BY Richard Summerfield
Antibiotics maker Melinta Theraputics has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of Delaware.
The company, which has four antibiotic treatments on the market, has been sounding the alarm about the state of its finances since November. In a quarterly filing Melinta said that limited liquidity and insufficient revenues would likely make a Chapter 11 necessary. Melinta listed $500m in assets and up to $500m in liabilities in its bankruptcy petition.
The drug maker has reached a restructuring agreement with secured lenders from Deerfield Private Design Fund III LP and Deerfield Private Design Fund IV LP, which would acquire 100 percent of the equity in the reorganised company in exchange for $140m of secured claims under a senior credit facility, according to a regulatory filing and company statement.
“While we have successfully conserved cash and enhanced revenue over the past several quarters, we nevertheless anticipate challenges in meeting the Company’s obligations, including near-term compliance with certain covenants,” said Jennifer Sanfilippo, interim chief executive officer. “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. We sincerely thank our employees and partners for their commitment to the antibiotics space, our business, and the patients we serve.”
Melinta is the latest firm in the antibiotics space to experience financial difficulty in recent years. In April 2019, biopharmaceutical company Achaogen filed for bankruptcy less than a year after the FDA approved a new antibiotic seen as an important weapon against carbapenem-resistant Enterobacteria infections, which are among the most difficult bacterial infections to treat.
Many new antibiotics have struggled to generate financial returns in recent years, which has caused several larger drug manufacturers to abandon antibiotic development altogether, in turn creating an opportunity for smaller companies. Unfortunately, many of these firms, Melinta included, have struggled.
News: Antibiotics maker Melinta files for Chapter 11 bankruptcy