On Thursday, June 17th 2021, Athira Pharma, Inc. (NASDAQ:ATHA) announced that the company’s CEO, Leen Kawas, would be placed on temporary leave pending an investigation into allegations that she altered images used in several research papers she wrote while a graduate student at Washington State University. According to Barron’s, Athira was founded by Kawas and colleagues from Washington State University based on the research she and others did there.

On Friday June 18th, 2021, the day following the disclosure of the investigation, Athira’s stock plummeted nearly 39% causing significant harm to investors.

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Stifel Analyst: Risk of "clear negative implications" for Athira

The Seattle Times reports that, online commenters had previously raised concerns about her lab result images on PubPeer, a forum featuring discussions on scientific papers. One commenter, Dr. Elisabeth Bik, told The Seattle Times some results looked like they may have been “photoshopped.”

According to Barron’s, Stifel analyst, Paul Matteis, addressed the potential impact to the company in a note, stating:

We don’t really know how to process this development…the scientific hypothesis behind Athira came out of the work [that] Dr. Kawas did in graduate school so there is risk that whatever comes out of this investigation could have clear negative implications for how we/investors view the asset, and/or management credibility.

Athira is a late clinical-stage biopharmaceutical company that focuses on developing small molecules to restore neuronal health and stop neurodegeneration.

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