Deal with US Department of Justice resolves allegations against former chief executive
US biopharmaceutical company Athira Pharma, based in Washington state, has agreed to pay more than $4 million (£3.3 million) to resolve allegations that it violated the False Claims Act (FCA) by failing to report allegations of research misconduct by its former chief executive, Leen Kawas.
The settlement with the US Department of Justice resolves charges that, when applying for grants from the National Institutes of Health (NIH), Athira did not disclose that Kawas had been suspected of falsifying and manipulating scientific images in her 2011 doctoral dissertation and in research papers published from 2011 to 2014. Several of the papers were referenced in the company’s grant applications and reports between January 2016 and June 2021, including in a grant that the agency funded in 2019.
The case was brought under the FCA’s whistleblower provisions, meaning whistleblower Andrew Mallon will receive a $200,000 (5%) share of the settlement.
Athira focuses on developing small molecules to restore neuronal health and slow neurodegeneration. Tessa Gorman, US attorney for the Western District of Washington, said the company’s research should not be tainted by the misconduct highlighted in this case, emphasising that Athira ‘immediately notified NIH’ of the research misconduct after the full board of directors became aware of it.
In October 2021, Kawas resigned from Athira after an investigation concluded that she had altered images in various publications while a graduate student at Washington State University (WSU). The company has said that Kawas’s actions at WSU did not involve ATH-1017, its lead development candidate to treat Alzheimer’s disease and other kinds of dementia.
Nevertheless, in September 2024, Athira terminated 49 employees – about 70% of its workforce – to cut costs and restructure as ATH-1017 progressed into clinical trials.
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