Targanta Therapeutics (NASDAQ:TARG), the Cambridge, MA-based biotech firm that saw its value sink last month after the FDA decided not to approve its lead antibiotic oritavancin as a treatment for MRSA and other infections, has agreed to be acquired by drug maker The Medicines Company, the proposed buyer says.
The Medicines Company (NASDAQ:MDCO) said yesterday that it would acquire 100 percent of Targanta’s common stock for $2 per share or $42 million in cash, plus additional cash payments contingent on regulatory approvals of oritavancin and sales milestones. Oritavancin, which must undergo more late-stage clinical trials before the FDA will consider its approval again, could help address the growing demand for drugs to combat antibiotic-resistant infections, a market that reached $1.1 billion in 2007, said Clive Meanwell, chairman and CEO of Parsippany, NJ-based The Medicines Company, in a statement.
Both companies’ boards of directors have approved the buyout deal, but Targanta shareholders must approve the deal, The Medicines Company says.
The buyout could expedite what has already been a rapid evolution of Targanta. The company, originally based in Montreal, was formed in 2005 when it licensed oritavancin from California biotech firm InterMune. The company tapped Boston-area biotech veteran Mark Leuchtenberger to be its CEO in 2006, and he promptly moved the firm’s headquarters to Cambridge and led it through its $57.5 million initial public offering the following year.
Targanta’s fortunes changed late last year when an FDA panel decided not to recommend oritavancin for approval as a treatment for certain skin and tissue infections. And last month the FDA took the panel’s advice and declined to approve the antibiotic, telling the company that it needed to do further patient studies to prove its effectiveness and safety.
The company cut 75 percent of its staff, or about 60 workers, last month to conserve cash and realign its focus from its anticipated commercial launch of oritavancin this year to conducting more clinical trials for the drug.