Will Athira's expense reductions continue in 2025?

**Athira Pharma's expense reductions are likely to continue in 2025**, considering the company's strategic shifts and financial adjustments following the disappointing LIFT-AD trial results. Here's an analysis to support this conclusion:

1. **Strategic Focus Shift**: Athira has paused the development of fosgonimeton and is focusing on ATH-1105, indicating a strategic realignment. This focus on a single program suggests a prioritization of resources.
2. **Cost Containment Measures**: The company has announced layoffs, reducing the workforce by approximately 70%. This reduction in personnel is a significant cost-saving measure that is expected to result in annualized cost savings of approximately $13.4 million.
3. **Financial Projections**: Athira expects one-time costs of approximately $2.8 million related to the workforce reduction. The company plans to extend its cash runway into the first quarter of 2026, which implies that expense reductions are necessary to sustain operations.
4. **Prioritization of Pipeline Programs**: ATH-1105 is Athira's next-generation small molecule positive modulator of the neurotrophic HGF system, currently in a Phase 1 clinical trial. The company is planning to commence dosing ALS patients in 2025, which requires significant resources. The prioritization of this program suggests that expense reductions will be needed to support its continued development.
5. **Market Conditions and Investor Expectations**: The biotech sector is known for its volatility, and investor expectations are influenced by clinical trial outcomes. Athira's stock has hit a 52-week low, indicating investor concerns. The company's financial results have shown a net loss of $96.9 million for 2024, which is an improvement from the previous year but still reflects a significant cash usage. The need to reduce expenses is likely driven by both strategic and financial prudence to manage cash flow and extend the company's runway.

In conclusion, given Athira's strategic adjustments, cost containment measures, and financial projections, it is reasonable to expect that expense reductions will continue in 2025. The company's focus on ATH-1105 and cost-saving measures such as workforce reductions are indicative of a strategy to manage expenses while advancing its most promising pipeline programs.