Group 1 - Athira Pharma, Inc. (ATHA) is currently ranked 2 (Buy) in the Zacks Rank system, indicating strong potential for outperforming the market in the next one to three months [1] - The Zacks Consensus Estimate for ATHA's full-year earnings has increased by 8.2% over the past quarter, reflecting improved analyst sentiment and earnings outlook [2] - Year-to-date, ATHA has gained approximately 28%, significantly outperforming the average gain of 11.1% for stocks in the Medical group [2] Group 2 - Athira Pharma, Inc. is part of the Medical - Biomedical and Genetics industry, which consists of 497 companies and is currently ranked 84 in the Zacks Industry Rank [3] - The Medical - Biomedical and Genetics industry has seen an average gain of 1.9% this year, indicating that ATHA is performing better than its industry peers [3] - HCA Healthcare, another notable stock in the Medical sector, has returned 41.5% year-to-date and is ranked 1 (Strong Buy) in the Zacks Rank [2][3]

About this content About Angela Harmantas Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, including Canada, the US, Australia, Brazil, Ghana, and South Africa for leading trade publications. Previously, she worked in investor relations and led the foreign direct investment program in Canada for the Swedish government ...

PART I. FINANCIAL INFORMATION This section presents Athira Pharma, Inc.'s unaudited condensed consolidated financial statements and related management discussion [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Athira Pharma, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' equity, and cash flows [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets show a decrease in total assets and stockholders' equity from December 31, 2023, to June 30, 2024, primarily driven by a reduction in cash, cash equivalents, and short-term investments Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2024 (unaudited) | December 31, 2023 | | :-------------------- | :------------------------ | :------------------ | | Cash and cash equivalents | **$73,828** | **$90,584** | | Restricted cash, current | **$8,373** | — | | Short-term investments | **$17,941** | **$56,835** | | Total current assets | **$106,704** | **$154,729** | | Total assets | **$111,253** | **$160,245** | | Total current liabilities | **$26,902** | **$28,840** | | Total liabilities | **$27,918** | **$30,057** | | Total stockholders' equity | **$83,335** | **$130,188** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported a net loss for both the three and six months ended June 30, 2024, with a slight improvement in net loss compared to the prior year periods, primarily due to reduced general and administrative expenses Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | **$22,154** | **$21,615** | **$43,390** | **$42,908** | | General and administrative | **$5,874** | **$10,025** | **$12,325** | **$18,502** | | Total operating expenses | **$28,028** | **$31,640** | **$55,715** | **$61,410** | | Loss from operations | **$(28,028)** | **$(31,640)** | **$(55,715)** | **$(61,410)** | | Other income, net | **$1,169** | **$2,043** | **$2,519** | **$3,836** | | Net loss | **$(26,859)** | **$(29,597)** | **$(53,196)** | **$(57,417)** | | Net loss per share (basic and diluted) | **$(0.70)** | **$(0.78)** | **$(1.39)** | **$(1.51)** | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This statement details changes in common stock, additional paid-in capital, and accumulated deficit, reflecting net losses and stock issuances - As of June 30, **2024**, the **accumulated deficit** was **$(362,402) thousand**, reflecting ongoing **net losses**[19](index=19&type=chunk) - **Additional paid-in capital** increased by **$3,353 thousand** during the **six months** ended June 30, **2024**, primarily due to **stock-based compensation** and **common stock issuances**[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2024, the company experienced a net decrease in cash, cash equivalents, and restricted cash, primarily due to cash used in operating activities, partially offset by cash provided by investing activities Cash Flows (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | **$(48,134)** | **$(50,476)** | | Net cash provided by investing activities | **$39,603** | **$68,008** | | Net cash provided by financing activities | **$148** | **$341** | | Net (decrease) increase in cash, cash equivalents and restricted cash | **$(8,383)** | **$17,873** | | Cash, cash equivalents and restricted cash, end of period | **$82,832** | **$114,259** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes detail business operations, accounting policies, fair value measurements, legal proceedings, and liquidity outlook - Athira Pharma, Inc. is a **late clinical-stage biopharmaceutical company** focused on developing **small molecules** to restore neuronal health and slow neurodegeneration[28](index=28&type=chunk) - As of June 30, **2024**, the Company had **cash, cash equivalents and investments** of **$91.8 million**, which is estimated to be sufficient to fund operating expenses and capital expenditure requirements through at least the next **12 months**[30](index=30&type=chunk)[31](index=31&type=chunk) - The Company recorded a **legal settlement expense** of **$10.0 million** in **Q4 2022** and an insurance recovery of **$1.6 million** in **Q4 2023** related to **securities class actions**. **$8.4 million** has been deposited into a restricted settlement fund[76](index=76&type=chunk) - **Shareholder derivative actions** were settled for corporate governance reforms and a fee/expense award to plaintiffs' counsel, with final approval granted on **July 18, 2024**[80](index=80&type=chunk) - The Company is cooperating with a **Civil Investigative Demand** from the **Department of Justice** regarding its relationship with **WSU** and **NIH** grants[82](index=82&type=chunk) Stock-based Compensation Expense (in thousands) | Expense Type | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | R&D | **$1,153** | **$1,287** | **$2,139** | **$2,284** | | G&A | **$2,052** | **$1,832** | **$3,745** | **$3,617** | | Total | **$3,205** | **$3,119** | **$5,884** | **$5,901** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operational results, liquidity, capital resources, and critical accounting policies, focusing on drug development and performance [Overview](index=31&type=section&id=Overview) Athira Pharma is a late clinical-stage biopharmaceutical company developing small molecules to restore neuronal health. Its lead candidate, fosgonimeton, is being evaluated for neurodegenerative diseases, including Alzheimer's. The company has incurred significant losses and will require substantial additional funding to advance its pipeline and operations - Athira Pharma is a **late clinical-stage biopharmaceutical company** focused on developing **small molecules** to restore neuronal health and slow neurodegeneration, modulating the neurotrophic **HGF system**[118](index=118&type=chunk) - **Fosgonimeton**, the lead drug candidate, is in **Phase 2/3** clinical trial (**LIFT-AD**) for mild-to-moderate Alzheimer's disease, with topline results targeted by the end of **Q3 2024**. The trial was amended to focus on participants not on background **AChEIs** and a **40 mg** dosing[119](index=119&type=chunk)[121](index=121&type=chunk) - The company has incurred **net losses** of **$53.2 million** and **$57.4 million** for the **six months** ended June 30, **2024** and **2023**, respectively, with an **accumulated deficit** of **$362.4 million** as of June 30, **2024**[129](index=129&type=chunk) - Substantial additional funding will be required to finance operations, complete development and commercialization of drug candidates, and expand the pipeline[131](index=131&type=chunk) [Components of Operating Results](index=35&type=section&id=Components%20of%20Operating%20Results) This section details operating expense components, including R&D and G&A, grant income, and other income, outlining their recognition and nature - **Research and development expenses** include direct costs (laboratory materials, contracted research, clinical trial costs) and indirect costs (personnel, facilities). These costs are expensed as incurred[133](index=133&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) - **General and administrative expenses** primarily cover personnel-related costs for executive, legal, finance, HR, and other administrative functions, along with third-party costs like legal, insurance, and accounting fees[139](index=139&type=chunk) - Grant income is recognized as qualifying expenses are incurred. As of June 30, **2024**, the total approved **NIH** grant amount of **$15.2 million** has been recognized, with no additional grant income expected[141](index=141&type=chunk) - **Other income, net**, primarily consists of interest earned on cash, cash equivalents, and investments, and amortization/accretion of available-for-sale securities[142](index=142&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) The company's operating results for the three and six months ended June 30, 2024, show a decrease in total operating expenses and net loss compared to the same periods in 2023. This improvement is mainly driven by a significant reduction in general and administrative expenses, partially offset by increased research and development costs for new programs and lower other income Comparison of Three Months Ended June 30, 2024 and 2023 (in thousands) | Metric | 2024 | 2023 | Dollar Change | % Change | | :------------------------------- | :---------- | :---------- | :------------ | :------- | | Research and development | **$22,154** | **$21,615** | **$539** | **2%** | | General and administrative | **$5,874** | **$10,025** | **$(4,151)** | **(41%)** | | Total operating expenses | **$28,028** | **$31,640** | **$(3,612)** | **(11%)** | | Loss from operations | **$(28,028)** | **$(31,640)** | **$3,612** | **(11%)** | | Other income, net | **$1,169** | **$2,043** | **$(874)** | **(43%)** | | Net loss | **$(26,859)** | **$(29,597)** | **$2,738** | **(9%)** | Comparison of Six Months Ended June 30, 2024 and 2023 (in thousands) | Metric | 2024 | 2023 | Dollar Change | % Change | | :------------------------------- | :---------- | :---------- | :------------ | :------- | | Research and development | **$43,390** | **$42,908** | **$482** | **1%** | | General and administrative | **$12,325** | **$18,502** | **$(6,177)** | **(33%)** | | Total operating expenses | **$55,715** | **$61,410** | **$(5,695)** | **(9%)** | | Loss from operations | **$(55,715)** | **$(61,410)** | **$5,695** | **(9%)** | | Grant income | — | **$157** | **$(157)** | **(100%)** | | Other income, net | **$2,519** | **$3,836** | **$(1,317)** | **(34%)** | | Net loss | **$(53,196)** | **$(57,417)** | **$4,221** | **(7%)** | - Increase in **R&D expenses** for the **three** and **six months** ended June 30, **2024**, was primarily due to a **$3.3 million** increase in **ATH-1105 program costs** associated with its **Phase 1** clinical trial, partially offset by decreases in **fosgonimeton program costs** and preclinical direct costs[146](index=146&type=chunk)[153](index=153&type=chunk) - Decrease in **G&A expenses** for both periods was mainly due to reductions in legal costs, business development expenses, and professional services expenses[147](index=147&type=chunk)[154](index=154&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily from equity sales, with $91.8 million in cash, cash equivalents, and investments as of June 30, 2024, projected to fund operations for at least the next 12 months. Significant future funding will be required to advance drug candidates, and the company has an 'at the market' equity offering facility of up to $75.0 million available - Since inception through June 30, **2024**, the company raised **$407.4 million** primarily from **equity issuances**[159](index=159&type=chunk) - As of June 30, **2024**, **cash, cash equivalents and investments** totaled **$91.8 million**, estimated to be sufficient for operating expenses and capital expenditures for at least the next **12 months**[159](index=159&type=chunk)[161](index=161&type=chunk) - The company has an '**at the market equity offering facility**' for up to **$75.0 million**, with no securities sold under this program as of the report date[161](index=161&type=chunk) - Material cash requirements include **$1.6 million** in **operating lease obligations** (**$0.5 million** payable within **12 months**) and **$0.9 million** in potential future **milestone payments** under the **WSU** license agreement[160](index=160&type=chunk) Cash Flows (in thousands) | Activity | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :------------------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash (used in) provided by: Operating activities | **$(48,134)** | **$(50,476)** | | Net cash (used in) provided by: Investing activities | **$39,603** | **$68,008** | | Net cash (used in) provided by: Financing activities | **$148** | **$341** | [Critical Accounting Policies, Significant Judgments and Use of Estimates](index=45&type=section&id=Critical%20Accounting%20Policies,%20Significant%20Judgments%20and%20Use%20of%20Estimates) The preparation of financial statements requires management to make estimates and assumptions, particularly for research and development costs, stock-based compensation, and income taxes. No material changes to these critical accounting policies occurred during the six months ended June 30, 2024 - **Critical accounting policies** involve significant judgment and complexity, including **research and development costs**, **stock-based compensation**, and income taxes[173](index=173&type=chunk) - No material changes to **critical accounting policies** were made during the **six months** ended June 30, **2024**[173](index=173&type=chunk) [Emerging Growth Company Status](index=45&type=section&id=Emerging%20Growth%20Company%20Status) The company is an 'emerging growth company' under the JOBS Act, allowing it to delay adopting new accounting standards and benefit from reduced disclosure requirements. This status will continue until certain financial or time-based thresholds are met - The company is an '**emerging growth company**' (**EGC**) and has elected to use the extended transition period for complying with new or revised accounting standards[175](index=175&type=chunk) - **EGC status** provides exemptions from certain disclosure requirements, including auditor attestation for **Section 404** of **Sarbanes-Oxley Act** and reduced executive compensation disclosures[175](index=175&type=chunk)[488](index=488&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Athira Pharma, Inc. is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, Athira Pharma, Inc. is exempt from providing quantitative and qualitative disclosures about market risk[178](index=178&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the principal executive and financial officers, evaluated the effectiveness of the company's disclosure controls and procedures, concluding they were effective at a reasonable assurance level as of June 30, 2024. No material changes in internal control over financial reporting occurred during the quarter - **Disclosure controls and procedures** were evaluated and deemed effective at the reasonable assurance level as of June 30, **2024**[180](index=180&type=chunk) - No material changes in **internal control over financial reporting** occurred during the quarter ended June 30, **2024**[181](index=181&type=chunk) PART II. OTHER INFORMATION This section provides additional information on legal proceedings, risk factors, equity sales, and other disclosures [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) This section details ongoing legal proceedings, including securities class actions, shareholder derivative actions, and a government investigation - Multiple **securities class action lawsuits** were consolidated, alleging violations of federal securities laws due to scientific misconduct by the former CEO. A preliminary settlement of **$10.0 million** was approved, with a final approval hearing scheduled for **October 25, 2024**[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - **Shareholder derivative actions**, alleging breach of fiduciary duties, were settled for corporate governance reforms and a fee/expense award to plaintiffs' counsel, and dismissed with prejudice on **July 18, 2024**[195](index=195&type=chunk)[197](index=197&type=chunk) - The company received a **Civil Investigative Demand** from the **Department of Justice** in **November 2022**, seeking documents related to its relationship with **WSU** and **NIH** grants, and is cooperating with the **investigation**[198](index=198&type=chunk) - The **SEC** concluded its **investigation** into the former CEO's altered images without any **enforcement action** against the company, as of **March 29, 2024**[225](index=225&type=chunk) [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) This section outlines numerous risks across business, drug development, financial position, regulatory compliance, third-party reliance, commercialization, intellectual property, cybersecurity, and common stock ownership [Risks Relating to Our Business and the Development of Our Drug Candidates](index=52&type=section&id=Risks%20Relating%20to%20Our%20Business%20and%20the%20Development%20of%20Our%20Drug%20Candidates) The company faces significant risks due to its limited operating history as a late clinical-stage biopharmaceutical company. Success hinges on the uncertain development and commercialization of drug candidates like fosgonimeton, which has shown mixed clinical trial results. The novel therapeutic approach targeting neurotrophic factors carries unforeseen risks, and early trial data may not predict future success. The company's focus on CNS and PNS degenerative disorders, a field with limited success, further amplifies these challenges - The company is a **late clinical-stage biopharmaceutical company** with a limited operating history, making future success and viability highly uncertain[200](index=200&type=chunk) - The ability to generate revenue and achieve profitability depends entirely on the successful discovery, development, and commercialization of drug candidates, which is a lengthy, expensive, and uncertain process[202](index=202&type=chunk)[230](index=230&type=chunk) - **Fosgonimeton's** development is highly uncertain; primary and secondary endpoints of **ACT-AD** and **SHAPE** trials were not met by protocoled analysis, though post hoc analysis suggested positive effects in a subgroup[208](index=208&type=chunk)[213](index=213&type=chunk) - The company's novel therapeutic approach targeting **neurotrophic factors** through **small molecules** is based on limited **Phase 1a/1b** and **Phase 2** data, and future trials may not support safety, efficacy, and tolerability[210](index=210&type=chunk)[212](index=212&type=chunk)[214](index=214&type=chunk) - Concentration of **R&D** efforts on **CNS** and **PNS** degenerative disorders is risky, as this field has seen very limited success in **product development**[215](index=215&type=chunk)[216](index=216&type=chunk) - Preliminary or topline data from clinical trials are subject to change upon comprehensive review and audit, which could result in material changes to final data and impact future development decisions[238](index=238&type=chunk)[239](index=239&type=chunk)[241](index=241&type=chunk) - Delays in reporting clinical trial data or obtaining regulatory approvals can occur due to issues like data cleaning, patient enrollment challenges, or regulatory disagreements on trial design[245](index=245&type=chunk)[246](index=246&type=chunk)[248](index=248&type=chunk) [Risks Relating to Health Epidemics](index=67&type=section&id=Risks%20Relating%20to%20Health%20Epidemics) Health epidemics, such as COVID-19, pose significant risks to the company's business, including potential delays in clinical trials, difficulties in patient enrollment and site initiation, disruptions in supply chains, and impacts on regulatory review timelines. Such events can also lead to market volatility and difficulties in raising capital - Health epidemics can cause delays or difficulties in enrolling and retaining patients in clinical trials, especially elderly subjects, and disrupt clinical site initiation and key trial activities[262](index=262&type=chunk) - Epidemics may interrupt or delay operations of regulatory authorities (e.g., **FDA**) and supply chains from contract manufacturing organizations[262](index=262&type=chunk)[265](index=265&type=chunk) - The ultimate impact of health epidemics on business operations is highly uncertain and can lead to difficulties in raising capital and increased stock price volatility[264](index=264&type=chunk)[265](index=265&type=chunk) [Risks Relating to Our Financial Position and Capital Needs](index=68&type=section&id=Risks%20Relating%20to%20Our%20Financial%20Position%20and%20Capital%20Needs) The company has a history of significant losses and expects to continue incurring them, necessitating substantial additional funding for operations, drug development, and commercialization. Funding may not be available on acceptable terms, potentially leading to delays or termination of programs. The value of investments is subject to market risks, and the ability to use net operating losses may be limited by ownership changes or tax law changes - The company has incurred **significant losses** since inception, with **net losses** of **$53.2 million** and **$57.4 million** for the **six months** ended June 30, **2024** and **2023**, respectively, and an **accumulated deficit** of **$362.4 million**[266](index=266&type=chunk) - Substantial additional funding is required to finance operations, complete development and commercialization of **fosgonimeton** and other drug candidates, and expand the pipeline[270](index=270&type=chunk)[271](index=271&type=chunk) - Inability to raise additional funding when needed could force delays, reductions, or elimination of drug **product development** programs or other operations[270](index=270&type=chunk)[275](index=275&type=chunk) - The value of the company's investments is subject to capital markets risk, including changes in interest rates and credit spreads, which may adversely affect operating results and liquidity[280](index=280&type=chunk)[281](index=281&type=chunk)[282](index=282&type=chunk) - The ability to use **net operating losses** (**NOLs**) to offset future taxable income may be limited by '**ownership changes**' under **Section 382** of the Internal Revenue Code[283](index=283&type=chunk) [Risks Relating to Regulatory Approval and Other Legal Compliance Matters](index=73&type=section&id=Risks%20Relating%20to%20Regulatory%20Approval%20and%20Other%20Legal%20Compliance%20Matters) Obtaining regulatory approval from the FDA and foreign authorities is a lengthy, unpredictable, and costly process, with no guarantee of success or broad indications. Drug candidates may cause significant adverse events, leading to delays, denials, or market restrictions. The company is subject to ongoing regulatory obligations post-approval and faces risks from changes in healthcare laws, fraud and abuse laws, and potential misconduct by employees or third parties. Disruptions at regulatory agencies can also hinder timely approvals - Regulatory approval processes are lengthy, time-consuming, and unpredictable; failure to obtain or delays in obtaining approvals will materially impair revenue generation[285](index=285&type=chunk)[287](index=287&type=chunk) - Drug candidates may cause significant adverse events or undesirable side effects, potentially leading to clinical trial interruptions, delays, abandonment of development, or restrictive labeling[291](index=291&type=chunk)[292](index=292&type=chunk)[293](index=293&type=chunk)[295](index=295&type=chunk) - Obtaining approval in one jurisdiction does not guarantee approval in others, and foreign regulatory processes can be different and more costly[297](index=297&type=chunk)[298](index=298&type=chunk) - Post-approval, the company will be subject to ongoing regulatory obligations and review, with potential penalties for non-compliance or unanticipated problems[300](index=300&type=chunk)[301](index=301&type=chunk) - Disruptions at government agencies (e.g., **FDA**, **SEC**) due to funding shortages or health concerns could delay **product development**, approval, or commercialization[305](index=305&type=chunk)[307](index=307&type=chunk) - The company may seek accelerated approval pathways, but there is no assurance of obtaining such approval, and confirmatory trials may be required post-approval[308](index=308&type=chunk)[310](index=310&type=chunk)[311](index=311&type=chunk) - Changes in healthcare legislative measures, such as the **Inflation Reduction Act of 2022**, could reduce profitability, impact drug pricing, and increase compliance burdens[313](index=313&type=chunk)[315](index=315&type=chunk)[320](index=320&type=chunk) - Relationships with healthcare professionals and participation in federal programs are subject to federal and state healthcare fraud and abuse laws, false claims laws, and privacy laws, exposing the company to potential criminal sanctions and civil penalties[329](index=329&type=chunk)[330](index=330&type=chunk)[331](index=331&type=chunk)[333](index=333&type=chunk) - Misconduct by employees, contractors, or collaborators, including non-compliance with regulatory standards or fraud and abuse laws, could lead to regulatory sanctions and reputational harm[334](index=334&type=chunk)[335](index=335&type=chunk)[337](index=337&type=chunk) [Risks Relating to Our Reliance on Third Parties](index=88&type=section&id=Risks%20Relating%20to%20Our%20Reliance%20on%20Third%20Parties) The company heavily relies on third parties for nonclinical studies, clinical trials, and manufacturing of drug candidates. This reliance increases risks related to proper execution, adherence to deadlines, quality control, and compliance with regulations (GCPs, cGMPs). Failure of these third parties could lead to significant delays, increased costs, or inability to obtain regulatory approval or commercialize products. Strategic collaborations and acquisitions also carry risks of increased costs, dilution, and integration challenges - Reliance on third parties (investigators, CROs, CMOs) for nonclinical studies and clinical trials increases risks related to control, timing, and completion, and compliance with **GCPs**[342](index=342&type=chunk)[343](index=343&type=chunk)[344](index=344&type=chunk) - Failure of third parties to properly carry out duties or meet deadlines could extend, delay, or terminate clinical trials, harming commercial prospects and increasing costs[345](index=345&type=chunk) - Reliance on third-party manufacturers for drug candidates increases risks of insufficient quantities, unacceptable costs, and non-compliance with **cGMP** regulations, potentially delaying or impairing development and commercialization[346](index=346&type=chunk)[347](index=347&type=chunk)[349](index=349&type=chunk) - Strategic collaborations, licensing arrangements, or partnerships may not realize expected benefits, face significant competition, and involve risks such as collaborator discretion, potential for competing products, and disputes[355](index=355&type=chunk)[356](index=356&type=chunk)[358](index=358&type=chunk)[359](index=359&type=chunk) [Risks Relating to Our Ability to Commercialize our Drug Product](index=95&type=section&id=Risks%20Relating%20to%20Our%20Ability%20to%20Commercialize%20our%20Drug%20Product) Even if approved, the company's drug candidates may not achieve adequate market acceptance due to factors like efficacy, safety, competition, and reimbursement. The company lacks prior commercialization experience and may struggle to build necessary sales and marketing infrastructure. Market opportunity estimates may be inaccurate, and product liability lawsuits pose substantial financial and reputational risks. Unfavorable pricing regulations and third-party reimbursement practices could also significantly harm commercial viability - Even if approved, drug candidates may not achieve adequate **market acceptance** among physicians, patients, and healthcare payors, impacting commercial success[364](index=364&type=chunk)[365](index=365&type=chunk) - The company has no prior experience commercializing a drug candidate and may lack the expertise, personnel, and resources to do so independently or with collaborators[366](index=366&type=chunk)[367](index=367&type=chunk) - Market opportunity estimates for drug candidates may be smaller than anticipated, potentially due to label restrictions or competition, adversely affecting revenue[368](index=368&type=chunk)[370](index=370&type=chunk) - **Product liability lawsuits**, arising from clinical testing or commercialization, could result in substantial liabilities, limit commercialization, and cause significant financial and reputational harm[371](index=371&type=chunk) - Uncertainty regarding insurance coverage and reimbursement, unfavorable pricing regulations, and healthcare reform initiatives could limit market access and revenue generation for approved drug products[373](index=373&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk)[376](index=376&type=chunk)[377](index=377&type=chunk) - International marketing of drug candidates presents additional risks, including differing regulatory requirements, economic instability, compliance with foreign laws, and challenges in intellectual property enforcement[382](index=382&type=chunk) [Risks Relating to Our Intellectual Property](index=102&type=section&id=Risks%20Relating%20to%20Our%20Intellectual%20Property) The company's success relies heavily on its ability to obtain, maintain, and enforce patent and trade secret protection for its drug candidates and technologies. However, patent protection is uncertain, costly, and can be challenged, invalidated, or circumvented by third parties. The company also faces risks of infringing on others' proprietary rights, and its intellectual property rights may be limited in foreign jurisdictions. Compliance with government funding regulations, like the Bayh-Dole Act, could also restrict exclusive rights - Commercial success depends on obtaining and maintaining **patent and trade secret protection** for drug candidates and technologies, and operating without infringing on others' rights[385](index=385&type=chunk) - Patent applications may not result in issued patents, and even issued patents can be challenged, invalidated, or circumvented, potentially reducing the scope of protection[386](index=386&type=chunk)[387](index=387&type=chunk)[394](index=394&type=chunk)[395](index=395&type=chunk) - The company's commercial success depends on avoiding infringement of third-party patents, and litigation over such claims could be costly, time-consuming, and delay commercialization[402](index=402&type=chunk)[403](index=403&type=chunk)[404](index=404&type=chunk) - The company may not be successful in obtaining or maintaining necessary rights to drug candidates through acquisitions and in-licenses, potentially forcing abandonment of programs[407](index=407&type=chunk) - Intellectual property discovered or developed through government-funded programs may be subject to federal regulations, such as '**march-in**' rights and manufacturing preferences for U.S.-based companies, limiting exclusive rights[458](index=458&type=chunk)[459](index=459&type=chunk) - Failure to protect the confidentiality of trade secrets or claims of wrongful use/disclosure of third-party confidential information could harm the business and competitive position[440](index=440&type=chunk)[441](index=441&type=chunk)[442](index=442&type=chunk)[443](index=443&type=chunk) [Risks Relating to Cybersecurity](index=119&type=section&id=Risks%20Relating%20to%20Cybersecurity) The company is highly dependent on its own and third-party networks and data, making it vulnerable to cybersecurity threats like viruses, unauthorized access, and ransomware. Security breaches could lead to loss of intellectual property, sensitive data, operational disruptions, and significant financial and reputational harm. Compliance with evolving data privacy regulations (e.g., GDPR, CCPA) is also complex and costly, with potential for fines and litigation - The company is dependent on networks, infrastructure, and data, exposing it to **cybersecurity risks** from various threats, including malicious code, ransomware, and social engineering attacks[461](index=461&type=chunk)[462](index=462&type=chunk)[463](index=463&type=chunk) - Security breaches or incidents could lead to loss or unauthorized use of intellectual property, trade secrets, or personal information, causing operational disruptions, regulatory sanctions, litigation, and reputational harm[465](index=465&type=chunk)[466](index=466&type=chunk) - Data collection is governed by restrictive and evolving regulations (e.g., **GDPR**, **UK GDPR**, **CCPA/CPRA**), increasing compliance costs, potential liabilities, and operational complexity, especially for cross-border data transfers[468](index=468&type=chunk)[469](index=469&type=chunk)[470](index=470&type=chunk)[472](index=472&type=chunk) [Risks Relating to Ownership of Our Common Stock](index=121&type=section&id=Risks%20Relating%20to%20Our%20Common%20Stock) Lawsuits, stockholder activism, and market volatility pose risks to common stock ownership, potentially impacting stock price and corporate governance - The company and its directors/executive officers are named defendants in lawsuits, which could result in substantial costs not fully covered by insurance and divert management's attention[474](index=474&type=chunk)[477](index=477&type=chunk) - **Stockholder activism** has been disruptive in the past and could recur, causing uncertainty about strategic direction, diverting resources, and impacting stock price[478](index=478&type=chunk)[479](index=479&type=chunk) - The **market price of common stock** has been and may continue to be volatile, influenced by clinical trial results, competitive products, regulatory developments, and financing efforts, potentially leading to substantial losses for investors[481](index=481&type=chunk)[482](index=482&type=chunk) - A significant portion of outstanding shares may be sold into the market, potentially causing the stock price to decline[484](index=484&type=chunk)[485](index=485&type=chunk) - Concentrated ownership by directors, executive officers, and significant stockholders could limit the ability of other stockholders to affect key transactions or a change of control[486](index=486&type=chunk)[487](index=487&type=chunk) - **Anti-takeover provisions** in charter documents and state law could make an acquisition difficult and limit stockholders' ability to influence management or stock price[493](index=493&type=chunk)[494](index=494&type=chunk)[495](index=495&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=130&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period - No unregistered sales of equity securities occurred during the last fiscal quarter[509](index=509&type=chunk) [Item 3. Defaults Upon Senior Securities](index=130&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period - This item is not applicable[509](index=509&type=chunk) [Item 4. Mine Safety Disclosures](index=130&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period - This item is not applicable[509](index=509&type=chunk) [Item 5. Other Information](index=130&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or any non-Rule 10b5-1 trading arrangement during the last fiscal quarter - No director or officer adopted or terminated a **Rule 10b5-1** trading arrangement or any non-**Rule 10b5-1** trading arrangement during the last fiscal quarter[509](index=509&type=chunk) [Item 6. Exhibits](index=131&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including organizational documents and executive officer certifications - Exhibits include Amended and Restated Certificate of Incorporation, Certificate of Amendment, Amended and Restated Bylaws, and Certifications of Principal Executive and Financial Officers[511](index=511&type=chunk)[512](index=512&type=chunk) [Signatures](index=132&type=section&id=Signatures) The report is duly signed on behalf of Athira Pharma, Inc. by Mark Litton, President and Chief Executive Officer, and Andrew Gengos, Chief Financial Officer and Chief Business Officer, as of August 1, 2024 - The report is signed by Mark Litton, President and Chief Executive Officer, and Andrew Gengos, Chief Financial Officer and Chief Business Officer, on **August 1, 2024**[515](index=515&type=chunk)

Exhibit 99.1 Athira Pharma Reports Second Quarter 2024 Financial Results and Pipeline and Business Updates Topline data from completed Phase 2/3 LIFT-AD clinical trial of fosgonimeton as a potential treatment for mildto-moderate Alzheimer's disease targeted for September 2024 Phase 2/3 LIFT-AD data to be presented in an oral presentation at CTAD in October 2024 Phase 1 clinical trial of ATH-1105 underway for the potential treatment of amyotrophic lateral sclerosis (ALS) BOTHELL, Wash., August 1, 2024 – Athi ...

Topline data from completed Phase 2/3 LIFT-AD clinical trial of fosgonimeton as a potential treatment for mild-to-moderate Alzheimer’s disease targeted for September 2024 Phase 2/3 LIFT-AD data to be presented in an oral presentation at CTAD in October 2024 Phase 1 clinical trial of ATH-1105 underway for the potential treatment of amyotrophic lateral sclerosis (ALS) BOTHELL, Wash., Aug. 01, 2024 (GLOBE NEWSWIRE) -- Athira Pharma, Inc. (NASDAQ: ATHA), a late clinical-stage biopharmaceutical company focused ...

Fosgonimeton mitigated amyloid-β-induced toxicity, lowered pTau levels and reduced disruption of protein clearance mechanisms that may contribute to pTau pathology Fosgonimeton treatment, alone and in combination with lecanemab, protected cultures of primary neurons from the toxic effects of amyloid-β BOTHELL, Wash., July 31, 2024 (GLOBE NEWSWIRE) -- Athira Pharma, Inc. (NASDAQ:ATHA), a late clinical-stage biopharmaceutical company focused on developing small molecules to restore neuronal health and slow n ...

Athira Pharma, Inc (ATHA) recently announced that it has dosed the last patient in the phase II/III LIFT-AD study, which is evaluating its pipeline candidate, fosgonimeton for the treatment of mild-to-moderate Alzheimer’s disease (AD). Shares of the company were up 29.4%, following the announcement of the news.The LIFT-AD study evaluates once-daily fosgonimeton (40 mg) subcutaneous injection versus placebo over a treatment period of 26 weeks in mild-to-moderate AD patients. The study is designed to assess t ...

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HIGHLIGHTS: Angilak Project: The Angilak Project is host to the Lac 50 Uranium Deposit, which is one of the largest high-grade deposits outside of the Athabasca Basin, with a historical mineral resource estimate of 43.3M lbs at an average grade of 0.69% U3O8.1In 2023, drilling at Angilak by Latitude Uranium (acquired by ATHA) intersected grades of up to 7.54 % U3O8 over 1.6 m.The 2024 Angilak Exploration Program is part of the Company’s overall 2024 Exploration Program and consists of Phase I (diamond drill ...

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