Athira Pharma’s experimental Alzheimer’s disease drug has failed a Phase 2 clinical trial and the working theory as to why is that the small molecule does not play well with widely prescribed standard of care therapies. Company executives say the results suggest their drug, fosgonimeton, could work better as a monotherapy. They need to decide how to proceed soon because a pivotal test is already underway.

The main goal of the 77-patient Phase 2 test was to show improvement according to P300, a measure of neural electrical activity that assesses how quickly the brain processes information from external stimuli. It’s an atypical way of assessing Alzheimer’s disease drugs. Bothell, Washington-based Athira describes this 26-week test as a “learning study” to evaluate P300 as a biomarker for Alzheimer’s in a larger group of patients and over a longer time period. The Phase 1 study had included only 11 Alzheimer’s patients who were evaluated over eight days.

The Phase 2 test was also designed to assess fosgonimeton in a way that’s closer to real-world situations. To achieve that, the trial included some patients already receiving standard Alzheimer’s treatments, such as donepezil. That drug and others in its class are acetylcholinterase inhibitors (AChEi), medicines that block an enzyme responsible for breaking down a key neurotransmitter whose lower levels are associated with worsening Alzheimer’s symptoms.

Though the trial failed to meet its main goal, the preliminary data show encouraging signs, compared to placebo, in a subgroup of patients who received fosgonimeton only. In addition to P300 improvement, the results also showed improved scores as measured by ADAS-Cog11, a widely used assessment of the severity of cognitive symptoms in those with dementia. This assessment is a more traditional clinical trial measure for Alzheimer’s.

Athira had no reason to think that AChEis would affect fosgonimeton, CEO Mark Litton said during a conference call Wednesday. But with the encouraging signs in the fosgonimeton only group, Litton said that the company now believes what happened is that AChEis diminished the effect of the Athira drug.

The subgroup of patients who showed improvement isn’t large enough to assess statistical significance but the company contends that the improvement suggests that the Athira drug has potential as a monotherapy. Pressed on why standard treatment would affect the study drug, Litton conceded the company is still searching for answers.

“It’s a fair question,” Litton said. “We’ve been really thinking about it, and it’s small numbers. We just don’t know. We’re going to look at it and hopefully we’ll have a better answer next time we speak.”

Many of the Alzheimer’s drugs in development are antibodies that block beta amyloid or tau, proteins that build up in the brains of patients. Athira takes a different approach with fosgonimeton, a small molecule that can cross the blood-brain barrier and activate hepatocyte growth factor and its receptor, MET. These proteins are expressed in the central nervous system. Activating them is intended to spark a repair mechanism hoped to restore neurons and improve overall brain health and function.

Athira Chief Medical Officer Hans Moebius said that analysis of the Phase 2 results is ongoing and will inform whether the Phase 3 study underway needs to be modified. This pivotal study has a target enrollment of 420 patients with mild to moderate Alzheimer’s disease. Moebius said that so far, enrollment is split evenly between those who are being treated with standard of care AChEis in addition to fosgonimeton and those who are receiving the study drug only.

P300 is not a main or secondary goal of the Phase 3 study. The primary endpoint is to show a change in the combined scores from ADAS-Cog11 and another Alzheimer’s assessment. Litton said possible changes to the late-stage clinical trial include evaluating fosgonimeton as a monotherapy, comparing it to a placebo. He added that Athira will speak with the FDA, clinical trial investigators, and the company’s scientific advisors before making any decisions on that trial. The company will try to learn everything it can from the Phase 2 study before determining whether it needs to unblind that clinical trial. Litton said he expects Athira will be able to say more in coming weeks.

“All options are open and we’re going to explore everything because we really need to get to the bottom of this,” he said.

Athira’s stock price took a hit from the news, sinking more than 64% to $3 a share on Wednesday morning. There is more riding on the outcome of the fosgonimeton clinical trials than Alzheimer’s disease. Athira’s approach of targeting HGF and MET has potential applications in other neurological disorders. Fosgonimeton is in mid-stage clinical development for Parkinson’s disease, dementia, and dementia with Lewy bodies. As of the end of the first quarter of this year, Athira reported that it had $301 million in cash, cash equivalents, and investments.

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