U.S. company Athira Pharma Inc. has agreed to pay $4.07 million to settle allegations that it used its former CEO’s falsified research to secure a federal grant in 2019.
The pharmaceutical company was accused of violating the False Claims Act (FCA) by failing to disclose research misconduct allegations in grant applications and progress reports submitted to the National Institutes of Health (NIH) and the Department of Health and Human Services (HHS) Office of Research Integrity.
The allegations arose from claims that Athira’s former CEO, Leen Kawas, falsified and manipulated scientific images in her doctoral dissertation and published research papers, which were cited in multiple NIH grant applications, including one that resulted in a 2019 award. Authorities allege that between January 2016 and June 2021, Athira did not disclose these allegations to NIH or the HHS Office of Research Integrity as required by law.
“The research into neurological disorders such as Alzheimer’s and Parkinson’s Disease is critical to growing numbers of patients in our community,” said U.S. Attorney Tessa M. Gorman for the Western District of Washington in a Justice Department statement. “That research must not be tainted by the misconduct highlighted in this case.”
Athira reportedly notified NIH of the misconduct as soon as its board of directors became aware, a step the Justice Department acknowledged helped the company mitigate damages.
The settlement also resolves claims brought under the FCA’s whistleblower provisions by Andrew P. Mallon, Ph.D., who will receive $203,434 from the settlement. Under the FCA’s qui tam provisions, private individuals can file lawsuits on behalf of the U.S. government and receive a share of any recovery.
Athira briefly addressed the settlement on Tuesday in its Third Quarter 2024 Financial Results, noting that a “legal expense of $4.1 million was accrued” in connection with the U.S. Department of Justice investigative demand.
