Athenex – Big trouble in little Chongqing

Not only is the factory in the wrong place, it’s not built yet


November 20, 2019 – On the ground investigation of Athenex’s Chongqing factory show that the Athenex’s new API plant is not located in the Chongqing International Bio-City, and is still heavily under construction. This deception extends to Chinese press releases.

The site visits were conducted on the week ending November 15, 2019, several months after the announcement of its “completion” by Athenex.

  • The factory is not located in the Chongqing International Bio-City development, but some 25 miles away near Maliuzui toll station.
  • The building has no sealed road access nor car parking facilities; we were unable to ascertain whether basic utilities had been connected but this seems unlikely.
  • Everyone within the facility is still wearing hardhats, and the site is still full of heavy machinery, including cranes. Equipment has yet to be installed – company statements about validation testing in Q4 2019 are false.

ATNX site

The announcement by Athenex on September 23, 2019 claiming the facility to be complete and in the midst of a validation batch paints a pretty picture, which is completely false.

To be clear: there is no completed API Facility. This fraud mirrors the various sham businesses Athenex’s directors have orchestrated in the past.

On November 19, 2019 Athenex announced the title of their presentation at the San Antonio Breast Cancer Symposium. This is a blatant strategy to pump the price of their stock by changing the title of the presentation which has had no change in content to the one announced on September 23, 2019 (ironically, the same date Athenex’s Chongqing plant was allegedly “completed”), which was submitted in June 2019.

In summary:

  1. Abstracts were due by July 8, 2019.
  2. Athenex’s abstract title was announced on September 23, 2019
  3. Athenex changed their abstract title on November 19, 2019
  4. Athenex is not presenting in the Ongoing Clinical Trials category, and therefore cannot have had new information since July 8, 2019.

Athenex’s SABCS presentation is the same as the one announced on September 23. RBC analyst Kennen MacKay’s reiteration of an outperform on a “SABCS win” sounds ridiculous considering that this is the same data that prompted such an unremarkable title 2 months earlier caused the collapse of the stock.

Of course, when Athenex originally announced the presentation, the issues we highlighted in our reports had not yet been brought to light.

We continue to believe investors are being duped by Athenex management through virtually identical charades orchestrated at their previous failed ventures, such as Sino Forest.

We have annexed an extended summary of all of Viceroy’s findings, and all of our pictures of Athenex’s actual, unfinished, API plant.

Author: Viceroy Research

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