Athenex Snaps Up Kuur Therapeutics For $185M; Street Sees 133.7% Upside

Biopharmaceutical company Athenex Inc. (ATNX) is acquiring Kuur Therapeutics for a total consideration of $185 million. The latter develops CAR-NKT cell immunotherapies targeted at solid and hematological cancers.

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Athenex CEO Dr. Johnson Lau said, “We are excited to add Kuur Therapeutics and its innovative allogeneic CAR-NKT technology to the Athenex platform. Kuur’s innovative technology, combined with our TCR program, could propel us into a leadership position in cell therapy. This platform also has the potential to provide synergies with other assets in our pipeline.” (See Athenex stock analysis on TipRanks)

Athenex will pay for $70 million of the purchase through its common stock. The rest of the $115 million consideration consists of milestone payments which can be paid in cash, Athenex shares, or a combination of both at the company’s choosing.

Kuur currently has three product candidates in development: KUR-501, KUR-502, and KUR-503. KUR-501 is targeted for treating neuroblastoma and is in Phase 1 trial at present. Data from this study is expected on May 14.

KUR-502 is also in Phase 1 trial at present, and is being evaluated for treating relapsed and refractory lymphoma and leukemia in adult patients.

Recently, RBC Capital analyst Kennen MacKay reiterated a Buy rating on the stock but lowered the price target to $9 (142.6% upside potential) from $33.

MacKay adjusted the price target in the wake of Athenex’s CRL (complete response letter) notice for Oraxol from the U.S. Food and Drug Administration. He called the FDA’s decision not to approve the drug for marketing in its present form “disappointing,” although he is optimistic about Athenex’s potential upside from approvals and sales of other drugs it produces.

Consensus on the Street is that Athenex is a Moderate Buy based on 5 Buys and 4 Hold. The average analyst price target of $8.67 implies 133.7% upside potential. That’s after the stock has corrected by about 66.5% so far this year.