Quarterly Report (10-q)
November 03 2022 - 10:56AM
Edgar (US Regulatory)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended
September 30,
2022
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from
to
Commission File Number:
001-38112
ATHENEX, INC.
(Exact Name of Registrant as Specified in its Charter)
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Delaware
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43-1985966
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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1001 Main Street,
Suite 600
Buffalo,
NY
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14203
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(Address of principal executive offices)
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(Zip Code)
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(716)
427-2950
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the
Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $0.001 per share
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ATNX
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The Nasdaq Global Select Market
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Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes
☒ No ☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files).
Yes
☒ No ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, a
smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
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Large accelerated filer
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☐
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Accelerated filer
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☒
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Non-accelerated filer
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☐
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Smaller reporting company
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☒
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Emerging growth company
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☐
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If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act.
☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
☒
As of October 31, 2022, the registrant had
157,410,098
shares of common stock, $0.001 par value per share,
outstanding.
Table of Contents
i
PART I—FINANCIAL
INFORMATION
Item 1. Condensed Consolidated
Financial Statements.
ATHENEX, INC. AND SUBSIDIARIES
Condensed Consolidated
Balance Sheets
(unaudited)
(In thousands, except share and per share data)
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September 30,
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December 31,
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2022
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2021
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Assets
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Current assets:
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Cash and cash equivalents
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$
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35,187
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$
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35,202
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Restricted cash
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5,225
|
|
|
|
16,500
|
|
|
Short-term investments
|
|
|
1,034
|
|
|
|
10,207
|
|
|
Accounts receivable, net of chargebacks and other deductions of
$28,331 and
$22,868,
respectively, and provision for credit losses of
$9,678 and
$9,196,
respectively
|
|
|
32,912
|
|
|
|
26,286
|
|
|
Inventories
|
|
|
42,039
|
|
|
|
27,049
|
|
|
Prepaid expenses and other current assets
|
|
|
4,125
|
|
|
|
5,321
|
|
|
Discontinued operations, current portion
|
|
|
6,184
|
|
|
|
12,831
|
|
|
Total current assets
|
|
|
126,706
|
|
|
|
133,396
|
|
|
Property and equipment, net
|
|
|
3,912
|
|
|
|
5,181
|
|
|
Intangible assets, net
|
|
|
72,168
|
|
|
|
71,896
|
|
|
Operating lease right-of-use assets, net
|
|
|
4,439
|
|
|
|
5,509
|
|
|
Other assets
|
|
|
952
|
|
|
|
1,087
|
|
|
Discontinued operations, non-current portion
|
|
|
20,173
|
|
|
|
50,379
|
|
|
Total assets
|
|
$
|
228,350
|
|
|
$
|
267,448
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
25,071
|
|
|
$
|
14,519
|
|
|
Accrued expenses
|
|
|
40,083
|
|
|
|
23,892
|
|
|
Current portion of operating lease liabilities
|
|
|
2,026
|
|
|
|
2,393
|
|
|
Current portion of long-term debt and finance lease
obligations
|
|
|
14,927
|
|
|
|
46,096
|
|
|
Discontinued operations, current portion
|
|
|
2,796
|
|
|
|
9,147
|
|
|
Total current liabilities
|
|
|
84,903
|
|
|
|
96,047
|
|
|
Long-term liabilities:
|
|
|
|
|
|
|
|
Long-term operating lease liabilities
|
|
|
3,427
|
|
|
|
4,411
|
|
|
Long-term debt and finance lease obligations
|
|
|
22,251
|
|
|
|
95,607
|
|
|
Royalty financing liability
|
|
|
80,103
|
|
|
|
—
|
|
|
Deferred tax liabilities
|
|
|
1,751
|
|
|
|
1,751
|
|
|
Contingent consideration
|
|
|
18,937
|
|
|
|
24,076
|
|
|
Other long-term liabilities
|
|
|
2,709
|
|
|
|
3,046
|
|
|
Discontinued operations, non-current portion
|
|
|
7,033
|
|
|
|
8,058
|
|
|
Total liabilities
|
|
|
221,114
|
|
|
|
232,996
|
|
|
Commitments and contingencies (See Note
18)
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
Common stock, par value $0.001 per
share,
250,000,000 shares
authorized at September 30,
2022 and December 31, 2021;
159,108,639 and
111,802,968 shares
issued at September 30,
2022 and December 31, 2021, respectively;
157,410,098 and
110,130,048 shares
outstanding at September 30, 2022 and December
31, 2021, respectively
|
|
|
159
|
|
|
|
111
|
|
|
Additional paid-in capital
|
|
|
1,012,114
|
|
|
|
972,404
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
2,987
|
|
|
|
(487
|
)
|
|
Accumulated deficit
|
|
|
(982,658
|
)
|
|
|
(913,412
|
)
|
|
Less: treasury stock, at cost;
1,698,541 and
1,672,920 shares
at September 30, 2022 and
December 31, 2021, respectively
|
|
|
(7,757
|
)
|
|
|
(7,485
|
)
|
|
Total Athenex, Inc. stockholders' equity
|
|
|
24,845
|
|
|
|
51,131
|
|
|
Non-controlling interests
|
|
|
(17,609
|
)
|
|
|
(16,679
|
)
|
|
Total stockholders' equity
|
|
|
7,236
|
|
|
|
34,452
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
228,350
|
|
|
$
|
267,448
|
|
The accompanying notes are an integral part of these condensed
consolidated financial statements.
1
ATHENEX, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of
Operations and Comprehensive Loss
(unaudited)
(In thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product sales, net
|
|
$
|
31,349
|
|
|
$
|
26,303
|
|
|
$
|
85,503
|
|
|
$
|
65,184
|
|
|
License and other revenue
|
|
|
2,181
|
|
|
|
5,122
|
|
|
|
8,685
|
|
|
|
26,091
|
|
|
Total revenue
|
|
|
33,530
|
|
|
|
31,425
|
|
|
|
94,188
|
|
|
|
91,275
|
|
|
Cost of sales
|
|
|
27,736
|
|
|
|
25,098
|
|
|
|
73,657
|
|
|
|
59,255
|
|
|
Gross Profit
|
|
|
5,794
|
|
|
|
6,327
|
|
|
|
20,531
|
|
|
|
32,020
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
|
9,214
|
|
|
|
17,739
|
|
|
|
36,393
|
|
|
|
60,128
|
|
|
Selling, general, and administrative expenses
|
|
|
9,438
|
|
|
|
18,094
|
|
|
|
40,417
|
|
|
|
54,936
|
|
|
Total operating expenses
|
|
|
18,652
|
|
|
|
35,833
|
|
|
|
76,810
|
|
|
|
115,064
|
|
|
Operating loss
|
|
|
(12,858
|
)
|
|
|
(29,506
|
)
|
|
|
(56,279
|
)
|
|
|
(83,044
|
)
|
|
Interest income
|
|
|
109
|
|
|
|
38
|
|
|
|
231
|
|
|
|
99
|
|
|
Interest expense
|
|
|
6,271
|
|
|
|
5,100
|
|
|
|
15,089
|
|
|
|
15,619
|
|
|
Loss on partial extinguishment of debt
|
|
|
—
|
|
|
|
—
|
|
|
|
1,450
|
|
|
|
—
|
|
|
Loss before income tax expense
|
|
|
(19,020
|
)
|
|
|
(34,568
|
)
|
|
|
(72,587
|
)
|
|
|
(98,564
|
)
|
|
Income tax expense (benefit)
|
|
|
596
|
|
|
|
262
|
|
|
|
606
|
|
|
|
(10,619
|
)
|
|
Net loss from continuing operations
|
|
|
(19,616
|
)
|
|
|
(34,830
|
)
|
|
|
(73,193
|
)
|
|
|
(87,945
|
)
|
|
Loss (gain) from discontinued operations (Note 4)
|
|
|
254
|
|
|
|
1,906
|
|
|
|
(3,018
|
)
|
|
|
9,009
|
|
|
Net loss
|
|
|
(19,870
|
)
|
|
|
(36,736
|
)
|
|
|
(70,175
|
)
|
|
|
(96,954
|
)
|
|
Less: net loss attributable to non-controlling interests
|
|
|
(201
|
)
|
|
|
(679
|
)
|
|
|
(929
|
)
|
|
|
(1,573
|
)
|
|
Net loss attributable to Athenex, Inc.
|
|
$
|
(19,669
|
)
|
|
$
|
(36,057
|
)
|
|
$
|
(69,246
|
)
|
|
$
|
(95,381
|
)
|
|
Unrealized gain (loss) on investment, net of income
taxes
|
|
|
(94
|
)
|
|
|
5
|
|
|
|
376
|
|
|
|
2
|
|
|
Foreign currency translation adjustment, net of income
taxes
|
|
|
1,610
|
|
|
|
81
|
|
|
|
3,098
|
|
|
|
95
|
|
|
Comprehensive loss
|
|
$
|
(18,153
|
)
|
|
$
|
(35,971
|
)
|
|
$
|
(65,772
|
)
|
|
$
|
(95,284
|
)
|
|
Basic and diluted loss per Athenex, Inc. common share (Note
15):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from continuing operations
|
|
$
|
(0.14
|
)
|
|
$
|
(0.31
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(0.85
|
)
|
|
Net (loss) gain from discontinued operations
|
|
|
(0.00
|
)
|
|
|
(0.02
|
)
|
|
|
0.02
|
|
|
|
(0.09
|
)
|
|
Net loss per share attributable to Athenex, Inc. common
stockholders, basic and diluted (See Note
15)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.57
|
)
|
|
$
|
(0.93
|
)
|
|
Weighted-average shares used in computing net loss per share
attributable to Athenex, Inc. common
stockholders, basic
and diluted (See Note 15)
|
|
|
139,473,393
|
|
|
|
109,292,740
|
|
|
|
121,115,575
|
|
|
|
102,111,218
|
|
The accompanying notes are an integral part of these condensed
consolidated financial statements.
2
ATHENEX, INC. AND SUBSIDIARIES
Condensed Consolidated Statements
of Stockholders’ Deficit
(unaudited)
(In thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
|
Additional
|
|
|
|
|
|
Accumulated
other
|
|
|
Treasury Stock
|
|
|
Total
Athenex,
Inc.
|
|
|
Non-
|
|
|
Total
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
paid-in
capital
|
|
|
Accumulated
deficit
|
|
|
comprehensive
loss
|
|
|
Shares
|
|
|
Amount
|
|
|
stockholders'
equity
|
|
|
controlling
interests
|
|
|
stockholders'
equity
|
|
|
Balance at January 1, 2021
|
|
|
95,066,195
|
|
|
$
|
95
|
|
|
$
|
901,864
|
|
|
$
|
(713,644
|
)
|
|
$
|
(1,134
|
)
|
|
|
(1,672,920
|
)
|
|
$
|
(7,406
|
)
|
|
$
|
179,775
|
|
|
$
|
(14,427
|
)
|
|
$
|
165,348
|
|
|
Stock-based compensation cost
|
|
|
—
|
|
|
|
—
|
|
|
|
2,205
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,205
|
|
|
|
—
|
|
|
|
2,205
|
|
|
Restricted stock expense
|
|
|
—
|
|
|
|
—
|
|
|
|
29
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
29
|
|
|
|
—
|
|
|
|
29
|
|
|
Stock options exercised
|
|
|
119,425
|
|
|
|
—
|
|
|
|
852
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
852
|
|
|
|
—
|
|
|
|
852
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(25,050
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(25,050
|
)
|
|
|
(553
|
)
|
|
|
(25,603
|
)
|
|
Other comprehensive income, net of tax
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
293
|
|
|
|
—
|
|
|
|
—
|
|
|
|
293
|
|
|
|
—
|
|
|
|
293
|
|
|
Balance at March 31, 2021 (unaudited)
|
|
|
95,185,620
|
|
|
|
95
|
|
|
|
904,950
|
|
|
|
(738,694
|
)
|
|
|
(841
|
)
|
|
|
(1,672,920
|
)
|
|
|
(7,406
|
)
|
|
|
158,104
|
|
|
|
(14,980
|
)
|
|
|
143,124
|
|
|
Sale of common stock
|
|
|
33,373
|
|
|
|
—
|
|
|
|
133
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
133
|
|
|
|
—
|
|
|
|
133
|
|
|
Issuance of common stock in connection with acquisition of Kuur and
settlement of transaction incentive liability assumed
|
|
|
15,601,667
|
|
|
|
16
|
|
|
|
58,412
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
58,428
|
|
|
|
—
|
|
|
|
58,428
|
|
|
Stock-based compensation cost
|
|
|
—
|
|
|
|
—
|
|
|
|
2,387
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,387
|
|
|
|
—
|
|
|
|
2,387
|
|
|
Restricted stock expense
|
|
|
—
|
|
|
|
—
|
|
|
|
57
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
57
|
|
|
|
—
|
|
|
|
57
|
|
|
Stock options exercised
|
|
|
160,000
|
|
|
|
—
|
|
|
|
727
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
727
|
|
|
|
—
|
|
|
|
727
|
|
|
Treasury stock repurchase
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(79
|
)
|
|
|
(79
|
)
|
|
|
—
|
|
|
|
(79
|
)
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(34,274
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(34,274
|
)
|
|
|
(341
|
)
|
|
|
(34,615
|
)
|
|
Other comprehensive loss, net of tax
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(282
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(282
|
)
|
|
|
—
|
|
|
|
(282
|
)
|
|
Balance at June 30, 2021 (unaudited)
|
|
|
110,980,660
|
|
|
|
111
|
|
|
|
966,666
|
|
|
|
(772,968
|
)
|
|
|
(1,123
|
)
|
|
|
(1,672,920
|
)
|
|
|
(7,485
|
)
|
|
|
185,201
|
|
|
|
(15,321
|
)
|
|
|
169,880
|
|
|
Issuance of common stock in connection with Cidal
acquisition
|
|
|
11,299
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Stock-based compensation cost
|
|
|
—
|
|
|
|
—
|
|
|
|
2,450
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,450
|
|
|
|
—
|
|
|
|
2,450
|
|
|
Restricted stock expense
|
|
|
—
|
|
|
|
—
|
|
|
|
199
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
199
|
|
|
|
—
|
|
|
|
199
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(36,057
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(36,057
|
)
|
|
|
(679
|
)
|
|
|
(36,736
|
)
|
|
Other comprehensive income, net of tax
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
86
|
|
|
|
—
|
|
|
|
—
|
|
|
|
86
|
|
|
|
—
|
|
|
|
86
|
|
|
Balance at September 30, 2021 (unaudited)
|
|
|
110,991,959
|
|
|
$
|
111
|
|
|
$
|
969,315
|
|
|
$
|
(809,025
|
)
|
|
$
|
(1,037
|
)
|
|
|
(1,672,920
|
)
|
|
$
|
(7,485
|
)
|
|
$
|
151,879
|
|
|
$
|
(16,000
|
)
|
|
$
|
135,879
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
|
Additional
|
|
|
|
|
|
Accumulated
other
|
|
|
Treasury Stock
|
|
|
Total
Athenex,
Inc.
|
|
|
Non-
|
|
|
Total
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
paid-in
capital
|
|
|
Accumulated
deficit
|
|
|
comprehensive
(loss) income
|
|
|
Shares
|
|
|
Amount
|
|
|
stockholders'
equity
|
|
|
controlling
interests
|
|
|
stockholders'
equity (deficit)
|
|
|
Balance at January 1, 2022
|
|
|
111,802,968
|
|
|
$
|
111
|
|
|
$
|
972,404
|
|
|
$
|
(913,412
|
)
|
|
$
|
(487
|
)
|
|
|
(1,672,920
|
)
|
|
$
|
(7,485
|
)
|
|
$
|
51,131
|
|
|
$
|
(16,679
|
)
|
|
$
|
34,452
|
|
|
Sale of common stock through ATM, net of costs of
$52
|
|
|
1,646,026
|
|
|
|
2
|
|
|
|
1,693
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,695
|
|
|
|
—
|
|
|
|
1,695
|
|
|
Stock-based compensation cost
|
|
|
—
|
|
|
|
—
|
|
|
|
1,623
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,623
|
|
|
|
—
|
|
|
|
1,623
|
|
|
Restricted stock expense
|
|
|
—
|
|
|
|
—
|
|
|
|
251
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
251
|
|
|
|
—
|
|
|
|
251
|
|
|
Issuance of warrant
|
|
|
—
|
|
|
|
—
|
|
|
|
148
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
148
|
|
|
|
—
|
|
|
|
148
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(17,420
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(17,420
|
)
|
|
|
(512
|
)
|
|
|
(17,932
|
)
|
|
Other comprehensive income, net of tax
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
562
|
|
|
|
—
|
|
|
|
—
|
|
|
|
562
|
|
|
|
—
|
|
|
|
562
|
|
|
Balance at March 31, 2022 (unaudited)
|
|
|
113,448,994
|
|
|
|
113
|
|
|
|
976,119
|
|
|
|
(930,832
|
)
|
|
|