Athira Pharma CEO Leen Kawas has been placed on temporary leave until the Seattle area biotechnology company completes a review “stemming from doctoral research Dr. Kawas conducted while at Washington State University.”
Shares fell sharply in after-hours trading, sinking more than 30%.
The 10-year-old company — which is developing drugs for the treatment of Alzheimer’s disease — said that Chief Operating Officer Mark Litton will assume day-to-day responsibilities during Kawas’ leave. She will remain on the board.
The company, which has formed a special committee to look into the matter, issued a statement from board chair Tachi Yamada.
“Athira is committed to the integrity of scientific research in its mission to restore neuronal health for those suffering from neurological diseases, so that patients can regain their memories, lives, and family relationships. ATH-1017 was discovered, developed, and patented by Athira on the basis of novel data generated within the company. The company is confident in the therapeutic potential of ATH-1017 for treating dementia.”
The company said it was not commenting on the matter until the review is completed, and Kawas was not immediately available for comment.
Last summer, Kawas told GeekWire that the potential of Athira’s technology is “huge.” She co-founded Athira — formerly known as M3 Biotechnology — with WSU researchers Joseph Harding and Jay Wright, with WSU noting the promise of initial studies in a 2012 article.
The story did not mention Kawas, and referred to the technology as a “WSU drug” with Harding and Wright and other colleagues reporting initial results in the Journal of Pharmacology and Experimental Therapeutics.
Athira went public last September, raising $204 million after pricing shares at $17. The stock was trading around $12 Thursday afternoon.
At the time of the IPO, Kawas was the first woman to guide a company public in Washington state in more than two decades.
“I’ve been mistaken for the coat check girl more times than I can count, ” Kawas told Forbes in 2016 profile. “But people who thought I was the coat girl at the beginning of the meeting were willing to invest a lot of money in my company by the end of it.”