Athenex Announces $225 Million Loan Agreement with Oaktree

Rhea-AI Summary

Athenex, Inc. (NASDAQ: ATNX) has secured a $225 million loan agreement with Oaktree Capital Management to support its cancer treatment initiatives. The funds will aid in the commercial launch of Oral Paclitaxel, refinance existing debt, and support R&D efforts. The initial $100 million will be used to repay previous debt, while the remaining $125 million will be accessible upon meeting specific milestones. This loan matures in June 2026, enhancing Athenex's financial flexibility to advance its clinical pipeline and commercialization efforts.

Positive

• Secured $225 million loan to support cancer drug commercialization.
• Initial $100 million to repay existing debt, improving financial position.
• Remaining funds contingent upon achieving regulatory and commercial milestones, enabling growth.

Negative

• Dependence on milestone achievement for additional funding.
• Existing operational losses and need for continued capital raise.

BUFFALO, N.Y., June 22, 2020 (GLOBE NEWSWIRE) -- Athenex, Inc. (“Athenex” or the “Company”) (NASDAQ: ATNX), a global biopharmaceutical company dedicated to the discovery, development and commercialization of novel therapies for the treatment of cancer and related conditions, today announced that it has entered into a $225 million loan agreement with funds managed by Oaktree Capital Management, L.P. (“Oaktree”), a leading global investment firm (the “Agreement”). The Company expects the proceeds from the financing will be used to fund the commercial launch of oral paclitaxel and encequidar (Oral Paclitaxel), ongoing pipeline development, refinancing of existing indebtedness, manufacturing infrastructure, and working capital and general corporate purposes.

The Agreement provides Athenex with up to $225 million of capital. $100 million is being funded up front, with a portion of the upfront loan proceeds being used to repay in full the existing debt facility with the Perceptive Credit Opportunities Fund. Additional debt tranches of $125 million in aggregate are available subject to Athenex’s achievement of certain regulatory and commercial milestones. The loan matures in June 2026. Further information with respect to the term loan is set forth in a Form 8-K filed by Athenex with the Securities and Exchange Commission on June 22, 2020.

“We are pleased to have Oaktree as our partner in the continued pursuit of our mission to deliver innovative cancer treatments to patients,” said Dr. Johnson Lau, Chairman and Chief Executive Officer of Athenex. “This term loan will provide Athenex the financial flexibility to continue advancing the development and commercialization of our lead drug candidates. We intend to further invest in the lifecycle management of Oral Paclitaxel and additional R&D activities to maximize the potential value of our product pipeline. This funding will also provide necessary capital to support our operations as a commercial-stage biopharmaceutical company. We are grateful to have had the Perceptive Credit Opportunities Fund as our credit partner to enable us to build our clinical pipeline.”

Aman Kumar, Managing Director at Oaktree, commented, “We are excited to be a long-term partner of Athenex by providing financial support for clinical and commercialization activities. We believe Oral Paclitaxel and the Orascovery platform could provide important treatment options for cancer patients around the world.”

Sam Chawla, Portfolio Manager at Perceptive Advisors, added, “We are delighted that our financing partnership with Athenex has supported development of the Company’s pipeline and business. We congratulate Athenex on the tremendous clinical advancements made with its two key drug candidates. We continue to be a strong believer in the long-term potential of Athenex and look forward to seeing the Company grow to the next level as it delivers important medicines to cancer patients in need.”

Ladenburg Thalmann & Co. Inc. and Royalty/Revenue Interest Capital Advisors LLC served as financial advisors to Athenex and Cooley LLP served as legal counsel to Athenex. Sullivan & Cromwell LLP served as legal counsel to Oaktree.

About Athenex, Inc.
Founded in 2003, Athenex, Inc. is a global clinical stage biopharmaceutical company dedicated to becoming a leader in the discovery, development and commercialization of next generation drugs for the treatment of cancer. Athenex is organized around three platforms, including an Oncology Innovation Platform, a Commercial Platform and a Global Supply Chain Platform. The Company’s current clinical pipeline is derived from four different platform technologies: (1) Orascovery, based on P-glycoprotein inhibitor, (2) Src kinase inhibition, (3) T-cell receptor-engineered T-cells (TCR-T), and (4) Arginine deprivation therapy. Athenex’s employees worldwide are dedicated to improving the lives of cancer patients by creating more active and tolerable treatments.  Athenex has offices in Buffalo and Clarence, New York; Cranford, New Jersey; Houston, Texas; Chicago, Illinois; Hong Kong; Taipei, Taiwan; multiple locations in Chongqing, China; Manchester, UK; Guatemala City, Guatemala and Buenos Aires, Argentina. For more information, please visit www.athenex.com.

About Oaktree
Oaktree is a leader among global investment managers specializing in alternative investments, with $113 billion in assets under management as of March 31, 2020. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in credit, private equity, real assets and listed equities. The firm has over 950 employees and offices in 19 cities worldwide. For additional information, please visit Oaktree’s website at http://www.oaktreecapital.com/.

Forward Looking Statements
Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements. These forward-looking statements are typically identified by terms such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “foresee,” “goal,” “guidance,” “intend,” “likely,” “may,” “plan,” “potential,” “predict,” “preliminary,” “probable,” “project,” “promising,” “seek,” “should,” “will,” “would,” and similar expressions. Actual results might differ materially from those explicit or implicit in the forward-looking statements. Important factors that could cause actual results to differ materially include: the development stage of our primary clinical candidates and related risks involved in drug development, clinical trials, regulation, manufacturing and commercialization; our reliance on third parties for success in certain areas of Athenex’s business; our history of operating losses and need to raise additional capital to continue as a going concern; risks and uncertainties related to the COVID-19 pandemic and its potential impact on our operations, cash flow and financial condition; our ability to integrate CIDAL’s assets into our existing operations; competition; intellectual property risks; risks relating to doing business internationally and in China; the uncertainty of when, if at all, we will be able to resume full API production operations in Chongqing; and the other risk factors set forth from time to time in our SEC filings, copies of which are available for free in the Investor Relations section of our website at http://ir.athenex.com/phoenix.zhtml?c=254495&p=irol-sec or upon request from our Investor Relations Department. All information provided in this release is as of the date hereof and we assume no obligation and do not intend to update these forward-looking statements, except as required by law.

CONTACTS

Athenex, Inc.:
Randoll Sze
Chief Financial Officer
Email: RandollSze@athenex.com

Jacqueline Li
Corporate Development and Investor Relations
Email: JacquelineLi@athenex.com

FAQ

What is the significance of Athenex's $225 million loan agreement?

The $225 million loan will fund the launch of Oral Paclitaxel and support ongoing development, providing essential capital for Athenex.

When does Athenex's loan from Oaktree mature?

The loan agreement matures in June 2026.

How much funding will Athenex initially receive from the loan?

Athenex will initially receive $100 million from the loan agreement.

What will the initial funds from the loan be used for?

The initial funds will be used to repay existing debt and support the company's operations.

What are the conditions for the additional $125 million tranche of funding?

The additional funding is available subject to Athenex achieving certain regulatory and commercial milestones.