infectiousNEW HAVEN: Melinta Therapeutics, Inc. [NASDAQ: MLNT] has entered an agreement to acquire the infectious disease business from The Medicines Co. [NASDAQ: MDCO]. The acquisition includes the purchase of three marketable products - recently approved and launched Vabomere (vaborbactam/meropenem), and established commercial products Orbactiv (oritavancin), and Minocin IV (minocycline).

Melinta expects this transaction to create a “focused portfolio of high-value marketed assets with noteworthy commercial synergies.” Adding, “the combined infectious disease product portfolio of Melinta and The Medicines would enhance Melinta's multi-channel strategy of delivering antibiotic solutions for ABSSSI (acute bacterial skin and skin structure infections) and gram-negative infections within the hospital, emergency department, and community settings.”

The company will pay a $265 million plus potential royalties for the drugs.

A cash payment of $165 million and the issuance of approximately $50 million worth Melinta common stock to The Medicines and additional payments of $25 million by Melinta at each of the twelve and eighteen month anniversaries of the closing date. Additionally Melinta will pay unannounced royalty payments based on the sales volumes of the acquired drugs.

Melinta intends to fund the transaction by a mix of debt and equity. At the time of closing, Melinta will enter into a Loan and Security Agreement with Deerfield Management Co. L.P. Deerfield “will initially provide a total of $190 million in debt and equity financing,

Subsequently, they will grant an additional $50 million of debt to Melinta within 24 months of the acquisition close upon the achievement of certain sales thresholds.”

Apart from the Deerfield funding, some investors have “committed to make a $30 million equity investment at closing. These would be utilized towards the initial cash acquisition price of $165 million and to pay off the existing debt of $40 million.”

Melinta recently became a public company through the merger with Cempra. The company also recently received FDA approval for the commercial launch of Baxdela (delafloxacin) this year, a drug to fight infectious disease. [New Haven Biotech Get FDA Approval] The company’s release asserts to the additional products will help the “commercial team” in their efforts to market Baxdela.

Dan Wechsler, President and Chief Executive Officer (CEO) at Melinta, explained that “the acquired assets would prove to be an ideal complement to Melinta's existing business. This would enable the Company to focus on multiple valuable segments of the anti-infectives market simultaneously.”

   A cash payment of $165 million and the issuance of approximately $50 million worth Melinta common stock to The Medicines, divided by 90% of the volume weighted average price for the trailing 10 trading-day period ending 3 trading days prior to closing;

   A payment of $25 million by Melinta to The Medicines at each of the twelve and eighteen month anniversaries of the closing date; and

   Royalty payments from Melinta to The Medicines, depending upon the tiered net sales of the acquired products in certain jurisdictions.

Transaction Funding Details

   Melinta intends to fund the transaction by a mix of debt and equity. At the time of closing, Melinta will enter into a Loan and Security Agreement with Deerfield Management Co. L.P., wherein Deerfield, and certain funds managed by Deerfield, will initially provide a total of $190 million in debt and equity financing.

   Subsequently, they will grant an additional $50 million of debt to Melinta within 24 months of the acquisition close upon the achievement of certain sales thresholds.

   Apart from the Deerfield funding, some investors have also committed to make a $30 million equity investment at closing. These would be utilized towards the initial cash acquisition price of $165 million and to pay off the existing debt of $40 million.