New York drug developer Athenex filed for bankruptcy and is seeking buyers for its three businesses
Deals
May 16, 2023
May 15, 2023
New York-based drug developer, Athenex, has filed for bankruptcy and started seeking buyers for its three businesses as it runs out of cash. The company has been struggling since the FDA rejected its oral chemotherapy candidate earlier this year. Athenex then abandoned its plans to bring the paclitaxel formulation to market in the US, resulting in layoffs and a narrowed focus on cell therapies. However, this pivot hit a snag earlier this year when a clinical hold was triggered by a death.
Oaktree, an asset management company, accused Athenex of falling behind on loan repayments, which led to the filing of Chapter 11 bankruptcy protection. In a statement, Athenex CEO, Johnson Lau, attributed the bankruptcy filing to the "significant regulatory setback" of the oral paclitaxel rejection, coupled with challenging biotech markets and the difficult economic environment.
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 is already in place, reflecting the fact that Athenex began shopping that business to potential buyers in 2021.
The APD unit, which sells generic injectable products, will establish a bottom-end bidding bar for the unit. The sales process for Orascovery and the cell therapy unit is 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 cell therapies, including the anti-GD2 candidate that the FDA placed on clinical hold earlier this year.
Members of LevelFields received the alert of this event on May 15, 7:25 AM ET
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