Melinta Therapeutics, a drugmaker in Morristown, New Jersey, that calls itself “the largest pure-play antibiotics company,” has filed for bankruptcy.
It’s yet another grim development in the antibiotics industry, which continues to suffer setbacks as big pharma firms shutter their antibiotics divisions and smaller firms struggle to stay afloat.
Melinta sells four antibiotics: Baxdela (delafloxacin), Orbactiv (oritavancin), Minocin (minocycline), and Vabomere (meropenem and vaborbactam). In the first 9 months of 2019, Melinta posted $41 million in sales, up 29% from the same period in 2018, largely because of higher sales of Baxdela and Vabomere.
Yet the firm had also amassed nearly $1 billion in debt as of Sept. 30. Some of it stems from loans Melinta took on to buy The Medicines Company’s infectious disease business, which included Orbactiv, Minocin, and Vabomere.
Melinta warned investors of its potential demise in its last quarterly report and forecast “significant losses” for the next 12 months. Its stock has fallen continually for the past 2 years, from about $80 per share to 50 cents after the bankruptcy announcement.
The company now plans to hand itself over to Deerfield Management, a health-care investment firm, through a Chapter 11 bankruptcy that will keep Melinta operating during a reorganization. Deerfield provided $190 million in debt and equity funding to Melinta for the drugs it acquired from The Medicines Company.
Melinta was the third antibiotics-focused firm to file for bankruptcy in 2019. Aradigm, a Hayward, California–based company developing inhalable liposomal formulations of the antibiotic ciprofloxacin, filed in February.
And in April, South San Francisco–based Achaogen headed to bankruptcy court. It auctioned off its lab equipment and its recently approved antibiotic Zemdri (plazomicin) for $16 million in the summer. QiLu Antibiotics Pharmaceutical bought the rights to Zemdri in China, and Cipla USA bought them for everywhere else. Achaogen had begun selling Zemdri to treat complicated urinary tract infections in July 2018, but by the end of 2018, it had yielded only $800,000 in sales.
A statement released by the Infectious Diseases Society of America says Melinta’s bankruptcy “underscores the need for swift federal government support and incentives to ensure the availability of effective antibiotics.”