Venture capital fundraising can be tough enough without the added challenges of a pandemic.
Nonetheless, Seattle-based biotechnology company Athira Pharma has landed an impressive $85 million for an upcoming round of pivotal testing on its NDX-1017 drug that seeks to restore brain function in Alzheimer's patients.
The company's courting of investors, most intense from February through April, endured hurdles at a time when funding COVID-19 research was of more immediate public concern and as the corporate world tightened pocketbooks.
"We had to be realistic that we'd be experiencing some slowing down and give investors time to digest what's happening," said Athira President and CEO Leen Kawas. "But I would say that just by having patience in this unusual type of environment and also respecting what the investors are going through -- along with our story, the work and the huge medical need -- is what helped get us through the finish line."
The story of Athira's work is usually its ultimate trump card: Making a drug it hopes can go beyond merely slowing the progression of Alzheimer's and actually reverse its devastating impacts.
"What was good for us here was that we had a really good story," Kawas said. "We had fantastic data and a huge medical need -- Alzheimer's patients. It was very obvious that despite the macro environment changes, there is still a huge medical need in Alzheimer's, and the intrinsic value of the work that we're doing was still there."
A small-molecule therapeutic drug, NDX-1017 is designed to specifically enhance the activity of a naturally occurring brain mechanism that has the potential to restore neuron health and brain function. Its initial testing round went so well that the company plans to combine two phases into one this time, over roughly a six-month stretch, involving 250 to 300 patients with mild- to moderate-stage Alzheimer's.
Initial data from this "Phase 2/3" trial should be available late next year, with complete results by 2022.
The company previously raised $12 million ahead of the earlier clinical testing that began in fall 2017, for a total of $14 million since inception before the current round.
Ultimately, the company's fundraising result was at the upper end of what it hoped for. The money will enable more comprehensive trials, a doubling of its 17-employee staff in the near term, and further work on some of its other, less developed drug candidates.
Fundraising efforts gathered steam soon after the company presented data from its opening round of NDX-1017 tests at the annual Clinical Trials on Alzheimer's Disease conference in Boston last November. From there, momentum continued through the company's mid-January appearance at the J.P. Morgan Healthcare Conference in San Francisco -- the biotech industry's biggest event -- only to run up against the COVID-19 outbreak come February.
"We had some slowing down due to COVID, but we didn't lose the interest," Kawas said.
A more immediate concern was ensuring supply lines remained intact to convert the company's pharmaceutical ingredients into drugs in time to start the next trial phase. Speaking during a teleconferenced biopharma CEO roundtable in late April, Kawas acknowledged there were "two weeks of panic and trying to figure things out" before things normalized rather quickly.
Athira Chief Operating Officer Mark Litton said that after the pandemic's initial jolt, having the world hyper-focused on finding COVID-19 treatments and vaccines probably helped Athira: After all, it was biotech companies that everybody kept turning to for solutions.
"The silver lining was there really was an interesting trend that biotech companies are getting a lot more respect," Litton said. "Having raised money for many, many years in different venues, there just seems to be more respect from the average person."
Also, having so many companies researching COVID-19 drugs didn't siphon away investor money. Litton feels "having something that's totally outside of COVID" even worked in the company's favor.
"There are many groups that are chasing the COVID solution and most investors really want to diversify," he said.
The list of new financial backers brought on through the investment bank Perceptive Advisors includes 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 and Avidity Partners.
A native of Jordan, Kawas was invited in 2013 to help commercialize laboratory work she'd done as a Washington State University doctoral student. The resulting startup, then known as M3 Biotechnologies, changed its name to Athira -- derived from the Arabic word, Athir, that loosely translates to "a force" or "an energy" -- in April 2019.
A major reason cited by Kawas for the company's continued success with investors is also what makes Alzheimer's so frightening for many: The disease has staying power and isn't about to vanish overnight.
"A lot of these investors are long-term investors," she said. "So, they don't only think about this year or next year ... .The interest in these long-term huge upsides, like finding a treatment for Alzheimer's, has not been impacted by COVID."