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, 2019.
“In the first quarter of 2019 we continued to make progress
across our all our technology platforms and business units as we
execute on our corporate strategy to build a global oncology
company delivering more effective, safer and tolerable treatments
for cancer patients,” stated Dr. Johnson Lau, Chief Executive
Officer and Chairman of Athenex. “Most notably, we recently
reported promising preliminary data from our ongoing pilot study of
Oraxol in angiosarcoma, which included three complete responses
from the first seven patients to receive at least six weeks of
Oraxol monotherapy, all of whom showed visible improvements in the
angiosarcoma lesions within one to two weeks. We believe the high
response rate and strong safety profile further support the
rationale that oral paclitaxel can potentially achieve a more
desirable pharmacokinetic profile and a better clinical outcome,
giving us greater confidence in our all of our Oraxol clinical
programs.”
Dr. Lau continued, “Having achieved target enrollment in our
Phase III trial of Oraxol in metastatic breast cancer we look
forward to announcing top line results in August. Preparations are
underway for regulatory filings for our partnered product KX2-391
in actinic keratosis. We are also working to build out our
commercial and manufacturing infrastructure and develop our
corporate brand in advance of anticipated proprietary product
launches. Finally, we have added to our Board of Directors with
four key appointments.”
“We have also strengthened our balance sheet, with a private
placement equity offering, completed on May 7, 2019, in which we
raised gross proceeds of $100 million. We are very grateful for the
support from the three leading healthcare investment firms who
participated in this transaction,” concluded Dr. Lau.
First Quarter 2019 and Recent Business
Highlights:
Clinical Programs:
- Presented positive Phase 3 data on KX2-391 in actinic keratosis
(AK) at the American Academy of Dermatology (AAD) annual meeting.
Both Phase 3 studies are nearing completion of the one-year
follow-up of patients who had complete responses and the final
top-line data will be discussed with the FDA at an upcoming pre-NDA
meeting.
- Oraxol Phase III studies in metastatic breast cancer: Achieved
target enrollment of more than 360 patients. Topline results are
expected to be available in August 2019.
- Announced Investigational New Drug (IND) allowance by China’s
National Medical Products Administration (NMPA) to begin
registrational related clinical studies in China of
TAEST16001 injection in patients with solid tumors
- TAEST16001 is a cancer immunotherapy product candidate based on
Athenex’s T-cell receptor Affinity Enhanced Specific T-cell (TAEST)
technology
- TEAST technology is being developed by Axis
Therapeutics, a joint venture between Athenex and Xiangxue
Life Sciences (XLifeSc)
- Reported promising clinical results from a clinical study of
Oraxol in cutaneous angiosarcoma. Preliminary data show rapid,
visible response to Oraxol monotherapy in the first seven subjects,
including three complete responses.
- Presented preclinical data on Oraxol in the treatment of
angiosarcoma at the American Association for Cancer Research (AACR)
annual meeting on April 3, 2019
- Announced acceptance of four abstracts for presentation at the
2019 American Society of Clinical Oncology (ASCO) annual meeting.
Abstract topics include:
- Oraxol program in metastatic breast cancer, including
information about ongoing Phase III trial and about Phase II trial
in Taiwan (two abstracts)
- Preliminary results from Oratecan Phase I study
- Preclinical proof of concept data on Arginine Deprivation
Therapy platform
Corporate Announcements:
- Appointed new members to the Board of Directors:
- John Moore Vierling, MD, FACP, FAASLD, AGAF, tenured Professor
of Medicine and Surgery at the Baylor College of Medicine
- Stephanie Davis, Senior Client Partner at Korn Ferry
- Jordan S. Kanfer, Managing Director, Convertible and Equity
Research at Opti Capital Management
- John Koh, an independent director of NSL Ltd.; Mapletree
Industrial Trust, a Singapore listed REIT; Kris Energy; and Aurora
Mobile Limited (JG)
Commercial Business:
- Athenex Pharmaceutical Division (“APD”) currently markets a
total of 29 products with 54 SKUs
- Athenex Pharma Solutions (“APS”) currently markets 6 products
in total with 16 SKUs
Financial Results for the First Quarter Ended March 31,
2019Athenex is on track to achieve its revenue guidance on
products sales issued in March 2019. Product sales for the three
months ended March 31, 2019 were $25.2 million, compared with $12.6
million for the three months ended March 31, 2018, an increase of
$12.6 million or approximately 100%. The increase was attributable
to a $6.0 million increase in specialty product sales, a $5.0
million increase in 503B product sales driven significantly by
Vasopressin, and a $2.1 million increase in API product sales.
Total revenue for the three months ended March 31, 2019 was
$25.3 million, a decrease of $12.5 million, or 33%, as compared to
$37.8 million for the three months ended March 31, 2018. The
decrease was primarily due to a decrease in licensing revenue of
$25.0 million. This decrease was offset by the increases in product
sales described above.
Cost of sales for the three months ended March 31, 2019 totaled
$19.9 million, an increase of $8.6 million, or 76%, as compared to
$11.3 million for the three months ended March 31, 2018. This was
primarily due to the increase of $6.2 million cost of sales from
the specialty products and $2.4 million cost of sales from 503B and
API products. The decrease in gross profit and gross margin was
primarily due to the absence of licensing revenue in the interim
period.
Research and development expenses for the three months ended
March 31, 2019 were $24.5 million as compared to $21.3 million for
the three months ended March 31, 2018. This was primarily due to an
increase in licensing fees and preclinical development
activities.
Selling, general and administrative expenses for the three
months ended March 31, 2019 were $15.2 million as compared to $13.1
million for the three months ended March 31, 2018. This was
primarily due to an increase of $2.6 million related to the
pre-launch costs of the Company’s proprietary drugs, offset by a
decrease of $0.5 million in general administrative expenses.
Net loss attributable to Athenex for the three months ended
March 31, 2019 was $35.2 million, or $0.53 per diluted share,
compared to a net loss of $7.3 million, or $0.12 per diluted share,
in the same period last year.
At March 31, 2019, the Company had cash, cash equivalents and
short-term investments aggregating $71.3 million, compared to
$107.4 million at December 31, 2018. Based on the current operating
plan, the Company expects that its cash, cash equivalents and
short-term investments as of March 31, 2019, together with proceeds
it has recently raised from the private placement and cash to be
generated from operating activities, will enable it to fund its
operating expenses and capital expenditure requirements through at
least the next twelve months.
On May 7, 2019, the Company closed a private placement agreement
in which it issued 10 million shares of common stock to three
institutional investors (Perceptive Advisors, Avoro Capital
Advisors (formerly known as venBio Select Advisor) and OrbiMed) at
a purchase price of $10.00 per share, for aggregate gross proceeds
of $100 million to Athenex, before deducting offering expenses.
Outlook and Upcoming Milestones:
- Presentations at the 2019 American Society of Clinical Oncology
(ASCO) annual meeting
- Expect to file an IND for Pegtomarginase by mid-2019
- Top line results from Phase 3 trial of Oraxol in metastatic
breast cancer, August 2019
- Expect to conduct a pre-IND meeting with the U.S. FDA for
TAEST16001 injection product under the TCR-T immunotherapy
program
Financial Guidance:The company provides revenue
guidance for product sales only. The revenue guidance excludes
license and collaboration fees. Athenex reaffirms the product sales
guidance issued in March 2019. Athenex is forecasting that product
sales in 2019 will increase by between 25% and 30% year-over-year
from $56.4 million in 2018.
Conference Call and Webcast Information:The
Company will host a conference call and live audio webcast today,
Thursday, May 9, 2019, at 8:00am Eastern Time to discuss the
financial results and provide a business update.
To participate in the call, dial 877-407-0784 (domestic) or
201-689-8560 (international) fifteen minutes before the conference
call begins and reference the conference passcode 13689379.
The live conference call and replay can also be accessed via audio
webcast at https://edge.media-server.com/m6/p/ohu4cnks and on the
Investor Relations section of the Company’s website, located at
http://ir.athenex.com/, under “Events and Presentations.”
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 non-absorbed 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; and multiple
locations in Chongqing, China. 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,” “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; competition;
intellectual property risks; risks relating to doing business in
China; 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, LLCTel: +1 716-427-2952Direct: +1
212-915-2564
Athenex, Inc.:Randoll SzeChief Financial OfficerEmail:
randollsze@athenex.com
Jacqueline LiCorporate Development and Investor RelationsEmail:
jacquelineli@athenex.com
|
Athenex,
Inc. & Subsidiaries |
Condensed
Consolidated Balance Sheets |
|
|
March
31, |
|
December
31, |
|
|
2019 |
|
|
|
2018 |
|
|
|
Balance sheet data: |
(in
thousands) |
Cash, cash equivalents |
$ |
71,003 |
|
|
$ |
49,794 |
|
Short-term investments |
|
341 |
|
|
|
57,629 |
|
Goodwill |
|
37,589 |
|
|
|
37,495 |
|
Working capital |
|
82,933 |
|
|
|
119,143 |
|
Total assets |
|
220,307 |
|
|
|
231,095 |
|
Long-term debt |
|
47,732 |
|
|
|
46,764 |
|
Total liabilities |
|
124,726 |
|
|
|
102,326 |
|
Non-controlling interests |
|
(11,583 |
) |
|
|
(10,586 |
) |
Total stockholders' equity |
$ |
95,581 |
|
|
$ |
128,769 |
|
|
|
|
|
|
|
|
|
|
Athenex,
Inc. & Subsidiaries |
Condensed
Consolidated Statement of Operations |
|
|
Three Months Ended March 31, |
|
|
2019 |
|
|
|
2018 |
|
|
(in
thousands) |
|
(in
thousands) |
Revenue |
|
|
|
Product sales, net |
$ |
25,163 |
|
|
$ |
12,605 |
|
License fees and consulting revenue |
|
105 |
|
|
|
25,091 |
|
Grant revenue |
|
39 |
|
|
|
140 |
|
Total revenue |
|
25,307 |
|
|
|
37,836 |
|
Cost of sales |
|
(19,902 |
) |
|
|
(11,326 |
) |
Gross profit |
|
5,405 |
|
|
|
26,510 |
|
Research and development expenses |
|
(24,475 |
) |
|
|
(21,303 |
) |
Selling, general, and administrative expenses |
|
(15,188 |
) |
|
|
(13,080 |
) |
Interest (expense) income |
|
(1,472 |
) |
|
|
227 |
|
Income tax (expense) benefit |
|
(500 |
) |
|
|
307 |
|
Net loss |
|
(36,230 |
) |
|
|
(7,339 |
) |
Less: net loss attributable to non-controlling
interests |
|
(997 |
) |
|
|
(41 |
) |
Net loss attributable to Athenex, Inc. |
$ |
(35,233 |
) |
|
$ |
(7,298 |
) |
|
|
|
|
|
|
|
|
|
Athenex, Inc. & Subsidiaries |
Condensed Consolidated Statement of Cash
Flows |
|
|
Three Months Ended March 31, |
|
|
2019 |
|
|
|
2018 |
|
|
|
|
(in thousands) |
Net cash (used in) operating activities |
$ |
(32,971 |
) |
|
$ |
(12,726 |
) |
Net cash provided by investing activities |
|
52,198 |
|
|
|
(56,800 |
) |
Net cash provided by financing activities |
|
976 |
|
|
|
68,981 |
|
Net effect of foreign exchange rate changes |
|
1,006 |
|
|
|
478 |
|
Net increase (decrease) in cash and cash
equivalents |
|
21,209 |
|
|
|
(67 |
) |
Cash and cash equivalents at
beginning of period |
|
49,794 |
|
|
|
39,284 |
|
Cash and cash equivalents at
end of period |
$ |
71,003 |
|
|
$ |
39,217 |
|
|
|
|
|
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