After a stock plunge in 2021 following a key FDA rejection, cancer biotech Athenex crashed into penny stock territory this year and is now looking to sell a piece of itself to make some cash.
The company has agreed to sell off all its equity interests in its China subsidiaries, which are primarily engaged in API manufacturing, to TiHe Capital (Beijing).
The estimated $19 million deal will see Athenex receive at least 70% of the proceeds at closing, and the proceeds will be used to pay down the existing debt and for general operations, the company said. However, Athenex and TiHe also plan to enter into a long-term supply agreement for the manufacture and supply of certain APIs but were mum on the details.
The deal is subject to customary closing conditions, including obtaining certain regulatory approvals in China.
“Following the sale of our Dunkirk facility, as well as the sale of our US and European tirbanibulin royalty and milestone interests [for $85 million]the Athenex team continues to execute on our strategy to monetize our non-core assets, bolster our balance sheet, extend our cash runway and focus on our potential best-in-class NKT cell therapy program,” said Athenex CEO Johnson Lau in a statement.
This sell-off comes as the Buffalo, NY-based biotech has been facing several issues over the past few years. In 2019, the firm’s API facility in Chongqing, China had voluntarily suspended production activities, which had come amidst other accidents at chemical plants earlier that year in certain provinces of China that led to industry-wide plant inspections focused on product safety.
Earlier this year, after the FDA issued a surprise CRL for its potential breast cancer treatment, the company brought out the ax and removed drugs in its pipeline while letting go of an unidentified number of staffers as the company eliminated its oral drug discovery program apart from oral paclitaxel.
The company also paid $70 million upfront to Kuur Therapeutics after the company showed positive results from a small number of patients treated with their CAR-NKT cell therapies developed along with the Baylor College of Medicine.
However, none of these moves have soothed investors as Athenex’s stock $ATNX is trading just above 50 cents a share and is facing a 66% drop since January.