Melinta emerges from bankruptcy under Deerfield affiliates’ ownership

By Caroline Salls

Pittsburgh, April 20 – Melinta Therapeutics, Inc. and Deerfield Management Co., LP announced Monday that Melinta has completed its financial restructuring and emerged from Chapter 11 bankruptcy.

According to a news release, in accordance with its pre-negotiated plan of reorganization, Melinta is now privately owned by affiliates of Deerfield and has eliminated its debt obligations, resulting in a well-financed and strongly positioned anti-infectives company with plans for future growth.

Melinta’s plan was confirmed on April 11 by the U.S. Bankruptcy Court for the District of Delaware.

Last month, the company received court approval to assume a restructuring support agreement reached with lenders Deerfield Private Design Fund III, LP and Deerfield Private Design Fund IV, LP.

Under the restructuring agreement, the supporting lenders will acquire the company as a going concern by exchanging $140 million of secured claims arising under its senior credit facility for 100% of the equity to be issued by reorganized Melinta under a pre-negotiated Chapter 11 plan of reorganization.

In accordance with the agreement, the supporting lenders will consent to the company’s continued use of its existing cash and cash equivalents, which will provide Melinta the liquidity necessary to operate its business.

The plan calls for payment in full of administrative, priority tax, other priority and other secured claims. The treatment of remaining claims and interest will depend on the outcome of Melinta’s sales and marketing process.

The supporting lenders will receive 100% of the equity interests in reorganized Melinta in full satisfaction of their secured pre-bankruptcy credit agreement claims.

Holders of general unsecured claims will receive no distribution, and all interests in Melinta Therapeutics will be cancelled, extinguished and discharged.

Melinta said it will continue to supply, distribute and support its four marketed products for the treatment of antibiotic-resistant infections, which include Vabomere, Orbactiv, Minocin for Injection and Baxdela.

In addition, with its new, solid financial footing, the company said it expects to enhance its portfolio with the addition of new commercial and clinical-stage pipeline candidates in support of its mission of serving the critical needs of patients in the hospital and hospital ecosystem.

“We welcome this partnership with Deerfield in continuing to best serve the needs of patients in the hospital and look forward to the new opportunities for innovation and growth that this partnership will bring,” the interim chief executive officer and director of reorganized Melinta, Jennifer Sanfilippo, said in the release.

In partnership with the Melinta team, Deerfield said it intends to leverage its operational, business development, data analytics and market research expertise in order to continue to accelerate the growth and expansion of Melinta’s product portfolio.

“The Melinta team has demonstrated an ability to successfully deliver important antibiotics to treat serious infections and has shown resilience and dedication during the most challenging of times,” Deerfield partner Jonathan Leff said in the release.

“Covid-19 is a wake-up call regarding the dangers of infectious diseases and the need for innovative anti-infective products to serve the public health. We are delighted to join Melinta in this journey.”

Melinta is an antibiotics company based in New Haven, Conn. The company filed bankruptcy on Dec. 27 under Chapter 11 case number 19-12748.

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