportion since 2014, and well ahead of 2018, according to analysis by CNBC.

Athira COO Mark Litton. (Athira Photo)

During today’s video interview with GeekWire, Athira COO Mark Litton took a moment to praise Kawas.

“Leen, you are an amazing role model,” he told the CEO. “You really are, for so many people. And that’s great.”

Litton joined Athira last year after previously co-founding Alder Biopharmaceuticals, another Seattle-area biotech that went public in 2014 and was acquired in 2019.

“It’s so exciting to have another Seattle biotech publicly-traded company,” Litton said, adding that “Seattle has some of the top scientists in the world, and we have a good track record of blending science and business together.”

Athira, previously known as M3 Biotechnology, plans to double the size of its 20-person team as it relocates into a larger facility in Bothell, Wash. The company said it is committed to the local biotech and life sciences ecosystem. Some of the startup’s early investors include Washington state’s Life Sciences Discovery Fund; the Washington Research Foundation; and Seattle-based the W Fund.

Athira raised a $85 million Series B round in June, bring its total funding from private investors to $100 million.

The company’s largest shareholder is Perceptive Life Sciences, which led the Series B round and has a 11.6% stake, followed by RTW Investments at 10.9%. Kawas is the third-largest shareholder with a 9.4% stake.

Athira in December presented what it described as positive initial results from a clinical trial that included patients with Alzheimer’s disease.

The company said there is promising evidence that NDX-1017 can help not only slow down disease but also improve brain function. It can also aid Alzheimer’s patients at both early and late stages of the disease.

Depending on the development and approval process, Athira’s NDX-1017 drug could come to market within 2-to-3 years.

In its IPO paperwork, Athira reported a net loss of $5.2 million in 2019, and a loss of $3.8 million through the first six months of 2020.

The company notes in its filing, “We do not have any products approved for commercial sale, and we have not generated any revenues related to our products since inception.” That reflects the traditional life cycle of biotech companies, which commonly invest in research and development for years before bringing products to market.

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Seattle’s Athira Pharma files for IPO to fund quest for Alzheimer’s and Parkinson’s breakthroughs

The Athira team. (Athira Photo)

Athira Pharma is aiming to go public.

The Seattle biotech filed initial IPO paperwork Wednesday, a surprising move that would give the company additional capital to develop its therapies for brain diseases.

Founded in 2011, Athira is in late-stage development for its lead therapeutic candidate called NDX-1017. The drug could halt or reverse the nerve damage that causes Alzheimer’s disease and other illnesses including Parkinson’s and ALS, or Lou Gehrig’s Disease. It uses regenerative technology that rebuilds connections between neurons.

Athira in December presented what it described as positive initial results from a clinical trial that included patients with Alzheimer’s disease.

The company, previously known as M3 Biotechnology, is led by Dr. Leen Kawas, a 35-year-old entrepreneur originally from Jordan. The foundation of Athira began while Kawas was earning her Ph.D. in molecular pharmacology at Washington State University nearly a decade ago.

“The potential of the technology is huge,” Kawas, who co-founded Athira with WSU researchers Joseph Harding and Jay Wright, said earlier this year.

Athira Pharma CEO Leen Kawas accepts the award for CEO of the Year at the 2019 GeekWire Awards. (GeekWire Photo / Kevin Lisota)

More than 5 million Americans have Alzheimer’s, according to the Alzheimer’s Association, with that number projected to rise to nearly 14 million by 2050. The disease is the sixth-leading cause of death in the U.S. There are as many as 35 million cases worldwide, according to Athira.

In its IPO paperwork, Athira reports a net loss of $5.2 million in 2019, and a loss of $3.8 million through the first six months of 2020.

The company notes in its filing, “We do not have any products approved for commercial sale, and we have not generated any revenues related to our products since inception.” That reflects the traditional life cycle of biotech companies, which commonly invest in research and development for years before bringing products to market.

Athira would be the third Washington state company to go public this year, following health tech startup Accolade and marketing startup ZoomInfo. It would be the first Seattle biotech to go public since Adaptive Biotechnologies IPO’d last year.

The market for biotech IPOs is red-hot this year. Tech IPOs are also on the rise despite the ongoing economic crisis. Five software startups filed for an IPO on Monday alone. Many companies have traded higher since debuting on the public markets over the past several months.

Athira just raised capital from private investors, reeling in a $85 million Series B round in June. Total funding to date is north of $100 million.

In a June interview with GeekWire, Kawas and Athira COO Mark Litton acknowledged the unusually large size of the Series B round, particularly for a 17-person company trying to develop therapies for brain disease. “It really validates what we have done,” said Litton, a veteran biotech exec who previously co-founded Alder Biopharmaceuticals, another Seattle company that went public in 2014 and was acquired in 2019.

Kawas said previously that the COVID-19 pandemic has not impacted Athira, which avoided layoffs and is hiring. Though the company listed COVID-19 under its risk factors in the IPO filing, noting that the pandemic could cause delays in clinical trials or FDA approval timelines.

Athira’s pipeline, from its IPO filing.

The company’s largest shareholder is Perceptive Life Sciences, which led the Series B round and has a 11.6% stake, followed by RTW Investments at 10.9%. Kawas is the third-largest shareholder with a 9.4% stake.

Other backers include Viking Global Investors, Venrock Healthcare Capital Partners, Franklin Templeton, Rock Springs Capital, LifeSci Venture Partners, Surveyor Capital (a Citadel company), Highside Capital Management, Logos Capital, funds managed by Janus Henderson Investors, Sofinnova Investments, and Avidity Partners.

Athira has $85.1 million in cash and cash equivalents. It plans to trade on NASDAQ under the symbol ATHA. Kawas holds a doctor of pharmacy degree from the University of Jordan. She won Startup CEO of the Year honors at the GeekWire Awards last year.

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