With $100M in fresh backing and a new TCR initiative, Athenex launches China JV
A year after Johnson Lau outlined the full measure of his plans for a biotech comeback in an S-1 filing for Athenex $ATNX, the biotech exec has followed up with a $100 million investment/loan from Perceptive along with a new Chinese joint venture which will set out to engineer TCRs for cancer.
The Buffalo-based company had kept something of a low profile, but that’s all long over now as Athenex looks to grab some headlines.
Lau and his company are promoting a platform tech that they say gives them the tools needed to make IV chemotherapies into oral drugs that can be more effective in treating cancer. That has produced them Oraxol (oral paclitaxel) along with oral irinotecan, docetaxel and topotecan. On top of the pipeline, the company also has a manufacturing arm to deliver active pharmaceutical ingredients for itself and clients.
In this new deal, Perceptive is buying $50 million in equity and providing $50 million in debt. The biotech also in-licensed a pegylated genetically modified human arginase developed by the Hong Kong Polytechnic University and then licensed to PolyTom with plans for clinical development.
And Athenex is creating a joint venture — Axis Therapeutics — with Xiangxue Life Sciences, a subsidiary of Guangzhou Xiangxue Pharmaceutical, working on TCR cell therapies for cancer.
Athenex is issuing $5 million in stock to Xiangxue Life Sciences as an upfront payment and contributing $30 million in cash to the joint venture. Axis Therapeutics will pay milestones of up to $110 million to Xiangxue Life Sciences, which will retain the China rights to the technology.
Athenex scored an unimpressive $66 million from its IPO last year, pricing at $11. But the shares quickly gained steam, and the price now is over $18 a share, with a market cap of more that $1 billion.
Lau, a former managing partner at Roth and a recognized antiviral specialist who once worked for Schering-Plough, was at the center of a colossal scrap way back in 2002 over a then-record $260 million biotech IPO for a biotech company called Ribapharm. Ribapharm was created by ICN Pharmaceuticals and gifted with ribavirin, a longtime mainstay in hep C cocktails before the new generation of drugs came along. ICN sold 20% of the company to the public, well below the range Lau shot for, then balked at spinning off the rest of the shares. Lau and his team got into a public brawl with ICN and then resigned en masse after telling reporters that the company was scheming to buy back the shares cheap.
In 2003, ICN — which did retrieve the shares at a big discount — changed its name to Valeant. The rest, as they say, is history.