A bio-pharmaceutical firm based in California has offered to purchase Athenex Inc. a Buffalo-based drug company that is facing financial difficulties.
According to the letter, Biomed Industries sent a letter to the Athenex Board of Directors on April 13, offering to buy the common stock at $1.21 per share.
The proposal was calculated based on Athenex’s April 12 closing stock price and equity market capitalization of $10.48 millions.
Biomed is currently working on Phase 2B and 3 of its drug that treats Alzheimer's. According to the letter, Biomed would be able to use Athenex manufacturing facilities in order for both companies’ 'pipelines'. According to the letter, Athenex could break even within a year if it accepts the offer.
In the letter, Chairman and CEO Lloyd Tran stated that he believed his proposal was in the best interest of all shareholders because it offered a risk/reward situation for shareholders that is significantly more attractive than the current plan of the board. We strongly encourage you to refrain from making any major transactions until our proposal has been approved.
The letter highlights Athenex struggles over the past few years. It begins with the failure of its drug in clinical trials in February 20,21. This resulted in a fall in stock price from $12 to under $1. In 2021, the company's net loss was approximately $160 million. Last year it was about $99 millions.
Athenex was notified of its default on a $44.7 million loan from Oaktree last month. Athenex has disputed these defaults but reported cash equivalents worth $36.7 million, which is not enough to pay Oaktree.
As part of the restructuring, the company cut costs. 92 workers were laid off as part of the closure.