LONA 8-K
LeonaBio, Inc. (LONA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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Item 2.05 Costs Associated with Exit or Disposal Activities.
On September 15, 2024, Athira Pharma, Inc. (the “Company”) committed to a workforce reduction that is expected to result in the termination of approximately 49 positions, representing approximately 70% of the Company’s workforce (the “Restructuring”). The Company took this step to decrease its costs, extend its cash runway, and create a more streamlined organization to support its strategic priorities, including the continued development of ATH-1105. In connection with the Restructuring, the Company currently estimates it will incur one-time costs of approximately $2.8 million, consisting primarily of cash severance costs and termination benefits, which the Company expects to recognize in the third quarter of 2024. The Company expects to substantially complete the Restructuring by December 31, 2024. The estimates of costs and expenses that the Company expects to incur in connection with the Restructuring are subject to a number of assumptions and actual results may differ materially. The Company may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the Restructuring. On September 17, 2024, the Company issued a press release regarding the Restructuring, a copy of which press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Departure of Executive Officers
In connection with the Restructuring, on September 16, 2024 the Company terminated without cause the employment of Andrew Gengos, chief business officer and chief financial officer, effective October 1, 2024, and Rachel Lenington, chief operating officer and chief development officer, effective October 1, 2024.
Appointment of Vice President of Finance as Principal Financial Officer and Principal Accounting Officer
On September 16, 2024, the Company’s board of directors (the “Board”) appointed Robert Renninger, age 40, vice president of finance, as the Company’s principal financial officer and principal accounting officer, effective as of October 1, 2024.
Mr. Renninger has served as the vice president of finance of the Company since January 2022. He previously served as its senior director of finance from September 2020 to January 2022, and as its director of finance from July 2020 to September 2020. Mr. Renninger served as financial controller of Infobip (formerly OpenMarket), a global communications platform, from July 2019 to July 2020. He also served as technical controller of Baker Hughes, an energy company, from September 2017 to May 2019. Mr. Renninger also served in various roles at Ernst & Young, LLP, a global accounting firm, from September 2007 through September 2017, including most recently as senior manager. Mr. Renninger has over 15 years of experience serving in various finance, accounting, and auditing positions for companies in the pharmaceutical, technology, and energy sectors.
There are no arrangements or understandings between Mr. Renninger and any other persons pursuant to which he was appointed as principal financial officer and principal accounting officer. There are also no family relationships between Mr. Renninger and any director or executive officer of the Company and he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
The Company and Mr. Renninger previously entered into an offer letter, effective June 22, 2020, which is at-will and does not have a specific term. Pursuant to such offer letter and adjustments made to Mr. Renninger’s compensation subsequent to the date of his offer letter, Mr. Renninger is entitled to the following compensation and benefits:
Pursuant to the terms of Mr. Renninger’s change in control agreement with the Company, effective March 17, 2023, subject to Mr. Renninger’s execution and non-revocation of the Company’s standard separation agreement and release of claims, if Mr. Renninger’s employment is terminated inside the period beginning one month prior to the date of a change in control and ending 12 months following that change in control either (1) by the Company without “cause” (excluding by reason of death or disability) or (2) by Mr. Renninger for “good reason” (as such terms are defined in such agreement, such termination, a “Qualified Termination”), Mr. Renninger will receive vesting acceleration of 100% of any “service-based awards” (as defined in such agreement) that are unvested and outstanding on such termination date. In the event any such termination does not constitute a Qualified Termination, Mr. Renninger may be eligible to receive certain severance or other benefits as may be established under the Company’s then existing severance and benefits plans or programs.
In connection with his appointment, Mr. Renninger will enter into a standard indemnification agreement in the form previously approved by the Board.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the complete text of Mr. Renninger’s offer letter and change in control agreement, which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Forward-Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements are identified by such words as “believe,” “expect,” “anticipate” and words of similar import and are based on current expectations that involve risks and uncertainties, such as the Company’s plans, objectives, expectations and intentions. All statements other than historical or current facts are forward-looking statements, including, without limitation, statements about the nature, timing and scope of potential workforce reductions, including the expected costs of potential workforce reductions and the anticipated period time over which such costs will be paid. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. These statements, like all statements in this report, speak only as of their date. Except as required by law, the Company does not undertake to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Description |
10.1 |
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Employment Offer Letter between the Registrant and Robert Renninger. |
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10.2 |
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Change in Control Agreement between the Registrant and Robert Renninger. |
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99.1 |
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104 |
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Cover Page Interactive Data File (formatted as Inline XBRL) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Athira Pharma, Inc. |
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September 17, 2024 |
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/s/ Mark Litton |
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Mark Litton |
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President and Chief Executive Officer |
Exhibit 10.1
4000 MASON RD
SUITE 300, BOX 352141
SEATTLE, WA 98195-2141
June 21, 2020
Robert Renninger
415 West Crockett Street
Seattle, WA 98119
Dear Mr. Renninger,
We are pleased to offer you a position with Athira Pharma, Inc, (the “Company”) as Director of Accounting & Reporting. If you decide to join us, you will become part of a fast-paced and dedicated team that works together to accelerate the development of life changing therapeutics.
Effective July 6, 2020, you will start in a fulltime position at an annual salary of $150,000 which will be paid monthly in accordance with our normal payroll procedures. You will eligible for PTO, group-term life insurance, and will qualify for health insurance under the company’s plan. Your eligibility for our 401K program will be effective immediately. Though we do not currently have a formal bonus program, and cannot guarantee a particular future bonus amount, the Company expects to adopt a bonus program in coming months and we expect you would be eligible to participate in such program in the future.
We will recommend to the Board of Directors that you be granted an option to purchase shares of the Company’s common stock. The number of shares subject to the option will be determined in accordance with the Company’s compensation plan, which is currently being revised. When awarded, the options will be subject to the terms and conditions applicable to options granted under the Company’s Employee Stock Option plan, as described in that plan and the applicable stock option agreement, which you will be required to sign. The exercise price per share will be equal to the fair market value per share on the date the option is granted, as determined by the Company’s Board of Directors in good faith compliance with applicable guidance in order to avoid having the option be treated as deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended. There is no guarantee that the Internal Revenue Service will agree with this value. You should consult with your own tax advisor concerning the tax risks associated with accepting an option to purchase the Company’s common stock.
The Company is excited to have you join our team and anticipates a beneficial and productive relationship. Nevertheless, you should be aware that your employment with the Company is for no specified period and constitutes “at will” employment meaning that either you or the Company may terminate your employment at any time and for any reason, with or without cause. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at will” nature of your employment may only be changed in an express written agreement signed by you and the Company’s Chief Executive Officer. We request that, in the event of your resignation, you give the Company notice of at least two weeks.
The Company reserves the right to conduct background investigations and/or reference checks on all of its potential employees. Your job offer, therefore, is contingent upon a clearance of such a background investigation and/or reference check, if any.
For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.
We also ask that, if you have not already done so, you disclose to the Company any and all agreements relating to your prior employment that may affect your eligibility to be employed by the Company or limit the manner in which you may be employed. It is the Company’s understand that any such agreements will not prevent you from performing the duties of your position and you represent that such is the case. Moreover, you agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company. Similarly, you agree not to bring any third party confidential information to the Company, including that of your former employer, and that in performing your duties for the Company you will not in any way utilize any such information.
As a Company employee, you will be expected to abide by the Company’s rules and standards. Specifically, you will be required to sign an acknowledgment that you have read and understand the Company’s rules of conduct which are included in the Company Handbook which the Company will soon complete and distribute. As a condition of your employment you are also required to sign and comply with a Confidential Information Invention Assignment Agreement (the “Agreement”) that requires, among other provisions, the assignment of patent rights to any invention made during your employment at the Company, and nondisclosure of Company proprietary information. In the event of any dispute or claim relating to or arising out of our employment relationship, you and the Company agree that (i) any and all disputes between you and the Company shall be fully and finally resolved by binding arbitration, (ii) you are waiving any and all rights to a jury trial but all court remedies will be available in arbitration, (iii) al disputes shall be resolved by a neutral arbitrator who shall issue a written opinion and (iv) the arbitration shall provide for adequate discovery.
This letter supersedes and replaces any prior understandings or agreements, whether oral, written or implied, between you and the Company regarding the matters described in this letter.
To accept the Company’s offer, please sign and date this letter in the space provided below. If you accept our offer, your first day of employment will be July 7, 2020. This letter, along with any agreement relating to proprietary rights between you and the Company, set forth the terms of your employment with the Company and supersede any prior representations or agreements including, but not limited to, any representations made during your recruitment, interviews or pre-employment negotiations whether written or oral. This letter including, but not limited to, its at will employment provision, may not be modified or amended except by a written agreement signed by the Chief Executive Officer of the Company and you.
This offer of employment will terminate if it is not accepted, signed and returned by June 26, 2020.
We look forward to your acceptance of our offer and to working with you at Athira Pharma, Inc.
Sincerely,
/s/ Leen Kawas
Leen Kawas
President & Chief Executive Officer
Accepted:
/s/ Robert Renninger 6/22/2020
Robert Renninger Date
18706 NORTH CREEK PARKWAY
SUITE 104
BOTHELL, WA 98011
February 7, 2024
Dear Robert Renninger,
In recognition of your contributions and accomplishments this year, we are pleased to present you with the following:
Annual Discretionary Bonus:
2023 Bonus Payout: $84,938
Individual bonus %: 100%
Corporate bonus %: 92.5%
Salary Adjustment:
We are also pleased to present you with the following changes to your compensation which will be effective retroactively to January 1, 2024, and reflected in your February 15th payroll, including the retroactive plus up for the month of January.
Current Base Salary: $300,000
Merit Increase: 4%
New Base Salary: $312,000
2024 Equity Awards
Additionally, we are excited to inform you that Athira is awarding you the following equity as approved by the Compensation Committee of the Board:
Option Grant
Stock Options: 74,154
Strike Price – closing price as of February 14, 2024: $3.26
Thank you so much for your commitment to restoring lives by thoughtfully and urgently advancing bold therapies for neuronal health. You are a vital part of the Athira team.
We are all looking forward to another productive and impactful year.
Sincerely,
Mark Litton
Chief Executive Officer
Exhibit 10.2
ATHIRA PHARMA, INC.
CHANGE IN CONTROL AGREEMENT
This Change in Control Agreement (the “Agreement”) is made by and between Athira Pharma, Inc., a Delaware corporation (the “Company”), and Robert Renninger (“Executive”), effective as of ________________, 2023 (the “Effective Date”).
This Agreement provides certain protections to Executive in connection with an involuntary termination of Executive’s employment with the Company in connection with a change in control of the Company. Certain capitalized terms used in this Agreement are defined in Section 7 below.
The Company and Executive agree as follows:
For the avoidance of doubt, in the event of Executive’s Qualifying Termination that occurs prior to a Change in Control, any then outstanding and unvested portion of Executive’s Awards will remain outstanding (and unvested) until the earlier of (x) one (1) month following the Qualifying Termination, or (y) a Change in Control that occurs within one (1) month following the Qualifying Termination, solely so that any benefits due on a Qualifying Termination can be provided if the Qualifying Termination occurs during the Change in Control Period (provided that in no event will Executive’s stock option Awards or similar Awards remain outstanding beyond the Award’s maximum term to expiration). If no Change in Control occurs within one (1) month following a Qualifying Termination, any unvested portion of Executive’s Awards automatically and permanently will be forfeited on the date one (1) month following the date of the Qualifying Termination without having vested.
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For purposes of this definition, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.
Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Section 409A. Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (x) its sole purpose is to change the jurisdiction of the Company’s incorporation, or (y) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.
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Athira Pharma, Inc.
18706 North Creek Parkway, Suite 104
Bothell, WA 98011
Attention: Chief Executive Officer
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[Signature page follows]
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By her, his, or its signature below, each of the parties signifies its acceptance of the terms of this Agreement, in the case of the Company by its duly authorized officer.
COMPANY Athira pharma, inc.
By: /s/ Mark Litton
Mark Litton
Title: Chief Executive Officer___
Date: March 16, 2023
EXECUTIVE /s/ Robert Renninger
Robert Renninger
Date: March 17, 2023
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Exhibit 99.1
Athira Pharma to Focus on Advancement of ATH-1105 for the Treatment of Neurodegenerative Diseases
ATH-1105 is an orally delivered, positive modulator of the neurotrophic HGF system that is currently in a Phase 1 clinical trial with completion expected by year end 2024 and commencement of dosing of ALS patients expected in 2025
Company announces cost containment measures in alignment with focus on advancing ATH-1105
BOTHELL, Wash., September 17, 2024 – Athira Pharma, Inc. (NASDAQ: ATHA), a clinical stage biopharmaceutical company focused on developing small molecules to restore neuronal health and slow neurodegeneration, today announced that following the topline data readout from the Phase 2/3 LIFT-AD clinical trial of fosgonimeton to treat Alzheimer’s disease (AD) the Company plans to focus on advancing the clinical development program for ATH-1105 as a potential treatment for neurodegenerative diseases, including amyotrophic lateral sclerosis (ALS) and AD. ATH-1105 is the Company’s oral, next-generation small molecule positive modulator of the neurotrophic hepatocyte growth factor (HGF) system currently in development for the treatment of ALS.
In alignment with Athira’s focus on continued development of ATH-1105, the Company is implementing cost containment measures including a reduction in workforce of approximately 70%. Athira expects one-time costs of approximately $2.8 million and cost savings of approximately $13.4 million on an annualized basis related to the reduction in the workforce. As a result of these cost containment measures and based on its current operating plan, Athira now expects to extend its cash runway into the first quarter of 2026. Moving forward, the Company will review and consider various options including partnering and financing with the intent of extending its cash runway to achieve initial proof-of-concept and enable further development for ATH-1105 in neurodegenerative diseases.
“We are encouraged about the potential for ATH-1105, as this oral, next-generation HGF-modulating drug candidate has enhanced blood-brain-barrier penetration and improved pharmacokinetic properties. Our robust preclinical data to date have demonstrated ATH-1105's neuroprotective effects including a consistent reduction in plasma neurofilament light chain (NfL) levels,” said Mark Litton, Ph.D., President and Chief Executive Officer of Athira.
“The NfL biomarker data from the LIFT-AD study suggests that HGF modulation may reduce levels of plasma NfL with the potential effect of preventing neurodegeneration. In ALS, plasma NfL is an established marker of disease progression and neurodegeneration and reduction in NfL is associated with improvement in clinical outcomes,” said Javier San Martin, M.D., Chief Medical Officer of Athira. “We look forward to the continued development of this promising therapeutic candidate for the potential treatment of neurodegenerative diseases including ALS.”
Dr. Litton added, “I want to thank our colleagues who will be departing from Athira as part of the restructuring and acknowledge their many contributions to the development of therapeutics that modulate the neurotrophic HGF system, and to the evolution of our Company. We are sorry to see them go and wish them the very best in the future.”
The Company is conducting a first-in-human Phase 1 (NCT 06432647) double-blind, placebo-controlled trial that is enrolling up to 80 healthy volunteers to evaluate single and multiple oral ascending doses of ATH-1105. The study is evaluating the safety and tolerability of ATH-1105 and includes measurements of pharmacokinetic outcomes. Athira completed the first cohort of healthy volunteers in June 2024 and expects to complete the full study by year-end 2024, with a goal to begin dosing ALS patients in 2025.
About ATH-1105
ATH-1105 is a next-generation, orally administered, small molecule drug candidate in development for the potential treatment of ALS. In preclinical models of ALS, ATH-1105 has been shown to significantly increase survival, enhance motor and nerve function, reduce peripheral nerve demyelination and axon degeneration, and improve neurodegeneration and inflammation.
About Athira Pharma, Inc.
Athira Pharma, Inc., headquartered in the Seattle, Washington area, is a clinical-stage biopharmaceutical company focused on developing small molecules to restore neuronal health and slow neurodegeneration. Athira aims to alter the course of neurological diseases by advancing its pipeline of drug candidates that modulate the neurotrophic HGF system. For more information, visit www.athira.com. You can also follow Athira on Facebook, LinkedIn, X (formerly known as Twitter) and Instagram.
Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not based on historical fact and include statements regarding: Athira’s drug candidates as potential treatments for amyotrophic lateral sclerosis and other neurodegenerative diseases; future development plans; the anticipated timing of its ongoing clinical trials and planned clinical trials; the potential learnings from preclinical studies and other nonclinical data and their ability to inform and improve future clinical development plans; expectations regarding the potential efficacy and commercial potential of Athira’s drug candidates and regarding the safety and tolerability of ATH-1105; Athira’s ability to advance its drug candidates into later stages of development; Athira’s planned focus on the development of ATH-1105 for the treatment of amyotrophic lateral sclerosis; implementation of the reduction in workforce and related costs and anticipated cost savings; estimates of Athira’s anticipated cash runway; potential future partnerships, financings and collaborations; the ability to advance product candidates into later stages of development; and other information that is not historical information. Forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “may,” “will,” “should,” “on track,” “would,” “expect,” “plan,” “believe,” “intend,” “pursue,” “continue,” “suggest,” “potential,” “target” and similar expressions. Any forward-looking statements are based on management’s current expectations of future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those set forth in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the data from preclinical and clinical trials may not support the safety, efficacy and tolerability of Athira’s drug candidates; development of drug candidates may
cease or be delayed; regulatory authorities could object to protocols, amendments and other submissions; future potential regulatory milestones for drug candidates, including those related to current and planned clinical studies, may be insufficient to support regulatory submissions or approval; Athira may not be able to recruit sufficient patients for its clinical trials; the outcome of legal proceedings that have been or may in the future be instituted against Athira, its directors and officers; possible negative interactions of Athira's drug candidates with other treatments; Athira’s assumptions regarding its financial condition and the sufficiency of its cash, cash equivalents and investments to fund its planned operations may be incorrect; adverse conditions in the general domestic and global economic markets; the impact of competition; the impact of new or changing laws and regulations; Athira’s assumptions regarding its financial condition may be incorrect; Athira may ultimately not pursue financing, may be unsuccessful if it does pursue financing or may be unable to finance on commercially reasonable terms; Athira may fail to successfully implement the reduction in workforce, may incur greater costs than estimated or may not recognize the anticipated resulting cost savings; Athira may be unable to enter into new partnerships, financings or collaborations; as well as the other risks detailed in Athira’s filings with the Securities and Exchange Commission from time to time. These forward-looking statements speak only as of the date hereof and Athira undertakes no obligation to update forward-looking statements. Athira may not actually achieve the plans, intentions, or expectations disclosed in its forward-looking statements, and you should not place undue reliance on the forward-looking statements.
Investor & Media Contact:
Julie Rathbun
Athira Pharma
[email protected]
206-769-9219