BUFFALO, N.Y. (WKBW) — Athenex, a biopharmaceutical company based in Buffalo, filed for Chapter 11 bankruptcy.
The company received $200 million in the Buffalo Billion development deal in 2016, but several years later, the company said following a strategic review, it reached an agreement with lenders to move forward with an "expedited sales process" of the company's assets.
"To best facilitate this process, Athenex and certain of its subsidiaries filed voluntary proceedings under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. This will enable the Company to divest its assets and wind down the Athenex platform in an orderly fashion, while seeking to maximize value for its stakeholders. The Company anticipates concluding the expedited sales process by July 1, 2023, with the Chapter 11 cases continuing thereafter to resolve claims," according to a release from the company.
In 2016, there were promises to bring investments and jobs to the Western New York area. You may recall, there were plans to create 500 jobs at the Athenex in Buffalo and 900 at the Dunkirk facility. In 2021, Athenex sold its lease to ImmunityBio and the company moved out.
SEE MORE: Athenex enters into an agreement for ImmunityBio to takeover Dunkirk facility
Erie County Executive Mark Poloncarz shared his thoughts on the bankruptcy following a press conference on Monday.
"It doesn't mean that pharmaceutical and drug companies aren't good companies that can't be invested in, it's just this one didn't seem to work," he said, "Especially in an area like pharmaceuticals where if you have a product and it doesn't get FDA approval or does get FDA approval but doesn't reach the level of success they thought it was that's gonna have an impact on the bottom line and it certainly did with Athenex."
A WARN notice also shows that there will be 123 layoffs over the next few months. In an email to 7 News, the company said, "As Athenex pursues a sales process, Athenex Pharma Solutions, which includes the Company’s manufacturing facility in Clarence, New York, is expected to continue its operations for at least the next 90 days, to provide commercial supply of tirbanibulin ointment."
This is further proof that big, taxpayer-subsidized silver bullet projects are a bad bet. Since the failure of the Buffalo Billion, we've given the comptroller more oversight and removed some of the governor's abilities to push through this type of project. If we invest in projects like this in the future, we should be doing it with tax credits instead of giving away money up front and hoping that the company can fulfill its job promises.
The Athenex bankruptcy filing was very disappointing, especially considering the state’s investment in its expansion and the construction of the Dunkirk facility. This was a Buffalo born and bred company that we would have all liked to see succeed. That didn’t happen. Instead, the company has joined a long list of ‘Buffalo Billion’ projects that never delivered the jobs and prosperity that were promised.
A focus on creating a business-friendly climate by implementing tax cuts and removing red tape would ultimately be far more successful and less costly to taxpayers. New York's infamous status as the worst place to do business in the nation cannot be overcome by picking a few winners and losers.
