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Crews return to work at Athenex space in Conventus building

After months of delay, crews have returned to the Buffalo Niagara Medical Campus to work on the headquarters and drug-testing laboratory for Athenex, the Buffalo-based pharmaceutical company with international operations.

The project located on the sixth floor of the Conventus medical office and research building stalled earlier this year when subcontractors walked off the job and refused to return until they were paid $1.3 million they were owed for previous work at the site.

A frustrated top Athenex official in August told The Buffalo News the company was putting on hold a planned, drug-manufacturing center in Dunkirk and an anticipated expansion at a company facility in Newstead. The company also said it was exploring all of its options – including making those investments outside Western New York. The state had previously agreed to spend $225 million on construction for the Buffalo and Dunkirk projects.

Empire State Development, a state economic development agency, replaced SUNY Polytechnic Institute as the state agency overseeing the Athenex projects after the company complained about the slow progress.

Since then, Athenex officials have signaled their satisfaction with Empire State Development.

“We’ve been very pleased with the collaborative nature of working with them,” said Flint Besecker, Athenex’s chief operating officer.

In addition to work restarting at Conventus two weeks ago, there have been other signs of progress.

• Athenex officials say they regularly communicate with Howard A. Zemsky, president and CEO of Empire State, to discuss the status of the Dunkirk project and they are pleased with his level of engagement.

• Besecker said the company also is reviving, and soon will make a decision on how to proceed with, a planned expansion at its QuaDPharma production site in Newstead. That facility does small-scale manufacturing and employs about 45 workers.

• Athenex announced its latest joint-venture agreement, this time with SunGen Pharma, to launch and market seven pharmaceutical products in this country. The drugs are injectable and solid oral dosage and already have U.S. Food and Drug Administration approval.

• And the company reported last week that it has raised $37.9 million in its latest, nearly $50 million round of debt financing. Besecker said the company has commitments from investors for the rest of the round.

Athenex, formed in 2003 as Kinex Pharmaceuticals, traces its roots to research conducted by a now-retired University at Buffalo chemistry professor.

Now named Athenex, the company acquired or made licensing agreements with several small pharmaceutical companies, giving it access to market-ready drug ingredients and drug candidates.

Today it has 375 employees worldwide.

Athenex in May 2015 reached agreement with New York State to create 1,400 jobs over five years – 700 of its own workers and 700 indirect jobs with suppliers and other companies – at a new corporate headquarters, drug testing laboratory and formulation center on the Medical Campus and at a drug manufacturing center in the Town of Dunkirk.

Gov. Andrew M. Cuomo unveiled the deal, and the state’s commitment, in February – $200 million for Dunkirk and $25 million for Conventus.

But funding delays held up progress on the projects, The News reported in August.

After the story ran, the state released the $1.3 million owed to subcontractors Frey Electric, John W. Danforth Company and Scrufari Construction Co. Frey Electric returned to work on the sixth floor of Conventus to finish “punchlist” items, such as unfinished electrical fixtures and outlets, about two weeks ago, said Gail Ettaro, an LPCiminelli spokeswoman.

Work on the second phase of the Athenex space, the testing lab and formulation center, also began in late September with installation of the heating, ventilation and air conditioning systems. Frey, Danforth and Scrufari are the main subcontractors on this phase, as well, Ettaro said. Construction is set to finish by March 1.

In Dunkirk, Empire State Development still must approve the state’s spending of $200 million on the facility before detailed engineering and site-preparation work can begin.

Besecker said Zemsky hasn’t given Athenex a commitment as to when ESD’s board will vote, but he said that’s not an issue because the company has a transparent relationship with the agency. In one sign of the improved communication, Zemsky met for dinner on Sept. 18 at the Buffalo Club with members of the company’s full global board, Besecker said.

As for QuaDPharma, the small-scale manufacturing site the company acquired in 2014 is bursting at the seams. Athenex officials had placed expansion plans there on hold but now over the next 30 days will make a decision on how to move forward there, Besecker said.

Athenex’s joint-venture agreement with SunGen follows an agreement announced earlier this year with Gland Pharma, an Indian drugmaker, to begin selling more than 20 injectable pharmaceutical products in this country.

And counting the latest round of financing, Besecker said, the company has raised about $250 million since its inception, not including equity issued for its acquisitions.


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