Athenex has been trying to stem the damage since receiving a complete response letter from the FDA in February 2021 with pipeline changes and other measures. But now, it’s come to layoffs and a slimmed focus on cell therapies.
A company spokesperson declined to disclose how many of Athenex’s 652 full-time employees, as of year-end 2021, are being let go to extend the biotech’s runway by 18 months. A good portion of the workforce, 242 employees, is involved in R&D, according to a Securities and Exchange Commission filing.
The cost-saving measures have already begun. The staff cuts and focus on cell therapies will reduce operating expenses by more than 50%, the company said in a full-year 2021 update Wednesday after market close.
CEO Johnson Lau characterized cell therapies as “driving the next major innovation cycle in cancer treatment.”
The FDA rejected Athenex’s drug, an oral version of the chemotherapy paclitaxel, in metastatic breast cancer in February 2021. After receiving feedback from the agency, the company decided to stop pursuing the approval in the U.S. in October 2021.
The Buffalo, New York biotech—maker of FDA- and EU-approved Klisyri for scaly skin patches—will monetize and divest its non-core assets so it can focus on cell therapies for “long-term value,” Lau said on an investor call Wednesday.
Athenex deepened its presence in cell therapies with the $70 million upfront acquisition of CAR-NKT-focused Kuur Therapeutics in May 2021.
Athenex also recently offloaded its Dunkirk manufacturing facility for $40 million to help pay down debt and beef up cash reserves. The sale to ImmunityBio—the biotech from Patrick Soon-Shiong, M.D., that was involved in the U.S. government’s COVID-19 Warp Speed operations—closed in February.
Athenex’s cell therapy pipeline includes two phase 1 studies, one in patients with high-risk neuroblastoma and another in patients with lymphoma and leukemia. Athenex will ask regulators to approve clinical entry for the allogeneic CAR-NKT therapy, KUR-503, in liver cancer in the first half of next year.
While Athenex is shifting priorities toward cell therapies, it will still look to develop paclitaxel, which awaits a decision by U.K. regulators on approval for patients with metastatic breast cancer. The company also anticipates data from a midstage study of the oral drug, in combination with GlaxoSmithKline’s PD-1 inhibitor Jemperli, in the second half of this year. That study includes patients with breast cancer before they receive their main treatment.