Melinta is latest antibiotics biotech to file for bankruptcy as superbug fears mount
US biotech Melinta Therapeutics has become the latest antibiotics specialist to file for bankruptcy, after courts said it could use its lenders’ cash to keep operating until a possible sale to investment firm Deerfield Management Co.
Melinta is the latest in a long list of antibiotics firms that have hit trouble as big pharma is still unwilling to invest in the field, as it does not produce sufficient returns on investment.
Although new antibiotics are badly needed, research has all but ground to a halt because any new drug would be used sparingly to prevent the rise of any new resistant strains.
This means that pharma companies would be unlikely to see any substantial volume of sales of any new antibiotic – but with a lack of new agents coming to market there are mounting fears that global health systems could be overwhelmed by resistant strains and a diminishing number of options to treat them.
There are moves to introduce new funding models for antibiotics, and in England NICE is considering reforms including a “Netflix” subscription model that would ensure drugmakers would be rewarded whether or not their drug is actually used.
But all this is too late for Melinta which said it was filing for Chapter 11 bankruptcy protection last week.
Melinta already has four antibiotics on the market but said last month that it was running out of cash.
The biotech filed for bankruptcy in the District Court of Delaware and said that lenders would buy it by exchanging $140 million under credit arrangements, in return for all of the company’s equity.
Larger drugmakers including AstraZeneca, Novartis, and Sanofi have stopped developing antibiotics and small biotechs in the field are struggling.
Achaogen filed for bankruptcy protection in April last year, less than a year after the FDA approved its antibiotic Zemdri.
Aradigm, another biotech focused on antibiotics, filed for bankruptcy in February last year after failing to raise the cash it needed to further develop its inhaled ciprofloxacin drug for serious lung infections.
The FDA rejected the drug in early 2018 and in February last year maintained its stance that a further clinical trial was needed to settle differences in results between two clinical trials.
It also withdrew a European filing in October after learning that the CHMP scientific committee would likely reject the drug.
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