Melinta Therapeutics closes $197.77 million senior secured facility

By Marisa Wong

Morgantown, W.Va., Jan. 9 – Melinta Therapeutics, Inc. closed $147,774,079 of initial senior secured loans and a $50 million senior secured delayed draw term loan on Jan. 5, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

Melinta had entered into a commitment letter on Nov. 28 with an affiliate of Deerfield Management Co., LP to finance its acquisition of the infectious disease business from The Medicines Co. Deerfield had committed to provide $190 million of senior secured loans and an up to $50 million delayed draw facility, subject to some conditions.

At the closing of the acquisition on Friday, Melinta entered the facility agreement with Deerfield.

The amount of the initial senior secured loans was reduced by the amount of Deerfield’s equity investment. Under the commitment letter, Deerfield had agreed to purchase 9.985% of the number of shares of common stock outstanding immediately after the acquisition for a purchase price of $13.50 per share. At closing of the acquisition, Deerfield purchased 3,127,846 shares for an aggregate purchase price of $42,225,921.

The initial disbursement of $147,774,079 bears interest at a rate of 11.75%. Subsequent disbursements in an amount of up to $50 million, which are conditioned on Melinta having achieved annualized net sales of at least $75 million during the applicable period, will bear interest at a rate of 14.75%.

Melinta is also required to pay the lenders an end-of-term fee or exit fee of 2%.

The principal of the initial disbursement must be paid by Jan. 5, 2024. The loans are not permitted to be prepaid prior to Jan, 6, 2021 and are subject to prepayment fees for prepayments occurring on or after that date.

The facility agreement has a financial maintenance covenant requiring Melinta and its subsidiaries to maintain a minimum cash balance of $25 million and also requires the loan parties to maintain minimum net sales of at least $45 million for the fiscal year ending Dec. 31, 2018, $75 million for the fiscal year ending Dec. 31, 2019 and $100 million for the fiscal year ending Dec. 31, 2020 and each fiscal year ending after that.

Cortland Capital Market Services LLC is the agent.

Melinta is an antibiotics company based in New Haven, Conn.

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