Ground-breaking for the Athenex Inc. drug manufacturing plant in Dunkirk is expected to take place before the end of June 2018, executives from the Buffalo pharmaceutical company said Thursday.
The state in September reached an agreement with the company to disburse up to $200 million in state funding that will be used to build and equip a 315,000-square-foot pharmaceutical manufacturing plant in Dunkirk.
"We're making good progress in working with the state of New York on our Dunkirk facility," said Johnson Lau, Athenex's chairman and chief executive officer, during a conference call after the company reported higher-than-expected revenues during the third quarter and raised its sales guidance for this year.
The company, which has more than 400 employees, has promised to create 450 jobs and spend more than $1.5 billion on operating expenses at the Dunkirk factory during the first 10 years that it is open in return for being able to lease the plant for $1 a year. The company has the option to extend the lease for a second, 10-year term for virtually the same financial terms.
Athenex is trying to develop new cancer drugs that can be administered in pill form, rather than intravenously. And it has developed a way of inhibiting a type of protein, which Athenex officials believe could help limit the growth of some types of cancer. Two of its drug candidates are in advanced Phase 3 clinical trials.
The company also is making and selling other types of generic drugs in a push to build a revenue stream at a time when its own drug development efforts are burning through more than $20 million in cash during each quarter.
Those commercial sales were stronger than expected during the third quarter, allowing the company to earn nearly $850,000 from those operations.
"In the interim, we are laying an extremely solid foundation with the commercial platform," said Jeffrey Yordon, Athenex's president and chief operating officer.
Athenex said it lost $23.3 million, or 41 cents per share, during the third quarter, down from a loss of $24.7 million, or 61 cents per share, a year ago, when the company had fewer shares outstanding before its initial public stock offering in June.
The company's revenues more than doubled to $13.7 million from $5.2 million, mainly because of $7.4 million in sales from a commercial platform that had no sales a year ago.The loss was much smaller than the loss of 62 cents that analysts were expecting, while Athenex's sales were far stronger than the $9.3 million analysts forecast.
"We had a really good quarter," Lau said.
Athenex executives said they expect the company's commercial sales to keep rising as it adds new products. It said sales during the fourth quarter are expected to range between $11 million and $13 million.
While Athenex raised $64 million through its stock sale and had $69 million in cash at the end of September, the company's drug development efforts, which are expected to rise in cost as its drugs advance through the clinical trial stage, likely will require the firm to raise additional capital in the coming months. Athenex said it has enough cash to fund its operations through March.