Latest drama at Athira: Investor calls for CEO replacement and wants two board seats

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Richard Kayne. (Kayne Anderson Capital Advisors Photo)

A billionaire investor of Athira Pharma is calling for the ouster of the Seattle company’s CEO and nominated himself and the former chief financial officer at Novartis for the board of directors.

Richard Kayne, who owns 4.8% of Athira, issued an open letter to shareholders Wednesday criticizing the company’s current CEO, Mark Litton, who he said has “little to no operational, clinical trial or scientific experience, having spent substantially all of his career in business development roles.”

“Simply put, Dr. Litton is not the right CEO for Athira, and I believe the Board erred in hastily replacing Dr. Kawas,” Kayne wrote.

Kayne recently co-founded a life sciences fund with former Athira CEO Leen Kawas, who resigned from the company last year and left the board in the wake of an investigation into the integrity of data in papers she co-authored that helped to form the initial basis for the company. An investigation by an independent board appointed by the company concluded she had altered data-containing images in her papers.

Kawas was replaced by Litton, who holds a Ph.D. in the life sciences and is the former chief business officer at Alder Biopharmaceuticals and VP of business development at Celltech. Litton joined Athira in 2019 as its COO before becoming CEO this past October.

The stock price of the company, which is conducting clinical trials for Alzheimer’s disease, slid after the investigation into Kawas’ papers. In his letter, Kayne blames current management. “I cannot sit idle and allow this inexperienced Board and management team to destroy the value of the company,” wrote Kayne, who is founder and co-chair of Kayne Anderson Capital Advisors.

Kayne was critical of the composition of the company’s board, saying its members have no “skin in the game” beyond director grants. He also criticized board chair Kelly Romano, writing that she “has limited to no drug development, scientific or biotechnology experience.” Romano was previously founder and CEO of BlueRippleCapital, a consultancy firm for global technology companies, and was appointed chair last summer.

Athira issued a formal statement in response. “Mr. Kayne has rejected our attempts to find common ground,” said Athira. “Mr. Kayne has pushed Athira to resume a formal relationship with his current business partner and the company’s former CEO.”

Kayne nominated himself to the board along with George W. Bickerstaff, III, Novartis’ former CFO and current board chair of health company Innoviva and the nonprofit International Vaccine Institute. Kayne also said that Athira offered him a board seat in March, “but that offer was rescinded with little explanation.”

Athira recently announced two new appointments to its board, Wave Life Sciences’ chief medical officer Michael Panzara and Kronos Bio’s COO and general counsel Barbara Kosacz; Vaxcyte CEO Grant Pickering was added earlier this year. In its statement, Athira said that Kayne and Bickerstaff’s skillset is “already well represented among our existing directors.”

The company expects to announce top-line data next quarter on a phase 2 clinical trial of its experimental therapy for Alzheimer’s disease, and is anticipating phase 3 data from another Alzheimer’s trial early next year. The company also recently dosed its first patient in a phase 2 trial for Parkinson’s disease dementia and another form of dementia.

“The board of directors is confident Athira has the right strategy and the right team to lead the company through this pivotal chapter,” the company added in its response.



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