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Background

Athenex is a global biopharmaceutical company focused on bringing novel therapeutics to market for the treatment of cancer. The company, founded in 2003, is composed of three primary units including the Oncology Innovation Platform, Global Supply Chain Platform, and Commercial Platform. The Oncology Innovation Platform is responsible for research and development, the Global Supply Chain Platform supplies active pharmaceutical ingredients for drug development efforts, and the Commercial Platform covers marketing and sales of its drugs. Athenex has one product currently on the market. Klisyriยฎ (tirbanibulin) is an ointment and it is the only 5-day treatment for Actinic keratosis. The tirbanibulin ointment received FDA approval in December 2020 followed by authorization in the European Union in July 2021. Athenex also has a diverse pipeline with two products currently in Phase II clinical trials. Both drug candidates use oral paclitaxels with encequidar, however, one is targeting treatment of metastatic breast cancer while the other is targeting Angiosarcoma.



Recent Developments

o Athenex appointed Joe Annoni as Chief Financial Officer (22.02.2022)

o Athenex completed the sale of their Dunkirk manufacturing facility to ImmunityBio (15.02.2022)

o Athenex acquired Kuur Therapeutics, an immunotherapy company focused on treating solid and hematological malignances (May 2021)

o Approval of Klisyriยฎ in the European Union (July 2021)

o The Marketing Authorization Application (MAA) for Oral Paclitaxel and Encequidar for the treatment of advanced breast cancer was validated for review by the United Kingdom Medicines and Healthcare products Regulatory Agency (29.11.2021)


Conclusion

Many people are losing faith in Athenex due to its recent market decline, but the companyโ€™s promising pipeline, leadership changes, and internalization of key supply chain components are setting strong fundamentals for exponential growth. Taking a closer look at these key characteristics should instill hope in investors.


Athenex has income from its commercialized product, Klisyriยฎ, and this income is expected to grow significantly with the recent approval of Klisyriยฎ in the European Union. Peak sales of tirbanibulin are estimated to surpass $280 million especially through the partnership with Almirall, a pharmaceutical company headquartered in Barcelona that will drive European sales. Athenex is expected to report a 84.6% increase in revenue to $40.261 million compared to $21.81million in Q4 just a year ago. Athenex also received $40 million in recent income from the sale of its Dunkirk manufacturing plant and the company plans to use this money to pay debt and other corporate expenses.


The future success of Athenex will strongly depend on the commercialization of additional novel therapeutics. The leading drug candidate for commercialization is their Oral Paclitaxel plus Encequidar used to treat metastatic breast cancer. Athenexโ€™s stock took a major hit in March of 2021 after the company received a Complete Response Letter (CRL) from the FDA in response to their Phase III trial of Oral Paclitaxel in metastatic breast cancer. The FDA had concerns for U.S. safety largely because the Phase III trials were focused on Latin America. Despite the rejection of the current Phase III trials, the FDA encouraged Athenex to continue development of this treatment and agreed that a well conducted trial could address the issues raised in the CRL. Athenex is designing a new clinical study that they hope will satisfy the concerns of the FDA and lead to commercialization in the United States which would result in a major rise in the Athenex stock. Athenex received promising news in November 2021 when the Marketing Authorization Application (MAA) for Oral Paclitaxel for the treatment of advanced breast cancer was validated for review by the United Kingdom Medicines and Healthcare products Regulatory Agency (MHRA). Following a 150-day assessment, a decision on approvability of the product will be provided. This is a major step towards commercialization of Oral Paclitaxel that would lead to significant revenue for Athenex.


The global breast cancer therapeutics market size is projected to reach 55.27 billion USD by 2027 so capturing a piece of this market through the approval of Oral Paclitaxel would lead to significant revenue that would drive up Athenex stock prices. Additionally, Oral Paclitaxel received an Orphan Drug Designation for its potential use treating angiosarcoma, a cancer that does not currently have a treatment. The soft tissue sarcoma market is projected to be worth over 420 million USD in 2030 which offers another avenue of strong revenue if Oral Paclitaxel is approved for commercialization. Athenex also has a diverse pipeline of other drugs undergoing Phase I clinical trials. An appealing aspect of their pipeline is that Athenex uses four different platform technologies including Orascovery, Src kinase inhibition, cell therapy, and arginine deprivation therapy. The multitude of technologies under investigation provide protection in the case that one technology fails. This greatly increases Athenexโ€™s chances of success with bringing new drugs to market.


Athenex has demonstrated a dedication to future growth through the recent hiring of Joe Annoni as the Chief Financial Officer. Annoni stated that he plans to โ€œrefocus the companyโ€™s efforts to unlock shareholder value.โ€ This leadership change aims to improve outcomes for shareholders which is promising news for investors. Athenex also made the intentional decision to internalize key components of the supply chain. The past year was riddled with shortages caused by supply chain issues, and this was especially impactful for the pharmaceutical industry. Athenex is strategically investing in resources to prevent these issues from impacting their sales. They have their own cGMP manufacturing facility, and they source many high-demand active pharmaceutical ingredients from their internal supply chain. This positions them to be less dependent on the dysfunctional supply chain.


Careful consideration of these points should reveal the potential for rapid growth of Athenex and bring a positive new perspective to doubtful investors.


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