Cempra plans to combine with Melinta Therapeutics, a merger that provides a new path forward for the Chapel Hill, NC, firm following the FDA’s surprising rejection of its lead drug late last year.
Meanwhile, privately held Melinta, based in New Haven, CT, will gain a public stock listing through the deal as it prepares to launch its first product. According to the agreement announced Wednesday morning, Cempra (NASDAQ: CEMP) shareholders will own 48 percent of the combined company and Melinta shareholders will own 52 percent. The combined company will keep the Melinta name and appoint a new CEO.
Cempra has been assessing its options after the FDA rejected its drug solithromycin last December. Cempra developed its drug to help combat bacterial drug resistance and the company identified community-acquired bacterial pneumonia as its first target. But in rejecting the drug, the FDA flagged the risk of liver injury and called on Cempra to conduct another Phase 3 trial enrolling 9,000 patients.
Melinta’s first drug was approved by the FDA in June. Delafloxacin (Baxdela), available in both intravenous and pill forms, treats complicated bacterial skin infections, including methicillin-resistant Staphylococcus aureus (MRSA). The company sees broader applications for that drug. Melinta is also testing delafloxacin in a Phase 3 clinical trial enrolling patients with community-acquired bacterial pneumonia and plans to start a separate clinical trial in patients with complicated urinary tract infection. The company’s pipeline includes a potential antibiotic treatment for acne. Melinta has also been developing a new class of antibiotics to fight “superbugs” based on technology licensed from Yale University.
Though Cempra and Melinta are both pursuing some of the same disease targets, their drugs come from different classes of antibiotics. Melinta’s delafloxacin belongs to a group of antibiotics called fluoroquinolones. While these drugs have been effective, they have also been linked to side effects, such as the increased risk of tendonitis or tendon rupture. Cempra’s drugs are called macrolides. The company developed its drug pipeline to offer a safer alternative to fluoroquinolones.
Cempra earlier this year reported positive Phase 3 clinical trial results for another drug, fusidic acid. The company had been testing that drug as a treatment for aggressive skin infections, such as MRSA.
Despite the FDA’s rejection of solithromycin, Cempra remains committed to the drug. The company says it has been talking with pharmaceutical companies and government bodies as potential partners that could fund the additional studies needed to refile for FDA approval. Since 2013, Cempra has been working with the federal government under a $58 million contract from the Biomedical Advanced Research and Development Authority. BARDA is interested in the drug’s potential to treat children and provide a defense against pathogens.
The boards of directors of both Cempra and Melinta have already approved the merger. The companies expect to close the transaction in the fourth quarter, subject to shareholder approvals. If either Cempra or Melinta pulls out of the agreement, it would trigger a $7.9 million termination fee payable to the other company.