Skip links

Athenex – 2019 Q3 Financials Brief

Falling revenues, stalled operations, flat R&D.


November 7, 2019 – This report is a brief on Athenex’s Q3 results announcement. Viceroy will provide a further, more in depth update upon the release of Athenex’s 10-Q.

  • Athenex revenues continue to fall Q/Q, and has guided to do so in Q4, despite Athenex’s raised guidance. This is primarily due to higher than anticipated sales in Q1 & Q2 for Vasopressin, which has been pulled due to FDA ruling brought about by a lawsuit against Athenex by its largest customer, AmerisourceBergen.
  • Athenex COO, Jeffrey Yordon, states stated the FDA’s decision regarding Vasopressin “did not come unexpected”. Either this is a lie, or the Athenex had been consciously illegally selling as much Vasopressin as possible before the FDA undoubtedly came knocking.
  • Address of financials persists on using YOY figures to hide the fact that the company has suffered declining revenue in the last two quarters.
  • Q3 Update confirms API production is still suspended.
  • Cost of sales have conversely slightly increased Q/Q.
  • R&D expenditure is flat YOY, excluding one-time-costs, despite an increase in drugs in development. This suggests to us that Athenex have curbed spending.
  • As previously reported, Athenex have not only committed >US$1.5b expenditure at their Dunkirk site across the next ten years but are also on the hook for excess development costs for the facility, whose floorplan has expanded by 28% on-the-fly and falling significantly behind schedule. We are curious to see the cash burn in relation to this facility in Athenex’s 10-Q.
  • Athenex’s new China-funded plant must also generate unrealistic revenues of almost US$1b within 5 years of opening, despite turning over only $160m across the last 5 years combined.
  • There has been no change to Athenex’s massive cash burn this year, with losses accelerating to $102m in the 9 months leading to Q3, 2019. To manage its cash burning commitments to major facilities and R&D, Athenex has issued dilutive equity, and incredulously borrowed US$50m from major investor, Perceptive, at a punitive rate of 11%.

Athenex management “stand behind the integrity of its management team and board” and will refuse to address us, according to Mr. Lau on this morning’s conference call. This is laughable considering half the board has evaporated billions in prior frauds.

We have already highlighted management’s involvement in Sino Forest, GCL Silicon/Poly, Suntech, Chelsea Therapeutics, the world’s largest illegal taxol smuggling operation, LyphoMed, Gensia and Sagent. It is mind blowing that Athenex investors would continue to associate with any one of these farces, let alone a collection such as this.

Considering the quantum of issues Viceroy have highlighted, it is alarming to shareholders that Athenex have not addressed a single point of our work. Opting instead to simply state we have published “inaccurate information”. Other commentators have begun to back-test our work[1].
Where are the inaccuracies, Athenex?


We will provide a more updated brief upon the release of Athenex’s 10-Q.

Report 1:

Report 2:

Report 3:

Report 4:

Report 5:

Report 6:

Report 7:

Other Coverage:

[1] Blog entry-Dennis Kneale:

Important Disclaimer – Please read and acknowledge before continuing

Viceroy Research LLC are an investigative financial research group registered in Delaware, USA.

Our research reports have been prepared for educational purposes only and expresses our opinions. Our reports and any statements made in connection with them are the authors’ opinions, which have been based upon publicly available facts, field research, information, and analysis through our due diligence process, and are not statements of fact. All expressions of opinion are subject to change without notice, and we do not undertake to update or supplement any reports or any of the information, analysis and opinion contained in them. We believe that the publication of our opinions about public companies that we research is in the public interest. We are entitled to our opinions and to the right to express such opinions in a public forum. You can access any information or evidence cited in this report or that we relied on to write this report from information in the public domain.

To the best of our ability and belief, all information contained herein is accurate and reliable, and has been obtained from public sources we believe to be accurate and reliable, and who are not insiders or connected persons of the stocks covered herein or who may otherwise owe any fiduciary duty or duty of confidentiality to the issuer. We have a good-faith belief in everything we write; however, all such information is presented “as is,” without warranty of any kind – whether express or implied.

In no event will we be liable for any direct or indirect trading losses caused by any information available on this report. Think critically about our opinions and do your own research and analysis before making any investment decisions. We are not registered as an investment advisor in any jurisdiction. By downloading, reading or otherwise using our research reports, you agree to do your own research and due diligence before making any investment decision with respect to securities discussed herein, and by doing so, you represent to us that you have sufficient investment sophistication to critically assess the information, analysis and opinions in this report. You should seek the advice of a security professional regarding your stock transactions.

This website, all documents contained herein or any information herein should not be interpreted as an offer, a solicitation of an offer, invitation, marketing of services or products, advertisement, inducement, or representation of any kind, nor as investment advice or a recommendation to buy or sell any investment products or to make any type of investment, or as an opinion on the merits or otherwise of any particular investment or investment strategy.

Any examples or interpretations of investments and investment strategies or trade ideas are intended for illustrative and educational purposes only and are not indicative of the historical or future performance or the chances of success of any particular investment and/or strategy.

You should assume that the authors have a direct or indirect interest/position in all stocks (and/or options, swaps, and other derivative securities related to the stock) and bonds covered herein, and therefore stand to realize monetary gains in the event that the price of either declines.

The authors may continue transacting directly and/or indirectly in the securities of issuers covered herein for an indefinite period and may be long, short, or neutral at any time hereafter regardless of their initial recommendation.