Date: 2018-01-08
Type of information: Pipeline acquisition
Acquired company: The Medicines Company's infectious diseases business unit (USA - NJ)
Acquiring company: Melinta Therapeutics (USA)
Amount: $270 million
Terms:
- • On January 8, 2018, The Medicines Company announced the closing of the sale of its infectious disease business unit to Melinta Therapeutics for consideration consisting of $215 million of guaranteed cash, approximately 3.3 million shares of Melinta common stock, tiered royalty payments of 5% to 25% 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.
- • On November 29, 2017, The Medicines Company announced that it has entered into a definitive agreement to sell its infectious disease business unit to Melinta Therapeutics for $270 million in upfront consideration and guaranteed payments ($215 million of guaranteed cash and $55 million of Melinta common stock), tiered royalty payments of 5% to 25% 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.
- The transaction is expected to close in the first quarter of 2018, subject to customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the receipt of Melinta shareholder approval for the issuance of Melinta common stock to the Company and in connection with its financing for the transaction. Holders of a majority of Melinta’s outstanding common stock have entered into binding agreements to vote in favor of the transaction.
- Cadwalader, Wickersham & Taft LLP is serving as legal counsel, and Citi is acting as financial advisor, to the Company in connection with the transaction.
- 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; and
- Royalties on net sales of Vabomere, Orbactiv and Minocin IV as follows:
- U.S. net sales of Vabomere: On net sales above $50 million and at or below $100 million = 5.0%
- On net sales above $100 million and at or below $200 million = 7.5%
- On net sales above $200 million and at or below $500 million = 15.0%
- On net sales above $500 million = 25%
- U.S. combined net sales of Minocin IV and Orbactiv: On net sales at or below $100 million = 5.0%
- On net sales above $100 million = 15.0%
- Ex-U.S. combined net sales of Vabomere, Orbactiv and Minocin IV
- On all net sales, including all milestone and royalty payments or other consideration received from ex-U.S. transfers of rights with respect to the products = 15.0%
- The Medicines Company’s rights to receive royalty payments are transferable to a third party, including in connection with a royalty monetization transaction
Details:
Related: infectious diseases
Is general: Yes
