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Athenex Plant Nearly Complete

JOHNSON LAU

Dunkirk’s new Athenex facility is nearing completion as company officials continue pushing for federal approval for its new breast cancer treatment.

Athenex has yet to meet with the federal government to address a FDA complete response letter that slowed approval of the company’s new breast cancer treatment. The FDA’s decision in February dealt a hit to Athenex’ stock prices as well as to the company’s bottom line.

Still, company officials are moving full steam ahead with Athenex’ Dunkirk facility, according to Jeff Yordon, Athenex chief operating officer, who spoke during a recent conference call with investor analysts.

“Construction of our facility in Dunkirk, New York, is nearly complete,” Yordon said. “The facility will serve the commercial needs for our specialty pharmaceutical business. Beginning in the fourth quarter of this year, we plan to commence manufacturing of 503B products in a portion of that facility. The equipment for this expansion of our APS business is already in Dunkirk and we are now working to hire a team to operate the equipment.”

FDA APPROVALS

Johnson Lau, Athenex chief executive officer, said during the conference call with investors that the company is working to conserve cash while it works with the federal Food and Drug Administration on approval for oral paclitaxel. Lau said Athenex plans to request a Type A meeting with federal Food and Drug Administration officials before the end of May and for the FDA to schedule the meeting within another 30 days. The meeting is taking longer to set up than was originally discussed by company officials in February, though company officials haven’t changed their plans for a meeting during the second quarter of the fiscal year, which ends June 30.

Dr. Rudolf Kwan, Athenex chief medical officer, said Athenex officials have spent the past several weeks working on their response to the FDA complete response letter, including additional analysis and collecting additional data. Athenex has engaged several advisors and consultants, including regulatory and biostatics advisors as part of their work to finalize the meeting request submission package.

“In a type A meeting, we hope to better understand the agency’s concerns expressed in the complete response letter as well as to align with the agency on the optimal pathway forward required to obtain for approval,” Lau said. “We continue to believe both that oral paclitaxel demonstrates that a very strong clinical profile and then it offers superior efficacy and safety compared with IV paclitaxel. If approved, we intend to position it as a chemotherapy of choice in metastatic breast cancer.”

In the meantime, Athenex is still advancing oral paclitaxel programs, including cutaneous angiosarcoma and oral paclitaxel in combination with pembrolizumab and the I-SPY2 program where oral paclitaxel is being studied in combination with GSKs Dostarlimab for neoadjuvant treatment in breast cancer. Work on a cutaneous angiosarcoma program continues to progress, Kwan said, as Athenex works to treat several types of cancers.

“Oral paclitaxel has received orphan drug designation for )cutaneous angiosarcoma) indication and we plan to request a meetingwith the FDA to discuss the regulatory path forward,” Kwan said. “We will provide an update on the discussion when regulatory clarity becomes available. The dose finding portion of our Phase I combination trial of oral paclitaxel in combination with pembrolizumab is complete. The clinical trial varies oral paclitaxel plus pembrolizumab in advanced solid tumors. We expect to present those finding data later this year. We are currently proceeding into the expansion phase of the study for a cohorts of lung cancer patients with plans to expand into a second cohort of gastric cancer patients.”

COMPANY FINANCIALS

Financially, the company saw revenue increase to $20.4 million for the three months ended March 31, 2021, from $18.5 million for the three months ended March 31, 2020, an increase of $1.8 million or 10%. Athenex’ net loss for the three months ended March 31, 2021, was $25.1 million (27 cents per diluted share) compared to a net loss of $19.4 million (24 cents per diluted share) for the same period in 2020.

As of March 31, 2021, Athenex had cash and cash equivalents of $48 million, restricted cash of $16.5 million, and short-term investments of $123.2 million.

“Considering these various adjustments and based on our current operating plan, we now expect our cash and cash equivalent canfund our current operation into the second half of 2022,” said Randoll Sze, chief financial officer. “In terms of product salesguidance, the company is limiting financial guidance to only the existing productportfolio, which excludes any proprietary products until meaningful sales data from theproprietary product, Klisyri, become available.”

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