Report on Research Compliance 22, no. 2 (February, 2025)
Scientist and pharmaceutical researcher Andrew P. Mallon—who first reported to NIH and others in 2016 his suspicions that then-Athira Pharma CEO Leen Kawas falsified data in published papers—filed the whistleblower suit without an attorney that led to the firm’s recent $4 million False Claims Act (FCA) settlement.
Mallon, CEO of Calista Pharmaceuticals, filed suit in June 2021 after learning that the National Institute on Aging awarded Athira $15.2 million to study a potential treatment for Alzheimer’s based, in part, on the same fabricated data he first discovered while serving as a peer reviewer years earlier. As a result of Mallon raising concerns, the 2016 application he flagged was not funded.
It is not uncommon for institutions to settle FCA allegations; these typically involve issues with effort reports, failures to disclose foreign support and, most recently, accusations related to cybersecurity violations in Department of Defense-funded research.
What sets this case apart is that it rests on allegations that Athira, based in Bothell, Wash., violated the FCA by “referencing Kawas’ falsified research in grant applications” and by “failing to report the misconduct allegations against Kawas to NIH it its award progress reports and to the HHS Office of Research Integrity (ORI) as required in annual reports and assurance,” according to the settlement the Department of Justice (DOJ) announced Jan. 6.[1]
These allegations related to Kawas’ “falsifying and manipulating images in her doctoral dissertation and published research papers,” it said.
As the relator in the FCA or qui tam suit, Mallon will receive $203,434. Of the $4,068,698 total, $2,034,349 is restitution to the government. Separately, Athira agreed to pay Mallon $58,500 for attorneys’ fees and related costs. The settlement is not an admission of wrongdoing by Athira.
Neither Mallon nor Athira responded to RRC’s requests for comment on the settlement. RRC also asked DOJ to explain why the payment was not larger; the FCA allows the government to collect three times the amount it contends was obtained fraudulently.
“Our resolution with Athira reflected both that its former CEO did not timely disclose information about her research misconduct as was required by law, but that the full board later disclosed that information after it learned of the misconduct and cooperated in the investigation,” Emily Langlie, communications director for the U.S. Attorney’s Office for the Western District of Washington, told RRC. “We believe that the settlement reached a just result based on our investigation and the unique facts of this case.”
Athira announced in October 2021 that Kawas had resigned, following a finding by its board of directors that she “altered images in her 2011 doctoral dissertation and in at least four research papers that she co-authored while a graduate student at WSU [Washington State University], published from 2011 to 2014.”[2]
It is not clear whether Kawas, who could not be reached for comment, is facing sanctions from the federal government or WSU.
According to its website, Kawas is co-founder and managing general partner of Propel Bio Partners, a venture capital firm. The only contact information listed on the website is a street address on Wilshire Blvd. in Los Angeles. No contact information appears on Kawas’ personal website.
Langlie said DOJ officials “cannot comment on whether there is any further investigation of Ms. Kawas.” Stephen Teller, Mallon’s attorney, told RRC he didn’t “have any reason to believe that DOJ is pursuing Kawas.”
However, Kawas is specifically mentioned in the agreement, which requires Athira to “cooperate fully and truthfully with the United States’ investigation of individuals and entities not released in this Agreement, including without limitation any investigation concerning Athira’s former Chief Executive Officer, Leen Kawas.”
WSU Misconduct Finding Pending?
Moreover, in a June 21, 2024, court document requesting permission to unseal the suit to Athira, DOJ said WSU’s investigation into allegations of “academic misconduct” by Kawas “recently reached an initial conclusion, though the government understands that Kawas intends to appeal the University’s findings and recommended discipline.”
The government added that it “has also continued to coordinate and discuss this matter with multiple governmental agencies and personnel,” and said the university’s action was among “other institutions” conducting their own investigations.
Universities commonly revoke dissertations found to contain fabrications or falsifications. Recipients of HHS funding are also required to report misconduct findings to ORI, which can impose a variety of sanctions if it makes its own finding.
ORI’s sanctions on investigators range from debarment to requiring supervisory plans should they work on HHS-supported projects in the future. It can also require that publications at issue be corrected or retracted.
Athira’s payment amount may also be related to its financial performance. It became a publicly traded firm on Sept. 18, 2020. At that time, the stock ranged from $20.42 to $16.70 per share. In September, Athira announced it was cutting its workforce by 70%, a reduction of 49 positions. As of Jan. 17, the share price was $.53. If it does not reach $1 for 10 consecutive days by April 14, Athira faces delisting on the NASDAQ, according to Investing.com.[3]
Mallon: Concerns Relayed Widely in 2016
Athira was founded on “WSU-licensed research to develop potential drug therapies for neurodegenerative diseases” and “raised more than $200 million in an initial public stock offering. The funding is intended to help pay for the continuing research and development for therapies for Alzheimer’s, dementia and other neurodegenerative diseases such as Parkinson’s and ALS or Lou Gehrig’s Disease,” WSU’s communications department reported two days after the company went public.[4]
After filing suit in 2021, Mallon hired Teller and submitted an amended complaint in March 2022; they are substantially the same.
As the 2022 complaint details, from April to July 2016, Mallon was a reviewer on an award proposal submitted by the firm when he “detected falsification and fabrication of the data, described and illustrated it, and relayed this fact to the NIH administrative offices, to the defendants and to the University of Washington, and their investors.”
The firm, at that time called M3 Biotechnology Inc., submitted a funding proposal to study a possible treatment for Alzheimer’s and age-related cognitive decline under an NIH small business technology transfer award program. It adopted the Athira name in April 2019.
Mallon’s complaint noted that while reviewing this proposal, he found problems with three papers for which Kawas was a co-author that were published from 2011 to 2014, which had been submitted in support of the funding application.
Athira Investigated Kawas in 2021
In addition to alerting NIH, WSU and the firm, Mallon also “was proactive in warning the Defendants in writing of the severe consequences and dangers of using false data,” the suit states.
He further argued that Athira officials “knew that the person or persons who generated the fabricated and falsified data were not honest” but included the data anyway in its 2019 funding application “after they were explicitly notified [by Mallon] of discrepancies in the data in 2016.”
As noted, Mallon did not file suit until June 2021, and the litigation was not made public until the settlement was announced last month. But his allegations to Athira prompted its investigation that led to Kawas’ resignation in October 2021.
“The Company and Dr. Kawas agreed it is in Athira’s best interest to enter this critical next chapter under new leadership. Dr. Kawas’s actions at Washington State University took place many years ago and did not involve ATH-1017, Athira’s lead development candidate,” Kelly A. Romano, Athira board chair, said in a statement at that time. “We thank Dr. Kawas for her unwavering focus seeking to make a meaningful difference for Alzheimer’s patients and their caregivers.”
Meanwhile, the government received five extensions related to the time it had to intervene in Mallon’s suit, citing, in one filing, the need to address the “detailed scientific matters” involved. In addition to an investigative team, DOJ said it hired a neurologist consultant to help assess Mallon’s claims of data manipulation and “review the relevant NIH grant proposals.”
DOJ issued a civil investigative demand to Athira in November 2022 related to the allegations but did not reveal Mallon’s suit against the firm until June of last year, as the case turned, with Mallon’s agreement, toward a settlement.
Feds Vow to Protect ‘Research Integrity’
In announcing the settlement, U.S. Attorney Tessa M. Gorman noted that “research into neurological disorders such as Alzheimer’s and Parkinson’s Disease is critical to growing numbers of patients in our community” and “must not be tainted by the misconduct highlighted in this case.”[5]
She said the firm “immediately notified NIH of the research misconduct after the full board of directors learned of it. The company’s transparency significantly helped Athira mitigate its damages and demonstrated its resolve towards coming into compliance with the relevant law and regulations.” However, as noted, Mallon and the settlement itself state the firm had been aware of many concerns years earlier—and that he also informed NIH.
In addition to DOJ, the HHS Office of Inspector General (OIG) was involved in investigating and resolving the case.
“The failure of Athira to properly disclose allegations of falsified and manipulated scientific images by its former CEO to the NIH undermines public trust in taxpayer-funded research,” said Steven J. Ryan, OIG special agent in charge. “This settlement demonstrates HHS-OIG’s commitment to protecting the integrity of federally funded research.”
1 Settlement agreement, United States of America et al v. Athira Pharma Inc., No. 2:21-cv-00853, (E.D. Wash., 2024), https://bit.ly/3PKznOX.
2 Athira Pharma, “Athira Pharma Announces Leadership Changes; Mark Litton, Ph.D., M.B.A. Named President and Chief Executive Officer; Rachel Lenington, M.B.A. Named Chief Operating Officer,” news release, October 21, 2021, https://bit.ly/42eVNiN.
3 Lina Guerrero, “Athira Pharma faces Nasdaq delisting over share price,” Investing.com, October 18, 2024, https://bit.ly/3PFzyek.
4 Communications staff, “WSU research behind potential game-changing Alzheimer’s drug,” WSU Insider, September 21, 2020, https://bit.ly/40tOame.
5 U.S. Department of Justice, Office of Public Affairs, “Athira Pharma Inc. Agrees to Pay $4M to Settle False Claims Act Allegations Related to Scientific Research Misconduct,” news release, January 6, 2025, https://bit.ly/3PEHfSb.
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