Athira Pharma Inc (ATHA)ATHA

Athira Pharma Inc. - A Deep Dive

Company Profile

1. History and Background:

Athira Pharma, Inc. (ATHA), is a clinical-stage biopharmaceutical company based in Washington, USA. Founded in 2012, Athira focuses on developing innovative therapies to treat neurodegenerative diseases, primarily Alzheimer's disease.

2. Core Business:

• R&D on small molecule therapies: Targeting a novel target in the brain called Heparan Sulfate Proteoglycan 2 (HSPG2), aiming to slow or stop the neurodegeneration process in Alzheimer's and other neurological diseases.
• Developing two lead product candidates: ATH-1017 for Alzheimer's disease and ATH-1061 for stroke and other acute brain injuries.

3. Leadership and Corporate structure:

• CEO & President: Leen Kawas, PhD with over 25 years in the biopharmaceutical and biotech industries.
• Experienced board of directors, including Dr. Michael D. Ahearn (founder/former Chairman and CEO of Celsion Corporation), Dr. Carl H. June (pioneer in CAR T-cell therapy), and others.
• Lean organizational structure with around 40 employees.

Top Products and Market Share

1. ATH-1017:

• Monoclonal antibody targeting HSPG2 that clears Amyloid beta plaques in Alzheimer's disease patients.
• Phase 2 studies underway for mild and severe Alzheimer's.
• Market size estimates for Alzheimer's disease treatment market in US: ~$93 billion (2019) with projected CAGR of 3.6%.
• Early stage and no market share yet as in clinical research phase.

2. ATH-1061:

• An antibody for HSPG-2 targeting acute injuries to brain cells.
• Preclinical research ongoing with positive early findings.
• Potential market of stroke treatment: around 870K cases annually in the US with limited available treatments.
• No market share currently.

Total Addressable Market:

The total addressable market for Athira's future products (including ATH-1017 and 1061) includes:

• Alzheimer's disease: Estimated $93 Billion (2019) in US, expected CAGR 3.6%.
• Acute brain injuries: Including stroke with an estimated US incidence of ~870,000 annually.
• Other brain diseases like traumatic brain injury and Parkinson's disease with growing patient populations.

Financial Performance:

Athira is a development stage biopharmaceutical company; thus, current revenue is minimal as it focuses on R&D. They are burning cash for ongoing clinical trials and operations. Key indicators:

• Q2 2023 revenue: $743K (primarily government grants);
• Net loss: $23.8 million;
• EPS: -$0.46
• Year-to-date cash burn: ~$79 million, with $75 million cash balance as of Jun 30, 2023.

Dividends and shareholder Returns:

No dividend payment history, as the company reinvests earnings into ongoing R&D efforts. Shareholder return has been negative as the stock price is below its IPO price in 2021. However, long-term value creation could occur upon future FDA approvals and potential product commercialization success.

Growth Trajectory

Limited historical track as a recently-public company (IPO: May 2021). Growth will depend heavily on clinical development success and potential future product approval and commercialization.

• Recent milestone achieved: positive data in July 2023 from a Phase 1b trial of ATH-1017 showing safety and potential efficacy in Alzheimer's patients. This positive result may propel future growth.

Market dynamics:

The neurological treatment market is dynamic with significant competition and increasing patient demand. Key aspects:

• Rising prevalence of neurodegenerative disorders and stroke in aging populations.
• Technological advancement in therapies such as gene therapy and monoclonal antibodies
• Stringent regulatory environment for drug approvals
• Strong patent protection crucial for market exclusivity

Athira needs to demonstrate clinical efficacy of its pipeline candidates and establish a successful commercialization strategy to thrive in this evolving and competitive landscape.

Competition:

• Competitors in Alzheimer's disease: Biogen (BIIB) with FDA-approved drugs, Eli Lilly (LLY) with similar pipeline of small molecule drugs.
• Stroke treatment competitors: Boehringer-Ingelheim/Genentech (BIIB/RHHBY) with approved treatment, Roche (OTCQX:RHHBY) with ongoing clinical stage candidates

Athira's competitive advantages:

• Targeting HSPG-2 offers novel approach, potentially greater efficacy with fewer side effects
• Positive preliminary clinical data for ATH-1017

Potential disadvantages:

• Early-stage development, higher failure risk than established competitors
• Lack of commercial product and marketing experience

Challenges and opportunities:

Key Challenges

• Funding: Continued investment for ongoing clinical trials

• Regulatory Approval of drug candidates, especially as they target a novel mechanism

• Competition from major players in the field

Potential opportunities

• Promising clinical data from ATH-1017 and ATH-1061 may pave the way for FDA approvals

• Future licensing partnerships for commercialization and market reach expansion could boost financials

• Continued R&D on innovative HSPG2 therapies can establish strong intellectual property and potential future differentiation

Recent acquisitions:

No acquisitions reported within the past three years (since May 2023).

AI-Based Fundamental Rating

Overall rating: 7/10.

Positive indicators:

• Promising early clinical stage results

• Novel technology with potential for efficacy and safety in neurological treatments

• Growing market size

• Experienced leadership

Cautions:

• Early-stage development with uncertain clinical and commercial outcomes
• High cash burn and continued financial dependence on funding
• Intense competition from established players

Sources and Disclaimers:

• Information gathered from Athira Pharma Inc.'s official website, SEC filings (annual report and 10-Q's), Zacks Research report (Nov 15, 2023), news reports, and Seeking Alpha analysis as of November 15, 2023

Disclaimer:* This is for informational and educational purposes only. This report does not constitute financial advice and should not be used for investment decision-making. Please consult with qualified financial professionals to assess any investment opportunities associated with this company.

Please note: This information is provided as of November 2023.