Athenex has run out of road. With programs stumbling and cash running out, the drug developer has filed for bankruptcy and begun seeking buyers for its three businesses.
New York-based Athenex has been on the ropes since the FDA rejected an application for approval of its oral chemotherapy candidate early in 2021. By the end of that year, the company had given up on trying to get the paclitaxel formulation to market in the U.S., leading to layoffs and a narrowed focus on cell therapies in March 2022. The pivot hit a snag earlier this year when a death triggered a clinical hold.
Against that backdrop, the asset management company Oaktree has accused Athenex of falling behind on loan repayments, raising the risk of a recall request that would wipe out the drug developer. The list of challenges has led to a filing for Chapter 11 bankruptcy protection.
In a statement, Athenex CEO Johnson Lau, M.D., attributed the bankruptcy filing to the “significant regulatory setback” of the oral paclitaxel rejection, “coupled with challenging biotech markets and the difficult economic environment.” The combination of factors “put tremendous pressure on our ability to continue to fund our businesses,” Lau said, and led to the bankruptcy filing.
Athenex submitted the bankruptcy paperwork after reaching an agreement with its lenders to “move forward with an expedited sales process.” The process will seek buyers for three businesses: Athenex Pharmaceutical Division (APD), Orascovery and Cell Therapy.
A potential stalking horse bidder for APD, which would establish a bottom-end bidding bar for the unit, is in place (PDF), reflecting the fact that Athenex began shopping that business to potential buyers in 2021. The company sells generic injectable products.
The sales processes for Orascovery and the cell therapy unit are at earlier stages. Orascovery develops small-molecule oral chemotherapy agents, including the rejected paclitaxel prospect. The cell therapy unit, which Athenex built through its 2021 Kuur Therapeutics buyout, is developing CAR-natural killer T-cell therapies, including the anti-GD2 candidate that the FDA placed on clinical hold earlier this year.