Can a small biotech successfully tackle an Everest climb like Alzheimer’s? Athira has $85M and some influential backers ready to give it a shot
There haven’t been a lot of big venture rounds for biotech companies looking to run a Phase II study in Alzheimer’s.
The field has been a disaster over the past decade. Amyloid didn’t pan out as a target — going down in a litany of Phase III failures — and is now making its last stand at Biogen. Tau is a comer, but when you look around and all you see is destruction, the idea of backing a startup trying to find complex cocktails to swing the course of this devilishly complicated memory-wasting disease would daunt the pluckiest investors.
Which brings me to Athira, a little, Seattle-based biotech that caught my attention with a heads-up that they’re announcing an $85 million round today to fund their Phase II/III quest for Alzheimer’s. Athira’s team has been on a long, 9-year journey to get here, and they are acutely aware of the burned-out wreckage and disaster headlines covering the route that they have been cruising.
To get the money, they enlisted a long line of backers: Perceptive Advisors for the lead with participation from new investors RTW Investments, 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, Avidity Partners, and existing investors including Rick and Suzanne Kayne and Sahsen Ventures.
Joe Edelman, who runs the well-connected Perceptive, is joining the board after giving the crew a thumbs up.
So far, Athira’s backers have put up about $20 million to get to this point, so you can see how big a deal this is to the biotech team.
There are investors out there who have never been burned by Alzheimer’s and who are still ready to consider jumping in, says CEO Leen Kawas, who’s been making the rounds, and then there have been plenty which have.
“I’m proud we put together a syndicate that includes both,” she tells me.
Edelman and the rest are backing a drug — NDX-1017 — that bypasses the whole toxic plaque debate and focuses on another familiar strategy: the frayed synaptic network in the brain that erodes with the disease. Boost the network and you can stop, possibly reverse, the damage that corrodes cognition. For awhile.
Their small molecule is designed to target hepatocyte growth factor (HGF) and its receptor, MET, in an effort to regenerate afflicted tissue. And that’s something these investors haven’t seen before.
Athira got this far by spotlighting data they say back up the efficacy profile they’re looking for. In a Phase Ib, Kawas says, researchers used a test to gauge patients’ ability to count odd tones peppered in a string of repeated tones. For patients with dementia, their normal pattern of recognition falls in a 400 to 450 millisecond range, says the CEO. Their baseline in the study was 390. In the drug arm, just 7 patients, that dropped to an average of 311. There was no change among 4 placebo patients, says Kawas.
Now, they’ll need to see if they can replicate a cognitive improvement in a much larger Phase II. And then they can move on to a pivotal Phase III. The FDA requires positive data from 2 controlled studies, and that might be it. But Kawas knows that if they can’t convince regulators — balancing the data against the mountainous unmet need — they’d need to go on to a second Phase III.
The odds against success here are significant. Everything fails in Alzheimer’s. Or has. But winning over a syndicate of investors able to provide that kind of cash is also validating — and no mean achievement in this environment.
Right now, the Athira team has spent a good chunk of their lives devoted to seeing if this drug can work. “We’re believers that this can be done,” says the CEO.
It’s a daunting uphill climb, but they intend to make believers out of everyone else as well. As somewhere down the trail, the plan is to float an IPO down Wall Street to see if they can win over an even bigger group of believers.