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Athenex unloads stake in Chinese API production business for $19M to bolster its financials

Struggling biotech Athenex unloaded all of its equity interests in its Chinese subsidiaries that produce APIs as part of a $19 million deal with TiHe Capital of Beijing.

Under terms of the deal, Athenex will get at least 70% of the funds at closing, pending regulatory approvals, which will be used to pay down debt and to fund general operations, the company said. Athenex said it will also ink a deal with TiHe for a long-term supply agreement for the manufacture and supply of certain APIs, though specific details weren’t disclosed.

“Following the sale of our Dunkirk facility, as well as the sale of our U.S. and European tirbanibulin royalty and milestone interests, the Athenex team continues to execute on our strategy to monetize our non-core assets, bolster our balance sheet, extend our cash runway, and focus on our potential best-in-class NKT cell therapy program,” Johnson Lau, M.D., Athenex’s chief executive, said in a statement.

The Buffalo, New York-based biotech, which makes FDA- and EU-approved Klisyri for scaly skin patches, took a deep dive into cell therapies just over a year ago with the $70 million upfront acquisition of CAR-NKT-focused Kuur Therapeutics. That move came in the wake of Athenex getting hit with a surprise complete response letter from the FDA in March 2021 for its potential breast cancer treatment that resulted in the company refocusing its mission to cell therapies.

Still, the company continued to experience a slowdown, and in February Athenex unloaded its Dunkirk manufacturing facility to ImmunityBio for $40 million to help pay down debt and beef up cash reserves. In March, Athenex announced that it was planning to layoff an undisclosed number of its employees, which was pegged at a total of 652 full-time workers as of year-end 2021.

Athenex’s current cell therapy pipeline includes medicines in two phase 1 studies, one in patients with high-risk neuroblastoma and another in patients with lymphoma and leukemia. Athenex is also expected to ask regulators to approve human testing for the allogeneic CAR-NKT therapy, KUR-503, in liver cancer next year.