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SEC Filings

10-Q
ATHENEX, INC. filed this Form 10-Q on 05/09/2019
Entire Document
 

 

Supplemental cash flow information related to leases is as follows (in thousands):

 

 

 

Three

Months Ended

March 31, 2019

 

Cash paid for amount included in the measurements of lease liabilities:

 

 

 

 

Operating cash flows from operating leases

 

$

803

 

Operating cash flows from finance leases

 

 

9

 

Financing cash flows from finance leases

 

 

45

 

 

 

 

 

 

ROU assets recognized in exchange for new operating lease

   obligations

 

$

583

 

 

Future minimum payments and maturities of leases is as follows (in thousands):

 

Year ending December 31:

 

Operating Leases

 

Finance Leases

 

2019 (remaining nine months)

 

$

2,551

 

$

161

 

2020

 

 

2,968

 

 

214

 

2021

 

 

2,535

 

 

214

 

2022

 

 

2,356

 

 

20

 

2023

 

 

2,096

 

 

 

Thereafter

 

 

3,952

 

 

 

Total lease payments

 

 

16,458

 

 

609

 

Less: Imputed interest

 

 

(5,029

)

 

(50

)

Total lease obligations

 

 

11,429

 

 

559

 

Less: Current obligations

 

 

(3,067

)

 

(185

)

Long-term lease obligations

 

$

8,362

 

$

374

 

 

10. Related Party Transactions

During the three months ended March 31, 2019 and 2018, the Company entered into transactions with individuals and companies that have financial interests in the Company. Related party transactions included the following:

a.

In 2015, CDE signed an agreement with Avalon BioMedical (Management) Limited and its subsidiaries (“Avalon”) under which Avalon would receive certain administrative services and would occupy space at CDE’s research location. Avalon would reimburse CDE for these administrative services as incurred and pay CDE a percentage of the total rent payment based on its staff headcount occupying the Hong Kong research and development facility (See Note 15—Commitments and Contingencies). Members of the Company’s board and management collectively have a controlling interest in Avalon. The Company does not hold any interest in Avalon and does not have any obligations to absorb losses or any rights to receive benefits from Avalon. As of March 31, 2019 and December 31, 2018, Avalon held 786,061 shares of the Company’s common stock, which represented approximately 1% of the Company’s total issued shares for both periods. Balances due from Avalon recorded on the condensed consolidated balance sheets were not significant.

In June 2018, the Company entered into two in-licensing agreements with Avalon wherein the Company obtained certain intellectual property from Avalon in an effort to develop and commercialize the underlying products. Under these agreements the Company is required to pay upfront fees and future milestone payments and sales-based royalties. During the year ended December 31, 2018, the Company recorded $5.5 million of upfront fees, consisting of $3.5 million in cash and $2.0 million in equity, as research and development expense on its condensed consolidated statement of operations and comprehensive loss.  During the three months ended March 31, 2019 and 2018, no fees were paid to Avalon in connection with the license agreements.   

b.

The Company receives consulting and licensing revenue from PharmaEssentia, a company in which Athenex has an investment classified as available-for-sale (see Note 5—Fair Value Measurements). Revenue recorded and cost-sharing funds received from PharmaEssentia amounted to $0.3 million and $0.1 million for the three months ended March 31, 2019 and 2018, respectively.     

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