Buffalo company Athenex exits another business line, which will cost some jobs in
Athenex Inc. is exiting the 503B sterile compounding business, which accounts for nearly one-fifth of its product sales, as the Buffalo biopharmaceutical company races to try to reverse its tumbling fortunes.
Exiting the 503B sterile compounding business will affect “some of the employees” at the company’s compounding facility in Newstead, said Dr. Daniel Lang, president of Athenex Cell Therapy. He did not respond Friday to a follow-up question about how many employees are affected.
“We are actively working through this transition and making every attempt to move those employees both to an external company with which we have a relationship and internally to other departments,” Lang said.
“The external company is located in the Buffalo, Erie County area and is working to fill the gap in the marketplace due to Athenex exiting the 503B business,” he said. “Athenex has a key focus on minimizing the impact to our employees and keeping jobs in the area.”
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As of Dec. 31, 2021, according to state records obtained by The Buffalo News, Athenex had a total of nearly 300 employees across Western New York. That included 97 at its headquarters and innovation center on the Buffalo Niagara Medical Campus, 116 at all other Erie County operations and roughly 72 at its leased Dunkirk plant, which it has since sold its interest in.
Athenex, founded as Kinex Pharmaceuticals nearly two decades ago, in March announced an aggressive turnaround plan, which involves focusing its research-and-development resources on developing cell therapy programs while cutting jobs and slashing costs to lower operating expenses by more than 50%.
That shift involved Athenex selling its leasehold interest in a state-funded Dunkirk manufacturing plant to California-based ImmunityBio for about $40 million – a deal that closed in February. As part of that agreement, Athenex entered into a preliminary agreement with ImmunityBio so it would have the ability to manufacture its 503B products at the Dunkirk facility.
It wasn’t immediately clear how Friday’s announcement affected that plan to manufacture 503B products at the Dunkirk plant, which ImmunityBio does not yet have operational because it determined in recent months that the building “has construction needs that may take approximately 12-18 months in order to enable the facility to be used as it has been intended.”
Athenex said 503B product sales accounted for roughly 19% of its total product sales in the third quarter. Moving forward, the company said it will continue to focus on advancing its cell therapy pipeline as well as monetizing non-core assets.
“The decision to exit the 503B sterile compounding business continues the strategy laid out earlier this year to divest non-core assets and refocus the company and resources to cell therapy,” Athenex CEO Dr. Johnson Lau said.
Athenex stock, which traded for more than $12 as recently as February 2021, has since dropped below 20 cents. The company could be delisted from the Nasdaq unless it satisfies the minimum $1 bid price requirement by March 14.