Deal of the Week: Melinta/The Medicines Co.’s Antibiotics

As part of a previously announced restructuring plan, The Medicines Company (NASDAQ: MDCO) is selling its infectious disease business unit in order to double-down on its promising drug candidate, inclisiran. The drug is currently in Phase 3 development, and completion is expected in the second half of 2019. That’s a long way away, and MDCO needs “sufficient cash and liquidity” to reach the goal line.

That’s why, on November 29, the company announced an agreement to sell its infectious disease business unit, including three marketed antibiotics, Vabomere, Orbactiv® and Minocin IV.

Melinta Therapeutics, Inc. (NASDAQ: MLNT), the buyer, will pay $540 million, as well as tiered royalty payments of 5% to 25% on worldwide net sales of the acquired drugs. The company also assume all royalty, milestone and other payment obligations.

Melinta expects the acquisition will result in a focused portfolio of assets with significant commercial synergies, enabling it to maximize the value associated with the marketed products and drive the company to profitability. On a trailing 12-month basis, the company generated revenue of $271 million and a net loss of $70 million in October 2017.

The deal also bolsters Melinta’s commercial team, which has been built out in preparation for the launch of Baxdela (delafloxacin), with experienced team of anti-infective professionals from The Medicines Company who can drive value across the combined portfolio.

MDCO is betting inclisiran’s potential to be a blockbuster drug for “the millions of at-risk, often non-adherent patients worldwide” who are struggling with high cholesterol. Given the “limitations of available therapies,” the company’s CEO Clive Meanwell said in a press statement, inclisiran could become a dominant competitor in this therapeutic area.

This transaction is expected to close in the first quarter of 2018.

 

 

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