Athira Pharma Pivots from Alzheimer’s to Oncology in Strategic Transformation
In a bold strategic shift that signals a new chapter for the biotech company, Bothell, Washington-based Athira Pharma is pivoting its primary focus from Alzheimer’s disease to oncology. The company announced on December 18, 2025, that it has secured the licensing rights to a promising Phase 3 breast cancer drug from Sermonix Pharmaceuticals. This dramatic course correction comes after several challenging years marked by clinical setbacks and leadership changes. The announcement triggered an immediate positive response from investors, with Athira’s stock surging 70% to $7 per share. This remarkable turnaround reflects renewed confidence in the company’s future direction and the potential of its newly diversified pipeline.
The deal represents a lifeline for Athira, which has experienced significant turbulence in recent years. The company’s journey has been particularly rocky since 2021, when CEO and President Leen Kawas resigned following confirmation that she had altered images in scientific papers from her graduate studies—research that had formed the foundation of the company’s scientific approach. This leadership crisis was followed by further setbacks when the company’s primary Alzheimer’s disease drug candidate, fosgonimeton, failed to meet expectations in a critical Phase 2/3 trial last year. These disappointments ultimately forced Athira to lay off approximately 70% of its workforce in September 2024, representing 49 employees. The company’s future appeared uncertain as it struggled to find a path forward after these consecutive blows.
Athira’s new direction is supported by an impressive $90 million in funding from a consortium of respected healthcare investment firms, with potential for an additional $146 million if research milestones are achieved. Under the terms of the agreement, Athira gains exclusive rights to develop and commercialize lasofoxifene—a breast cancer therapy currently in clinical trials—in markets outside of Asia and select Middle Eastern countries. The drug’s clinical trial has already enrolled more than half of its target patient population, with initial results expected by mid-2027. As part of the arrangement, Sermonix receives 5.5 million shares of Athira’s stock, with Athira committing to pay up to $100 million plus limited royalties if certain commercial targets are reached. This substantial financial backing provides Athira with an extended cash runway into 2028, giving the company breathing room to execute its new strategy.
The investment group backing this transformation includes some of the most prominent names in biotech investing. New York’s Commodore Capital, biotech hedge fund Perceptive Advisors, and California-based TCGX are leading the funding round, with additional participation from ADAR1, Blackstone Multi-Asset Investing, Kalehua Capital, Ligand Pharmaceuticals, New Enterprise Associates (NEA), Spruce Street Capital, and 9vc. Joseph Edelman, founder and CEO of Perceptive Advisors, expressed enthusiasm about the company’s new direction, stating, “We’re proud to support this evolution and excited by the opportunity to deliver meaningful impact for patients and shareholders alike.” This vote of confidence from sophisticated biotech investors suggests that industry experts see genuine potential in Athira’s new strategic focus and the promising late-stage asset it has acquired.
While embracing its new oncology focus, Athira is not abandoning its neuroscience roots entirely. The company will continue advancing ATH-1105, its drug candidate for treating amyotrophic lateral sclerosis (ALS). Having successfully completed Phase 1 safety trials for this compound, Athira plans to begin Phase 2 trials in early 2026. This dual-track approach—pursuing both the newly acquired late-stage breast cancer drug and its own ALS candidate—creates a more diversified pipeline that reduces the company’s risk profile. Mark Litton, Athira’s President and CEO, characterized the strategic shift as “exciting and transformative,” noting that “by securing rights to this late-stage program—while also advancing pATH-1105 for ALS—we are building a pipeline that we believe has the potential to change lives and create enduring value.”
Athira’s dramatic pivot illustrates the inherent risks and potential rewards in biotech development, as well as the importance of adaptability in the face of setbacks. Just a year after devastating clinical trial results forced major layoffs and threatened the company’s future, Athira has engineered a remarkable turnaround that has rekindled investor interest and extended its financial runway. The company’s ability to attract substantial new investment despite its recent struggles speaks to both the persuasiveness of its new strategy and the persistent appetite among biotech investors for companies with promising late-stage assets. As Athira embarks on this new chapter, it carries not only the hopes of patients who might benefit from its therapies but also valuable lessons about resilience and strategic flexibility in the face of scientific and corporate challenges. The coming years will reveal whether this dramatic course correction will ultimately deliver the life-changing treatments and shareholder value that Athira and its investors envision.
