Athenex Files for Bankruptcy, Cuts 123 Jobs Across New York
Pictured: Bankruptcy paperwork on desk/JJ Gouin/iStock
Buffalo-based Athenex announced Sunday that it has filed for Chapter 11 bankruptcy. A total of 123 employees will be laid off as a result, according to a WARN notice filed with the state of New York.
The layoffs will take place in three phases. The first phase commenced on May 12, and the others will begin on June 29 and Aug. 11, respectively.
In Sunday’s press release, the company stated that after speaking with its lenders, it has decided to sell off its remaining assets. Johnson Lau, CEO of Athenex, said in a statement that the company’s primary goal now is to find buyers who will “continue development of the important drug candidates for which we have established a good foundation and bring them to market.”
As is often the case, Athenex started out strong. In 2016, former New York Governor Andrew Cuomo announced the state would provide $225 million for a 300,000-square-foot manufacturing facility for the company, WGRZ reported. This investment was part of Buffalo Billion, a project Gov. Cuomo led that included investing $1 billion into Buffalo’s economy.
Following that investment, the regulatory road has been anything but smooth for the biotech. According to WGRZ, the facility opened its doors in 2021, but by January 2022, Athenex had sold its lease on the building.
In March of 2021, the FDA denied approval of the company’s breast cancer treatment, paclitaxel. Lau cited the agency’s complete response letter in the Athenex’s statement explaining its decision to file for bankruptcy.
“[T]his significant regulatory setback, coupled with challenging biotech markets and the difficult economic environment, put tremendous pressure on our ability to continue to fund our businesses,” he stated.
In March 2022, Athenex attempted to recover by implementing a restructuring initiative to cut costs and prioritize its cell therapy portfolio. As part of the restructuring, the company cut an undisclosed number of employees.
But in December, Athenex filed a WARN notice stating it planned to close a production facility in Clarence, NY, laying off an additional 92 employees as a result. At the time, the company cited financial difficulty as the reason behind the decision.
Athenex stated in Sunday's press release that it will now focus on the sale of three separate businesses: Athenex Pharmaceutical Division (APD), Orascovery and Cell Therapy.
According to the Chapter 11 filing, Athenex has already identified a potential stalking horse bidder for APD. The Cell Therapy business includes Athenex’s Phase I neuroblastoma candidate, which the FDA put on clinical hold in March following a patient death.
Although the company did not name any potential buyers, it said that the sale is expected to wrap up by July 1.
Rosemary Scott is a content editor at BioSpace, focusing on the job market and career development for professionals in the life sciences. You can reach her at rosemary.scott@biospace.com and on LinkedIn.