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Biotech company Athira Pharma used invalid research conducted by its CEO to develop its intellectual property and products for the treatment of Alzheimer’s disease, three class action lawsuits allege.
The class action lawsuits were filed in Washington after Athira Pharma CEO Leen Kawas was placed on temporary leave from the company after allegations were made that Kawas altered images in scientific papers she authored, Geek Wire reports.
The three class action lawsuits, filed on behalf of shareholders, all allege violations of the Securities Exchange Act, saying that the company lied to the Securities and Exchange Commission in its 2020 IPO filing, misleading investors about its research.
One of the lawsuits alleges that Athira’s SEC filing failed to state that Kawas “had published research papers containing improperly altered images while she was a graduate student,” and that “as a result, Athira’s intellectual property and product development for the treatment of Alzheimer’s were based on invalid research,” Geek Wire reports.
All three state that Kawas’ graduate research, which was first questioned in 2016, was the basis of Athira’s efforts to develop new treatments. In 2016, a comment appeared one of Kawas’s papers appeared on PubPeer — where scientists can comment on the integrity of data in scientific papers — and recently three other studies have been called into question. All of the papers in question were researched by Kawas while she was a graduate student at Washington State University, where she received a doctoral degree in 2011.
On June 17, news site STAT published a story looking into the claims of image and later that day the Athira co-founder and CEO went on leave.
Athira is currently in clinical-stage development of a drug to treat Alzheimer’s and Parkinson’s disease dementia. During its IPO, the company raised about $204 million at a share price of $17.00, Geek Wire reports. Since the news, share prices have fallen by about 40% to $10.37 on Tuesday.
The three class action lawsuits seek compensatory damages from Athira Pharma, Kawas, and a number of others involved in the company’s IPO.
Athira Pharma isn’t the only company facing legal action from shareholders over an IPO listing. In June, shareholders in cybersecurity company Proofpoint filed a class action lawsuit against the company saying that they would be “irreparably harmed” if a proposed acquisition went ahead. Shareholder Susan Finger alleges that Proofpoint and its board of directors violated the Securities Exchange Act and demands the courts block the company’s acquisition until all violations are resolved.
Has a company ever misrepresented itself to you as a shareholder and caused you to lose money? Let us know in the comments section!
The claims were filed in the U.S. District Court for the Western District of Washington by Seattle law firms Tousley Brain Stephens; Rossi Vucinovich; and Keller Rohrback.
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