People, Pharma

With major backing from New York and China, Athenex sets sights on a $100M cancer drug IPO

Johnson Lau wants to make his comeback as CEO of a public biotech company, even though the last outing 15 years ago didn’t go so well.

Johnson Lau

Lau and his crew have set their sights on a $100 million windfall for Athenex, a Buffalo-based cancer drug developer which has made a commitment to hire hundreds of staffers to win a $200 million commitment from the state to fund the construction of a new manufacturing complex.

Simply put, Lau and his company believe they have developed a platform tech that gives them the tools needed to make IV chemotherapies into oral drugs that can be more effective in treating cancer. That has given 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.

Formerly known as Kinex, the company has operations in the US and China and it’s burned through $195 million in expenses so far. Mandra Capital, run by Song-Yi Zhang, owns 16% of the company, Ma Huateng controls 9% and Lau himself is holding 13% of the stock, according to their SEC filing.

Just a couple of weeks ago New York officials reportedly released $200 million to build a manufacturing center for Athenex, which committed to hiring 450 staffers over the next 5 years. Chinese officials, meanwhile, have committed to funding most of the cost of another facility in Chongqing, China, according to the S-1.

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.

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