Business Segment, Geographic, and Concentration Risk Information

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Business Segment, Geographic, and Concentration Risk Information

16. Business Segment, Geographic, and Concentration Risk Information

The Company has three operating segments, which are organized based mainly on the nature of the business activities performed and regulatory environments in which they operate. The Company also considers the types of products from which the reportable segments derive their revenue (only applicable to two reportable segments). Each operating segment has a segment manager who is held accountable for operations and has discrete financial information that is regularly reviewed by the Company’s chief operating decision-maker. Consequently, the Company has concluded each operating segment to be a reportable segment. The Company’s operating segments are as follows:

Oncology Innovation Platform— This operating segment performs research and development on certain of the Company’s proprietary drugs, from the preclinical development of its chemical compounds, to the execution and analysis of its several clinical trials. It focuses specifically on cell therapy programs and the Orascovery research platform.

Global Supply Chain Platform— This operating segment includes APS, a manufacturing company that supplies sterile injectable drugs to hospital pharmacies across the U.S. APS manufactures products under Section 503B of the Compounding Quality Act within the Federal Food, Drug & Cosmetic Act (“FDCA”). Additionally, APS provides tirbanibulin product to our partners and provides products for the development and manufacturing of the Company’s proprietary drug candidates as well as providing the Company with a cGMP analytical services function.

Commercial Platform— This operating segment includes APD, which focuses on the manufacturing, distribution, and sales of specialty pharmaceuticals. This segment provides services and products to external customers based mainly in the U.S.

The Company’s Oncology Innovation Platform segment operates and holds long-lived assets located in the U.S., Hong Kong, mainland China, the United Kingdom, and Latin America. The Global Supply Chain Platform segment operates and holds long-lived assets located in the U.S. The Commercial Platform segment operates and holds long-lived assets located in the U.S. For geographic segment reporting, product sales have been attributed to countries based on the location of the customer.

Segment information is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Total revenue:
Oncology Innovation Platform	$	5,730		$	307		$	6,504		$	20,970
Global Supply Chain Platform		6,263			4,887			13,056			11,221
Commercial Platform		19,943			15,791			42,653			29,050
Total revenue for reportable segments		31,936			20,985			62,213			61,241
Intersegment revenue		(420	)		(287	)		(1,555	)		(1,391	)
Total consolidated revenue	$	31,516		$	20,698		$	60,658		$	59,850

Intersegment revenue eliminated in the above table for the three and six months ended June 30, 2022 reflects $0.4 million and $1.6 million in sales from the Global Supply Chain Platform to the Oncology Innovation Platform.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Total revenue by product group:
License fees	$	5,723	$	296	$	6,490	$	20,953
Commercial product sales		25,347		19,970		53,271		38,033
Contract manufacturing revenue		439		427		883		857
Other revenue		7		5		14		7
Total consolidated revenue	$	31,516	$	20,698	$	60,658	$	59,850

Intersegment revenue is recognized by the selling segment when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. Upon consolidation, all intersegment revenue and related cost of sales are eliminated from the selling segment’s ledger.

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Net loss attributable to Athenex, Inc.:
Oncology Innovation Platform	$	(18,062	)	$	(20,122	)	$	(47,947	)	$	(25,563	)
Global Supply Chain Platform		(3,324	)		(576	)		(4,096	)		(542	)
Commercial Platform		(2,430	)		(10,208	)		(497	)		(26,135	)
Segment total		(23,816	)		(30,906	)		(52,540	)		(52,240	)
Discontinued operations		(8,341	)		(3,368	)		2,963			(7,084	)
Total consolidated net loss attributable to    Athenex, Inc.	$	(32,157	)	$	(34,274	)	$	(49,577	)	$	(59,324	)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Total depreciation and amortization:
Oncology Innovation Platform	$	125	$	224	$	337	$	438
Global Supply Chain Platform		243		266		499		542
Commercial Platform		301		461		634		1,006
Segment total		669		951		1,470		1,986
Discontinued operations		42		242		215		481
Total consolidated depreciation and    amortization	$	711	$	1,193	$	1,685	$	2,467

	June 30,		December 31,
	2022		2021
Total assets:
Oncology Innovation Platform	$	112,759	$	131,432
Global Supply Chain Platform		19,143		19,693
Commercial Platform		63,443		53,113
Segment total		195,345		204,238
Discontinued operations		26,542		63,210
Total consolidated assets	$	221,887	$	267,448

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Total revenue:
United States	$	31,509	$	20,679	$	60,644	$	59,323
Other foreign countries		7		19		14		527
Total consolidated revenue	$	31,516	$	20,698	$	60,658	$	59,850

	June 30,		December 31,
	2022		2021
Total property and equipment, net:
United States	$	3,757	$	4,196
China		437		985
Total consolidated property and equipment, net	$	4,194	$	5,181

Customer revenue and accounts receivable concentration amounted to the following for the identified periods. These customers relate to the Commercial Platform segment and the Global Supply Chain Platform segment.

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Percentage of total revenue by customer:
Customer A		18	%		0	%		10	%		33	%
Customer B		16	%		15	%		14	%		14	%
Customer C		15	%		16	%		15	%		16	%
Customer D		13	%		13	%		13	%		13	%

	June 30,			December 31,
	2022			2021
Percentage of total accounts receivable by customer:
Customer A		27	%		35	%
Customer B		23	%		29	%
Customer C		17	%		2	%
Customer D		12	%		15	%