Melinta Therapeutics has struck a deal to merge with Cempra. The agreement brings together two of the biotechs plugging away, with mixed success, at late-phase development of anti-infective drugs.
New Haven, Connecticut-based Melinta will emerge from the merger as the dominant partner. Its name will stay above the door and its shareholders will control 52% of the combined company. But, unlike other reverse mergers involving biotechs that have truly hit the skids, Cempra, for better or worse, brings more than just its Nasdaq listing and cash reserves to the union.
Melinta will also get its mitts on Cempra’s pipeline of anti-infectives, including lead candidate solithromycin. Cempra tried to win FDA approval for oral and IV formulations of the antibiotic as treatments for community-acquired bacterial pneumonia last year. But the biotech ran into an agency unwilling to overlook reports of liver toxicity, resulting in a complete response letter.
That led Cempra to kick off a strategic review in March as it tried to figure out the best use for its clinical pipeline and more than $200 million in cash. Melinta emerged as Cempra’s preferred option.
“The combined company’s extensive pipeline, including commercial, clinical and preclinical stage anti-infective programs with multiple products in development across several indications, provides an exceptional platform to deliver potential long-term growth and value for shareholders,” David Zaccardelli, acting CEO of Cempra, said in a statement.
Cempra is continuing to hunt for nondilutive funding to pay for the safety work needed to bring solithromycin to market. That would free Melinta to focus its money on making a commercial success of its recently approved treatment for acute bacterial skin and skin structure infections, Baxdela.
The longer-term plan is to build a portfolio of anti-infectives by winning approvals for Baxdela in other indications and picking up regulatory nods for Cempra drugs including solithromycin and fusidic acid.
Whether the financial returns from these products will ever cover the hundreds of millions of dollars that investors have poured into both companies over the years is another question.