By Svea Herbst-Bayliss
BOSTON (Reuters) -Billionaire investor Richard (Ric) Kayne is seeking two board seats at Athira Pharma, arguing the biotech company needs a new chief executive officer to successfully guide its development of treatments for Alzheimer's and other neurodegenerative diseases.
Kayne, who founded private equity investment firm Kayne Anderson Capital Advisors, told Athira shareholders that he nominated himself and George Bickerstaff, a former chief financial officer of Novartis Pharma AG, to the company's eight- person board, according to a letter seen by Reuters that was sent to shareholders on Wednesday.
He told the company about his plans last month.
The company's stock price climbed 2.15% in early trading as the broader market was off modestly.
"Simply put, Dr. Litton is not the right CEO for Athira," Kayne wrote, noting that Litton has little operational, clinical trial or scientific experience and spent most of his career in business development roles.
Mark Litton became CEO last year, succeeding Leen Kawas. Kawas oversaw the development of ATH-1017, an agent designed to regenerate brain tissue, and the company's public listing in 2020.
Kayne, who owns 4.8% of Athira's stock, says the stock price has tumbled 26% since Litton took over day-to-day operations in June and investors generally don't have faith in Litton's credentials or his ability to tell the company's story.
He is similarly critical of Athira's board, arguing the directors had little relevant expertise until recently when new members with biotech experience were added after he started pushing for changes. Kayne said the company offered him a board seat earlier this month but noted the "offer was quickly rescinded with little explanation."
A company representative said three independent directors joined in the last year and that the board already has the skills Kayne and Bickerstaff would add. She noted that board members have spoken with Kayne "numerous" times in an effort to find a "collaborative path" but that Kayne "rejected our attempts to find common ground."
"Adding me and George Bickerstaff will help the Board restore credibility and refocus on what really matters: attracting the best management team and giving ATH‑1017 the best chance of success," Kayne wrote.