Three class action Lawsuits alleging SEC breaches have been filed on behalf of shareholders, just a week after the CEO of Athira Pharma was placed on temporary leave following claims of changed photographs in scientific papers she produced. All three complaints were filed on Friday, alleging that the Bothell, Washington based firm made false and misleading representations to the Securities and Exchange Commission in its filings in preparation for its IPO in September of last year, which led to investors being misled about faulty research.
The business, which is developing a medication for Alzheimer’s and Parkinson’s disease dementia in clinical trials, raised around $204 million in its first public offering (IPO) at a share price of $17.00. Since the CEO, Leen Kawas, was placed on leave on June 17, the stock has dropped by about 40% and was trading at $10.37 on Tuesday.
According to one of the cases, Athira’s SEC filing failed to mention that Kawas published research papers with inappropriately manipulated pictures when she was a graduate student. As a result, Athira’s intellectual property and product development for Alzheimer’s disease treatment was founded on faulty research. Yet, according to the claims, Kawas’ graduation study paved the way for Athira’s efforts to create novel remedies. According to one of the Lawsuits, Kawas is cited in a crucial SEC document as critical to developing an innovative translational development strategy.