Athira Pharma (ATHA) ($24MM market cap) is a biotech targeted on remedies to revive neuronal well being and gradual neurodegeneration. On 9/3, the corporate introduced its Section 2/3 trial of fosgonimeton for mild-to-moderate Alzheimer’s Disase didn’t meet its main or secondary endpoints. Quite than waiving the white flag and launching a strategic alternate options course of, two weeks after, they introduced Athira was going to concentrate on its earlier stage ALS remedy, ATH-1105together with a 70% workforce reduction-in-force.
According to their funding intent, every Reporting Individual might once in a while talk about with the Issuer’s administration, administrators, different shareholders and others, the Issuer’s efficiency, enterprise, strategic course, capital construction, product growth program, prospects and administration, in addition to varied methods of maximizing stockholder worth. Representatives of the Reporting Individuals are engaged in discussions with the Issuer’s administration and different third events with respect to a possible extraordinary transaction involving the Issuer and different third events. There isn’t a assurance that any such transaction will develop or materialize, or if it does, as to its timing or whether or not the Reporting Individuals will take part.
This positive appears like Perceptive is making an attempt to rearrange a reverse merger transaction with Athira Pharma because the shell. This concept is somewhat riskier, Athira hasn’t declared strategic alternate options and has some fairly vital money burn, time is not on Perceptive’s facet to a get a deal achieved. If we get effectively into 2025 and there is not any deal, the money burn may push the corporate to boost fairness and pursue the unique plan.
Here is my again of the envelope math on Athira:
The pretty small money stability accessible to a reverse merger candidate may very well be a difficulty (I sometimes do not have a look at ones a lot smaller than this one), however as we noticed with ATVE, a few of these offers have been structured in a method the place the reverse-merger candidate is actually solely within the public itemizing shell and legacy money might be paid out as a particular dividend to authentic shareholders.
Disclosure: I personal shares of ATHA