Athenex, Inc. (NASDAQ: ATNX), a global biopharmaceutical company
dedicated to the discovery, development and commercialization of
novel therapies for the treatment of cancer and related conditions,
today announced its financial results and business highlights for
the first quarter ended March 31, 2020.
“We successfully advanced our two lead product candidates
towards regulatory submission. The regulatory applications for
tirbanibulin have been filed and accepted in both the U.S. and
E.U., and the NDA for Oral Paclitaxel is on track to be submitted
soon,” stated Dr. Johnson Lau, Chairman and Chief Executive Officer
of Athenex. “Both products have strong clinical data packages, a
reflection of the very capable execution by our R&D and
clinical teams. The commercial launches of these products, if
approved, will be transformative for Athenex.”
“We are continuing with our pre-commercial activities for Oral
Paclitaxel, many of which can be completed virtually, to ensure we
are well positioned for commercial launch,” continued Dr. Lau. “Our
team remains committed to advancing our innovative medicines,
particularly Oral Paclitaxel, which we believe could be very
valuable for both patients and physicians in the current
environment. Our operational plans remain on track. We will
continue to operate in this evolving situation with the COVID-19
pandemic and will make adjustments as necessary to ensure business
continuity.”
First Quarter 2020 and Recent Business
Highlights:
Clinical Programs:
Tirbanibulin ointment for actinic keratosis (AK)
- A New Drug Application (NDA) for tirbanibulin ointment for
actinic keratosis was filed with the U.S. Food and Drug
Administration (FDA), and the Prescription Drug User Fee Act
(PDUFA) target action date has been set as December 30, 2020.
Additionally, the FDA has communicated that it is not
currently planning on holding an advisory committee to discuss the
application.
- A Marketing Authorization Application (MAA) has been submitted
to the European Medicines Agency (EMA) by our partner Almirall and
validated.
Oral Paclitaxel for Metastatic Breast Cancer
- The Company participated in a constructive meeting with the
FDA, as scheduled, to discuss the clinical section of the NDA for
Oral Paclitaxel for the treatment of metastatic breast cancer, and
is on track to submit the NDA.
Commercial Business:
- Athenex Pharmaceutical Division (APD) currently markets a total
of 32 products with 59 SKUs.
- Athenex Pharma Solutions (APS) currently markets 5 products
with 17 SKUs.
- Goal is to launch 7 products in 2020, including a major 503B
product.
Financial Results for the First Quarter Ended March 31,
2020
Revenue from product sales were $18.5 million, a decrease of
$6.6 million or 26% for the three months ended March 31, 2020, from
$25.2 million for the three months ended March 31, 2019. This
decrease was primarily attributable to a decrease in API and 503B
product sales of $3.8 million and $3.4 million, respectively, due
to the suspension of the Company’s API plant and the discontinued
vasopressin sales. These decreases were partially offset by an
increase in specialty product revenue of $0.9 million with the
launch and sales of two new products.
The Company recognized $28.3 million in license revenue for the
three months ended March 31, 2020, pursuant to the license
agreement entered into with Xiangxue in December 2019.
Cost of sales for the three months ended March 31, 2020 totaled
$19.6 million, a decrease of $0.3 million, or 2%, as compared to
$19.9 million for the three months ended March 31, 2019. The
Company continued to incur fixed costs at the API plant and APS
facility despite decreased production at these locations.
Research and development expenses for the three months ended
March 31, 2020 totaled $17.2 million, a decrease of $7.3 million,
or 30%, as compared to $24.5 million for the three months ended
March 31, 2019. This was primarily due to a decrease in licensing
fees and costs attributable to preclinical and clinical operations.
The decrease in these R&D expenses was partially offset by an
increase of $1.3 million in compensation expense and regulatory
costs in connection with our NDA preparations.
SG&A expenses for the three months ended March 31, 2020
totaled $25.7 million, an increase of $10.5 million, or 70%, as
compared to $15.2 million for the three months ended March 31,
2019. This was primarily due to an increase of $7.6 million related
to the costs of preparing to commercialize our proprietary drugs,
if approved, and an increase of $2.9 million of general
administrative expense, including professional service fees and
other operating expenses.
As a result of the foregoing, operating loss for the three
months ended March 31, 2020 was $15.6 million, compared to $34.3
million in the same period last year.
Net loss attributable to Athenex for the three months ended
March 31, 2020 was $19.4 million, or ($0.24) per diluted share,
compared to a net loss of $35.2 million, or ($0.53) per diluted
share, in the same period last year. Net loss attributable to
Athenex for the three months ended March 31, 2020 was impacted by
foreign tax withholding in relation to license revenue recognized
in the period.
At March 31, 2020, the Company had cash, cash equivalents and
short-term investments of $113.7 million, which included $8.7
million funded by New York State for the construction of the
Dunkirk facility for which the Company has recorded a corresponding
liability, compared to cash, cash equivalents and short-term
investments of $160.8 million at December 31, 2019. The March 31,
2020 balance did not include the $30 million payment the Company is
due to receive from Xiangxue Pharmaceutical, as part of our
expanded partnership under the license agreement entered into in
December 2019. Based on the current operating plan, we expect
that our cash, cash equivalents and short-term investments as of
March 31, 2020, together with cash to be generated from our
operating activities, including the license payment from our China
partner, Xiangxue Pharmaceutical, will enable us to fund our
operations into the first quarter of 2021.
Outlook and Upcoming Milestones:
- An abstract for the ongoing Phase 2 study of Oral Paclitaxel in
angiosarcoma has been accepted for presentation in a poster
discussion session at the American Society of Clinical Oncology’s
(ASCO) upcoming ASCO20 Virtual Scientific Program, which will be
held from May 29 to May 31, 2020.
- FDA acceptance of the NDA for Oral Paclitaxel for metastatic
breast cancer.
- PDUFA date of December 30, 2020 for tirbanibulin ointment
for actinic keratosis.
Financial Guidance:
The Company expects 2020 year-over-year product sales growth to
be in the mid-single digits, from $80.5 million reported
in 2019. The product sales guidance for 2020 has taken into account
the discontinuation of vasopressin sales and the suspension of
operations at the Taihao API plant in 2019, which had meaningful
contributions in 2019. In light of the current COVID-19 pandemic,
the Company has sold and may continue to sell products that are
used to treat COVID-19 patients. The Company currently does not
view these revenues as recurring in nature and will provide an
update at the appropriate time.
Conference Call and Webcast Information:
The Company will host a conference call and live audio webcast
today, Thursday, May 7, 2020, at 8:00am Eastern Time to discuss the
financial results and provide a business update.
To participate in the call, dial 800-479-1004 (domestic) or
929-477-0324 (international) fifteen minutes before the conference
call begins and reference the conference passcode 7976288.
The live conference call and replay can also be accessed via audio
webcast here http://public.viavid.com/index.php?id=139326 and on
the Investor Relations section of the Company’s website, located at
http://ir.athenex.com/.
About Athenex, Inc.Founded in 2003, Athenex,
Inc. is a global clinical stage biopharmaceutical company dedicated
to becoming a leader in the discovery, development and
commercialization of next generation drugs for the treatment of
cancer. Athenex is organized around three platforms, including an
Oncology Innovation Platform, a Commercial Platform and a Global
Supply Chain Platform. The Company’s current clinical pipeline is
derived from four different platform technologies: (1) Orascovery,
based on P-glycoprotein inhibitor, (2) Src kinase inhibition, (3)
T-cell receptor-engineered T-cells (TCR-T), and (4) Arginine
deprivation therapy. Athenex’s employees worldwide are dedicated to
improving the lives of cancer patients by creating more active and
tolerable treatments. Athenex has offices in Buffalo and
Clarence, New York; Cranford, New Jersey; Houston, Texas; Chicago,
Illinois; Hong Kong; Taipei, Taiwan; multiple locations in
Chongqing, China; Manchester, UK; Guatemala City, Guatemala and
Buenos Aires, Argentina. For more information, please visit
www.athenex.com.
Forward-Looking StatementsExcept for historical
information, all of the statements, expectations, and assumptions
contained in this press release are forward-looking statements.
These forward-looking statements are typically identified by terms
such as “anticipate,” “believe,” “continue,” “could,” “estimate,”
“expect,” “foresee,” “goal,” “guidance,” “intend,” “likely,” “may,”
“plan,” “potential,” “predict,” “preliminary,” “probable,”
“project,” “promising,” “seek,” “should,” “will,” “would,” and
similar expressions. Actual results might differ materially from
those explicit or implicit in the forward-looking statements.
Important factors that could cause actual results to differ
materially include: the development stage of our primary clinical
candidates and related risks involved in drug development, clinical
trials, regulation, manufacturing and commercialization; our
reliance on third parties for success in certain areas of Athenex’s
business; our history of operating losses and need to raise
additional capital to continue as a going concern; risks and
uncertainties related to the COVID-19 pandemic and its potential
impact on our operations, cash flow and financial condition; our
ability to integrate CIDAL’s assets into our existing operations;
competition; intellectual property risks; risks relating to doing
business internationally and in China; the uncertainty of when, if
at all, we will be able to resume full API production operations in
Chongqing; and the other risk factors set forth from time to time
in our SEC filings, copies of which are available for free in the
Investor Relations section of our website at
http://ir.athenex.com/phoenix.zhtml?c=254495&p=irol-sec
or upon request from our Investor Relations Department. All
information provided in this release is as of the date hereof and
we assume no obligation and do not intend to update these
forward-looking statements, except as required by law.
CONTACTSInvestor Relations:Tim McCarthyManaging
Director, LifeSci Advisors, LLCDirect: 212-915-2564
Athenex, Inc.:Randoll SzeChief Financial OfficerEmail:
RandollSze@athenex.com
Jacqueline LiCorporate Development and Investor RelationsEmail:
JacquelineLi@athenex.com
ATHENEX, INC. AND
SUBSIDIARIESCondensed Consolidated Balance
Sheets(unaudited)(In
thousands)
| |
|
March 31, |
|
December 31, |
| |
|
2020 |
|
2019 |
| Balance sheet
data: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
71,983 |
|
|
$ |
127,674 |
|
| Short-term investments |
|
|
41,721 |
|
|
|
33,139 |
|
| Goodwill |
|
|
38,480 |
|
|
|
38,513 |
|
| Working capital* |
|
|
141,104 |
|
|
|
159,398 |
|
| Total assets |
|
|
297,787 |
|
|
|
309,932 |
|
| Long-term debt |
|
|
53,767 |
|
|
|
53,246 |
|
| Total liabilities |
|
|
139,551 |
|
|
|
134,077 |
|
| Non-controlling interests |
|
|
(12,659 |
) |
|
|
(12,370 |
) |
| Total stockholders'
equity |
|
$ |
158,236 |
|
|
$ |
175,855 |
|
* working capital: total current assets less total current
liabilities.
ATHENEX, INC. AND
SUBSIDIARIESCondensed Consolidated Statements of
Operations and Comprehensive
Loss(unaudited)(In thousands,
except share and per share data)
| |
|
Three Months Ended March 31, |
| |
|
2020 |
|
2019 |
| |
|
(in thousands) |
|
(in thousands) |
| Revenue |
|
|
|
|
|
Product sales, net |
|
$ |
18,547 |
|
|
$ |
25,163 |
|
|
License fees and other revenue |
|
|
28,388 |
|
|
|
144 |
|
|
Total revenue |
|
|
46,935 |
|
|
|
25,307 |
|
| Cost of sales |
|
|
(19,572 |
) |
|
|
(19,902 |
) |
| Research and development
expenses |
|
|
(17,192 |
) |
|
|
(24,475 |
) |
| Selling, general, and
administrative expenses |
|
|
(25,748 |
) |
|
|
(15,188 |
) |
| Interest income |
|
|
413 |
|
|
|
283 |
|
| Interest expense |
|
|
(1,673 |
) |
|
|
(1,755 |
) |
| Income tax expense |
|
|
(2,881 |
) |
|
|
(500 |
) |
| Net loss |
|
|
(19,718 |
) |
|
|
(36,230 |
) |
| Less: net loss attributable to
non-controlling interests |
|
|
(289 |
) |
|
|
(997 |
) |
| Net loss attributable to
Athenex, Inc. |
|
$ |
(19,429 |
) |
|
$ |
(35,233 |
) |
| Net loss per share
attributable to Athenex, Inc. common stockholders, basic and
diluted |
|
$ |
(0.24 |
) |
|
$ |
(0.53 |
) |
| Weighted-average shares used
in computing net loss per share attributable to Athenex,
Inc. common stockholders, basic and diluted |
|
|
81,539,548 |
|
|
|
67,011,432 |
|
ATHENEX, INC. AND
SUBSIDIARIESCondensed Consolidated Statements of
Cash Flows(unaudited)(In
thousands)
| |
|
Three Months Ended March 31, |
| |
|
2020 |
|
2019 |
| |
|
|
| |
|
(in thousands) |
|
Net cash used in operating activities |
|
$ |
(45,545 |
) |
|
$ |
(32,971 |
) |
| Net cash (used in) provided by
investing activities |
|
|
(10,451 |
) |
|
|
52,198 |
|
| Net cash provided by financing
activities |
|
|
732 |
|
|
|
976 |
|
| Net effect of foreign exchange
rate changes |
|
|
(427 |
) |
|
|
1,006 |
|
| Net (decrease) increase in cash
and cash equivalents |
|
|
(55,691 |
) |
|
|
21,209 |
|
| Cash and cash equivalents, at
beginning of period |
|
|
127,674 |
|
|
|
49,794 |
|
| Cash and cash equivalents, at end
of period |
|
$ |
71,983 |
|
|
$ |
71,003 |
|
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