The Parsippany-Troy Hills-based company will receive $270 million in upfront consideration and guaranteed payments, tiered royalty payments of 5 percent to 25 percent on worldwide net sales of Vabomere, Orbactiv and Minocin IV, and the assumption by Melinta of all royalty, milestone and other payment obligations relating to those products.
“Today marks a significant milestone for the company, as we take another step along the strategic pathway we outlined in late 2015,” said Fredric N. Eshelman, executive chairman of The Medicines Co. “Together, the company’s board and management team will work to drive inclisiran forward, while supporting Melinta in maximizing the value of our antibiotic portfolio and creating significant additional value and liquidity for our shareholders through a robust royalty structure on future sales of that portfolio and our ownership of Melinta common stock.”
The transaction is expected to close in the first quarter of next year.
“We believe the transaction announced today will enable us to achieve three critical goals for the company and our shareholders,” said Medicines Co. CEO Clive Meanwell. “First, we expect the transaction, when combined with our previously announced restructuring, to provide sufficient cash and liquidity to advance inclisiran through the anticipated completion of the ongoing Phase III development program and final data readout in the second half of 2019, associated manufacturing development and recruitment with initial follow-up in our cardiovascular outcomes trial — alleviating the need to sell equity in the company.
“Second, the transaction will allow us to optimize and focus our efforts and resources on inclisiran, which we believe has the potential to be a competitively-dominant, blockbuster product for the millions of at-risk, often nonadherent, patients worldwide who continue to struggle with high cholesterol, given the limitations of available therapies,” he continuied. “Third, the transaction recognizes the value of our novel antibiotic products, Vabomere, Orbactiv and Minocin IV, places many of our outstanding employees into Melinta, a highly-capable, pure-play, emerging leader in the antibiotics space, and allows The Medicines Co. and our shareholders to participate in the upside potential of the commercialization of these products.”
Pursuant to the terms of the purchase and sale agreement, Melinta will pay transaction consideration as follows:
- $165 million in cash, paid at the closing.
- Shares of Melinta common stock, with a market value equal to $55 million, issued at closing (one-half of which will be subject to a 180-day lockup).
- $25 million in cash, paid on the 12-month anniversary of the closing.
- $25 million in cash, paid on the 18-month anniversary of the closing.
“We have structured a transaction that benefits the shareholders of both The Medicines Co. and Melinta,” said Melinta CEO and President Dan Wechsler. “I know that, with the team we currently have on board at Melinta, plus the team joining us from The Medicines Co., Melinta will be well-positioned to become the pre-eminent, pure-play antibiotics company serving the entire infectious disease community.”
The percentage on the net sales of Vabomere, Orbactiv and Minocin IV will change based upon the amount sold.
“The consummation of this transaction will create the most value among the options available to the board, and will put the company and its shareholders in a strategically good position,” said Medicines Co. Director Alex Denner. “I commend management for the conclusion of this competitive process. The company now must be laser-focused on capital allocation and operational optimization for inclisiran in order to accelerate shareholder value creation.”
Cadwalader, Wickersham & Taft LLP is serving as legal counsel, and Citi is acting as financial adviser to the company in connection with the transaction.