Athenex's cash dries up as it faces clinical hold on cancer therapy in wake of patient death

Athenex is in a tight spot, trying to stretch out its remaining cash and ward off an unruly creditor just as the FDA slaps a clinical hold on its neuroblastoma cell therapy while it explores a patient's death in a phase 1 trial.

The New York-based oncology company announced a “recent FDA-imposed clinical hold” for a phase 1 study evaluating its autologous GD2 CAR-NKT cell therapy for patients with relapsed or refractory high-risk neuroblastoma, in its latest earnings release this morning.

The hold is tied to the death of a “young, heavily pretreated male patient” who received a 300 million cells/m2 dose three weeks after CAR-NKT cell therapy administration. The study, which aimed to enroll 36 patients, was underway at Baylor College of Medicine (BCM) at Texas Children’s Hospital in Houston.

The pediatric patient had contracted a respiratory disease known as human metapneumovirus infection and then grade 1 cytokine release syndrome—a mild CAR-T therapy-related adverse event—that was treated with immunosuppressants. He later developed polyclonal hyperleukocytosis, which is characterized by elevated white blood cell count, complicated by multiorgan dysfunction.  

BCM is investigating the death, according to Athenex, and putting together a safety risk mitigation plan in hopes of reopening the trial, though the college didn’t provide an expected timeline or any assurances that the hold would be lifted. However, Athenex said the phase 1 study could reopen mid-2023, dependent on the FDA.

The biotech is working with BCM to answer the regulator's questions and “remains committed to the continued safe clinical development of what it believes is a promising new CAR-NKT cell therapy product.”

The clinical hold is the latest in a long line of setbacks for Athenex, which shifted focus toward its cell therapies and laid off staff last year after the FDA denied approval for its oral version of chemotherapy paclitaxel in metastatic breast cancer.

Now, despite making “significant progress” in monetizing company assets in 2022—per Athenex CEO and Chair Johnson Lau, M.D., in today’s release—the company has reported a loss of $34.2 million for the fourth quarter of 2022. At the end of the year, the biopharma—which has 39 products on the market, including Klisyri for scaly skin patches—had $36.7 million in cash and equivalents.

Part of that progress included handing off its China API facility in a $19 million deal with TiHe Capital of Beijing. The move followed a voluntarily suspension of production at the facility after several explosions were reported at chemical plants in China that resulted in the deaths of scores of people.    

Athenex is now pursuing “a broader range of strategic alternatives” in 2023, Lau said. Last month, the company effected a 20:1 reverse stock split and plans to end manufacturing of its 503B sterile compounded products in April.

Another problem is the asset management company Oaktree, which has alleged that the company is behind on certain loan repayments. While disputing the defaults, Athenex admitted that it didn't have the funds available to pay the loans back if they are recalled in full.

The company, which had previously fallen out of compliance with Nasdaq’s requirement to keep share prices above $1, was able to get its stock price up this month and avoid the delisting threat—for now. Since closing Friday, the company’s stock has plunged 18%, however, falling from $1.76 to $1.45 at midday today.