True to a pledge to sell its infectious disease (ID) business before year-end in service of its cardiovascular care ambitions, The Medicines Co. has struck a deal with Melinta Therapeutics Inc., a growing infectious disease player. Melinta, which is paying $215 million in cash, plus $55 million in common stock for the business, will gain three marketed antibiotics in the deal, poising it to gain "strategic scale" and to "focus on multiple valuable segments of the anti-infectives market simultaneously," said President and CEO Dan Wechsler.

The sale provides Medco with fresh funds to advance its PCSK9 candidate, inclisiran, through the anticipated completion of pivotal trials and a make-or-break trial readout in the second half of 2019. Melinta benefits by expanding the breadth of its product portfolio with Vabomere (meropenem and vaborbactam), Orbactiv (oritavancin) and intravenous Minocin (minocycline), just as it prepares to launch its own recently approved antibiotic, Baxdela (delafloxacin). (See BioWorld, Aug. 10, 2017.)

Melinta will make an initial payment to Medco of $165 million at closing as well as issuing $50 million worth of its common stock. Medco will later receive a $25 million payment on the one-year anniversary of the closing and an additional $25 million payment on the 18-month anniversary. The Parsippany, N.J.-based seller will also initially receive low-single-digit royalties on the trio of products sold, growing to the mid-single digits over the next five years.

Melinta is financing the deal through a combination of debt and equity, arranged with Deerfield Management Co.

Presuming the acquisition will close as expected in the first quarter of 2018, Wechsler said his team would focus on several "imperatives" going forward. Commercialization of Baxdela and the company's newly acquired assets is the first of those imperatives, he said, during a conference call held to discuss the deal. Second is to work to expand the reach of the products. That work includes the advancement of an ongoing phase III trial of Baxdela for the treatment of community-acquired bacterial pneumonia in the U.S. and discussions with the EMA regarding the filing of the Vabomere MAA in Europe.

Third, he said, Melinta's discovery team will continue its efforts to bring to market a new class of antibiotics from a platform designed to overcome drug-resistant pathogens, known collectively as ESKAPE pathogens, which cause the majority of life-threatening hospital infections.

Once the acquisition closes, Melinta plans to deploy a sales force of about 135 sales representatives, the company's chief commercial officer, John Temperato, said. The company will also expand its efforts in medical affairs, including publications, health economics and outcomes research, investigator-initiated trials and a medical science liaison program, he said.

Analysts noted some initial concern about the read-through of what was apparently a lower-than-expected up-front fee for the assets to the value of comparable infectious disease companies. But sentiment seemed to converge in agreement on a less-negative interpretation, captured in Leerink analyst Joseph Schwartz's note: "We believe that the difference from the Street's expectations may be more than made up on the back-end via milestones and royalties on commercial sales since Melinta's [management] team has significant experience launching many successful products in the past," he wrote.

By Wednesday's market close, Medco's shares (NASDAQ:MDCO) had recovered from a mid-morning dip, settling just 4 cents lower at $30.17. Shares of Melinta (NASDAQ:MLNT), which joined the public markets through a merger with a subsidiary of Cempra Inc. over the summer, rose about 1.3 percent to $15.20. (See BioWorld Today, June 28, 2016, and Aug. 10, 2017.)

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