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Positive Phase 3 data for KX2-391 featured at 2019 AAD Annual Meeting
Promising early and complete response data reported for Oraxol in cutaneous angiosarcoma
Topline results from Oraxol Phase III clinical trial expected August 2019
Presenting four abstracts featuring Athenex product candidates at 2019 ASCO annual meeting
Approximately 100% year-over-year increase in Q1 product sales
Conference Call and Live Audio Webcast at 8:00 a.m. Eastern Time today
BUFFALO, N.Y., May 09, 2019 (GLOBE NEWSWIRE) -- Athenex, Inc. (NASDAQ: ATNX), a global biopharmaceutical company dedicated to the discovery, development and commercialization of novel therapies for the treatment of cancer and related conditions, today announced its financial results and business highlights for the first quarter ended March 31, 2019.
“In the first quarter of 2019 we continued to make progress across our all our technology platforms and business units as we execute on our corporate strategy to build a global oncology company delivering more effective, safer and tolerable treatments for cancer patients,” stated Dr. Johnson Lau, Chief Executive Officer and Chairman of Athenex. “Most notably, we recently reported promising preliminary data from our ongoing pilot study of Oraxol in angiosarcoma, which included three complete responses from the first seven patients to receive at least six weeks of Oraxol monotherapy, all of whom showed visible improvements in the angiosarcoma lesions within one to two weeks. We believe the high response rate and strong safety profile further support the rationale that oral paclitaxel can potentially achieve a more desirable pharmacokinetic profile and a better clinical outcome, giving us greater confidence in our all of our Oraxol clinical programs.”
Dr. Lau continued, “Having achieved target enrollment in our Phase III trial of Oraxol in metastatic breast cancer we look forward to announcing top line results in August. Preparations are underway for regulatory filings for our partnered product KX2-391 in actinic keratosis. We are also working to build out our commercial and manufacturing infrastructure and develop our corporate brand in advance of anticipated proprietary product launches. Finally, we have added to our Board of Directors with four key appointments.”
“We have also strengthened our balance sheet, with a private placement equity offering, completed on May 7, 2019, in which we raised gross proceeds of $100 million. We are very grateful for the support from the three leading healthcare investment firms who participated in this transaction,” concluded Dr. Lau.
First Quarter 2019 and Recent Business Highlights:
Financial Results for the First Quarter Ended March 31, 2019
Athenex is on track to achieve its revenue guidance on products sales issued in March 2019. Product sales for the three months ended March 31, 2019 were $25.2 million, compared with $12.6 million for the three months ended March 31, 2018, an increase of $12.6 million or approximately 100%. The increase was attributable to a $6.0 million increase in specialty product sales, a $5.0 million increase in 503B product sales driven significantly by Vasopressin, and a $2.1 million increase in API product sales.
Total revenue for the three months ended March 31, 2019 was $25.3 million, a decrease of $12.5 million, or 33%, as compared to $37.8 million for the three months ended March 31, 2018. The decrease was primarily due to a decrease in licensing revenue of $25.0 million. This decrease was offset by the increases in product sales described above.
Cost of sales for the three months ended March 31, 2019 totaled $19.9 million, an increase of $8.6 million, or 76%, as compared to $11.3 million for the three months ended March 31, 2018. This was primarily due to the increase of $6.2 million cost of sales from the specialty products and $2.4 million cost of sales from 503B and API products. The decrease in gross profit and gross margin was primarily due to the absence of licensing revenue in the interim period.
Research and development expenses for the three months ended March 31, 2019 were $24.5 million as compared to $21.3 million for the three months ended March 31, 2018. This was primarily due to an increase in licensing fees and preclinical development activities.
Selling, general and administrative expenses for the three months ended March 31, 2019 were $15.2 million as compared to $13.1 million for the three months ended March 31, 2018. This was primarily due to an increase of $2.6 million related to the pre-launch costs of the Company’s proprietary drugs, offset by a decrease of $0.5 million in general administrative expenses.
Net loss attributable to Athenex for the three months ended March 31, 2019 was $35.2 million, or $0.53 per diluted share, compared to a net loss of $7.3 million, or $0.12 per diluted share, in the same period last year.
At March 31, 2019, the Company had cash, cash equivalents and short-term investments aggregating $71.3 million, compared to $107.4 million at December 31, 2018. Based on the current operating plan, the Company expects that its cash, cash equivalents and short-term investments as of March 31, 2019, together with proceeds it has recently raised from the private placement and cash to be generated from operating activities, will enable it to fund its operating expenses and capital expenditure requirements through at least the next twelve months.
On May 7, 2019, the Company closed a private placement agreement in which it issued 10 million shares of common stock to three institutional investors (Perceptive Advisors, Avoro Capital Advisors (formerly known as venBio Select Advisor) and OrbiMed) at a purchase price of $10.00 per share, for aggregate gross proceeds of $100 million to Athenex, before deducting offering expenses.
Outlook and Upcoming Milestones:
The company provides revenue guidance for product sales only. The revenue guidance excludes license and collaboration fees. Athenex reaffirms the product sales guidance issued in March 2019. Athenex is forecasting that product sales in 2019 will increase by between 25% and 30% year-over-year from $56.4 million in 2018.
Conference Call and Webcast Information:
The Company will host a conference call and live audio webcast today, Thursday, May 9, 2019, at 8:00am Eastern Time to discuss the financial results and provide a business update.
To participate in the call, dial 877-407-0784 (domestic) or 201-689-8560 (international) fifteen minutes before the conference call begins and reference the conference passcode 13689379. The live conference call and replay can also be accessed via audio webcast at https://edge.media-server.com/m6/p/ohu4cnks and on the Investor Relations section of the Company’s website, located at http://ir.athenex.com/, under “Events and Presentations.”
About Athenex, Inc.
Founded in 2003, Athenex, Inc. is a global clinical stage biopharmaceutical company dedicated to becoming a leader in the discovery, development and commercialization of next generation drugs for the treatment of cancer. Athenex is organized around three platforms, including an Oncology Innovation Platform, a Commercial Platform and a Global Supply Chain Platform. The Company’s current clinical pipeline is derived from four different platform technologies: (1) Orascovery, based on non-absorbed P-glycoprotein inhibitor, (2) Src kinase inhibition, (3) T-cell receptor-engineered T-cells (TCR-T), and (4) Arginine deprivation therapy. Athenex’s employees worldwide are dedicated to improving the lives of cancer patients by creating more active and tolerable treatments. Athenex has offices in Buffalo and Clarence, New York; Cranford, New Jersey; Houston, Texas; Chicago, Illinois; Hong Kong; Taipei, Taiwan; and multiple locations in Chongqing, China. For more information, please visit www.athenex.com.
Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements. These forward-looking statements are typically identified by terms such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “foresee,” “guidance,” “intend,” “likely,” “may,” “plan,” “potential,” “predict,” "preliminary", “probable,” “project,” "promising,” “seek,” “should,” “will,” "would," and similar expressions. Actual results might differ materially from those explicit or implicit in the forward-looking statements. Important factors that could cause actual results to differ materially include: the development stage of our primary clinical candidates and related risks involved in drug development, clinical trials, regulation, manufacturing and commercialization; our reliance on third parties for success in certain areas of Athenex’s business; our history of operating losses and need to raise additional capital to continue as a going concern; competition; intellectual property risks; risks relating to doing business in China; and the other risk factors set forth from time to time in our SEC filings, copies of which are available for free in the Investor Relations section of our website at http://ir.athenex.com/phoenix.zhtml?c=254495&p=irol-sec or upon request from our Investor Relations Department. All information provided in this release is as of the date hereof and we assume no obligation and do not intend to update these forward-looking statements, except as required by law.
Managing Director, LifeSci Advisors, LLC
Tel: +1 716-427-2952
Direct: +1 212-915-2564
Chief Financial Officer
Corporate Development and Investor Relations
|Athenex, Inc. & Subsidiaries|
|Condensed Consolidated Balance Sheets|
|March 31,||December 31,|
|Balance sheet data:||(in thousands)|
|Cash, cash equivalents||$||71,003||$||49,794|
|Total stockholders' equity||$||95,581||$||128,769|
|Athenex, Inc. & Subsidiaries|
|Condensed Consolidated Statement of Operations|
|Three Months Ended March 31,|
|(in thousands)||(in thousands)|
|Product sales, net||$||25,163||$||12,605|
|License fees and consulting revenue||105||25,091|
|Cost of sales||(19,902||)||(11,326||)|
|Research and development expenses||(24,475||)||(21,303||)|
|Selling, general, and administrative expenses||(15,188||)||(13,080||)|
|Interest (expense) income||(1,472||)||227|
|Income tax (expense) benefit||(500||)||307|
|Less: net loss attributable to non-controlling interests||(997||)||(41||)|
|Net loss attributable to Athenex, Inc.||$||(35,233||)||$||(7,298||)|
|Athenex, Inc. & Subsidiaries|
|Condensed Consolidated Statement of Cash Flows|
|Three Months Ended March 31,|
|Net cash (used in) operating activities||$||(32,971||)||$||(12,726||)|
|Net cash provided by investing activities||52,198||(56,800||)|
|Net cash provided by financing activities||976||68,981|
|Net effect of foreign exchange rate changes||1,006||478|
|Net increase (decrease) in cash and cash equivalents||21,209||(67||)|
|Cash and cash equivalents at beginning of period||49,794||39,284|
|Cash and cash equivalents at end of period||$||71,003||$||39,217|