Drugmaker Melinta, Co-Founded by Nobel Winner, Files Bankruptcy
Drugmaker Melinta, Co-Founded by Nobel Winner, Files Bankruptcy
(Bloomberg) -- Melinta Therapeutics Inc., a bio-pharmaceutical company specializing in infectious disease treatment, filed for Chapter 11 bankruptcy in Delaware with plans to continue operating.
Melinta listed as much as $500 million in assets and up to $500 million in liabilities in its bankruptcy petition. Founded in 2000 by scientists including Nobel Prize winner Thomas Steitz, the company sells drugs that treat MRSA, urinary tract and other bacterial infections.
The drugmaker has reached a restructuring agreement with secured lenders from Deerfield Private Design Fund III LP and Deerfield Private Design Fund IV LP, who would acquire 100% of the equity in the reorganized company in exchange for $140 million of secured claims under a senior credit facility, according to a regulatory filing and company statement. Melinta will also consider competitive bids for its assets or business beyond the deal with creditors, and aims to close a transaction by the end of the first quarter of 2020.
A representative for Melinta didn’t immediately respond to requests for comment.
Weakened Profits
“We are confident that this process will secure new ownership of the business with the financial resources to support the company’s antibiotics portfolio and ensure these potentially life-saving products continue to get to patients in need,” interim Chief Executive Officer Jennifer Sanfilippo said in the statement.
Profitability for drugmakers like Melinta has been weakening because infectious disease doctors, wary of promoting resistance, are reluctant to introduce new antibiotics until they’re absolutely needed.
In November, Melinta said that limited liquidity and insufficient revenues would likely make a Chapter 11 necessary, according to a quarterly filing. In the event of bankruptcy, stockholders would be entitled to little to no recovery, the company said at the time. Shares of Morristown, New Jersey-based Melinta fell as much as 74% Friday morning.
The case is Melinta Therapeutics Inc., 19-12748, U.S. Bankruptcy Court for the District of Delaware
To contact the reporter on this story: Olivia Rockeman in New York at orockeman1@bloomberg.net
To contact the editors responsible for this story: Rick Green at rgreen18@bloomberg.net, Nicole Bullock, Boris Korby
©2019 Bloomberg L.P.