Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): November 6, 2018

 

 

MELINTA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

DELAWARE   001-35405   45-4440364

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

300 George Street, Suite 301, New Haven, CT   06511
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code (908) 617-1309

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 1.01. Entry Into a Material Definitive Agreement.

On November 6, 2018, Melinta Therapeutics, Inc. (the “Company”) entered into a commitment letter with Vatera Healthcare Partners LLC (“Vatera”), pursuant to which Vatera has committed to purchase shares of the Company’s common stock for an aggregate purchase price of up to $75 million (the “Vatera Commitment Letter”), to be used by the Company for general corporate purposes. The Company has the right to request funding of the commitment prior to December 31, 2018 in an amount not less than $50 million, upon at least 10 business days’ written notice to Vatera. Following delivery of a funding request, the Company and Vatera will negotiate a definitive purchase agreement containing terms that reflect the terms of the Vatera Commitment Letter and such other terms that are mutually acceptable to the Company and Vatera. The purchase price for the shares under the Vatera Commitment Letter will be equal to the lower of (i) the closing price immediately preceding the signing of the Vatera Commitment Letter or (ii) the volume-weighted average price of the Company’s common stock for the 30 trading days immediately preceding the closing under the definitive purchase agreement. The closing under the definitive purchase agreement will be subject to stockholder approval for the increase of the Company’s authorized share capital and the issuance under applicable Nasdaq rules, as well as other customary conditions. Vatera and its assignees will be entitled to registration rights in respect of the shares purchased pursuant to the Vatera Commitment Letter in accordance with the terms of any Registration Rights Agreement between the Company, Vatera and/or its assignees. The foregoing summary of the Vatera Commitment Letter is qualified in its entirety by the full text of the Vatera Commitment Letter, which is attached hereto as Exhibit 10.1, and is incorporated by reference herein.

Item 2.02. Results of Operations and Financial Condition.

On November 7, 2018, the Company issued a press release announcing its results for its third quarter ended September 30, 2018. A copy of the press release is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item 2.02 (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by reference in such filing.

Item 3.02. Unregistered Sale of Equity Securities.

Shares of the Company’s common stock issued to Vatera in connection with the Vatera Commitment Letter, as described in Item 1.01 of this report, which description is incorporated by reference into this Item 3.02, will consist of unregistered shares of common stock. Such shares will be issued in a private placement exempt from registration under 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), because the offer and sale of such securities does not involve a “public offering,” as defined in Section 4(a)(2) of the Securities Act, and other applicable requirements will be met.

Item 7.01. Regulation FD Disclosure.

On November 7, 2018, in connection with the Company’s quarterly earnings call, the Company made available the investor presentation furnished herewith as Exhibit 99.2 to this Current Report on Form 8-K on the Company’s investor website, ir.melinta.com.

The information in this Item 7.01 (including Exhibit 99.2) shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act, or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by reference in such filing. The information contained in, or that can be accessed through the Company’s website, is not a part of this filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

 

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Exhibit
No.
   Description
10.1    Commitment Letter, dated November 6, 2018, by and between Melinta Therapeutics, Inc. and Vatera Healthcare Partners LLC
99.1    Press Release titled “Melinta Therapeutics Reports Third Quarter 2018 Financial Results,” dated November 7, 2018
99.2    Investor Presentation, dated November 7, 2018

 

- 3 -


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Melinta Therapeutics, Inc.
By:  

/s/ Peter Milligan

  Peter Milligan
  Chief Financial Officer

Dated: November 7, 2018

 

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EX-10.1

Exhibit 10.1

November 6, 2018

Melinta Therapeutics, Inc.

300 George Street

Suite 301

New Haven, CT 06511

Re:    Financing Commitment

Ladies and Gentlemen:

1.    Commitment. This letter confirms the commitment of Vatera Healthcare Partners LLC (the “Investor”) to purchase (or cause an assignee permitted by the terms of Section 3 hereof to purchase), at any time and from time to time prior to December 31, 2018 (the “Outside Date”), shares of common stock of Melinta Therapeutics, Inc. (the “Company”), in each case in accordance with and subject to the terms and conditions set forth in Exhibit A (such shares, the “Subject Equity Securities”), for an aggregate purchase price not to exceed Seventy Five Million Dollars ($75,000,000) (such commitment, the “Commitment”), to be used by the Company for general corporate purposes. Notwithstanding anything herein to the contrary, the aggregate liability of the Investor under this letter shall at no time exceed the aggregate amount of the Commitment. For the avoidance of doubt, the obligation of the Investor (or its successors and permitted assigns) to fund the Commitment is subject in all respects to the conditions set forth under the heading “Funding Conditions” in Exhibit A.

2.    Termination. The Investor’s obligation to fund the Commitment shall terminate automatically and immediately upon the earliest to occur of (i) the funding by the Investor or its Assignees of the Commitment in full, (ii) the Outside Date, (iii) the date that the Company has received, following the date hereof, gross proceeds in an aggregate amount equal to or greater than $75,000,000 from one or more equity and/or debt financing(s) from sources other than the Investor and its Assignees, and (iv) the date that a third party acquires all of the capital stock of the Company through merger, purchase or otherwise. Upon such termination pursuant to this Section 2, the Investor shall not have any further obligation or liability hereunder with respect to the Commitment, provided, however that notwithstanding such termination, Sections 4, 5, 6, 7 and 11 shall survive such termination.

3.    Assignment. The Investor may not assign or delegate (whether by operation of law, merger, consolidation or otherwise) its rights, interests or obligations hereunder to any other person or entity without the prior written consent of the Company. Notwithstanding the foregoing but subject to applicable securities laws, the Investor may assign all or a portion of its obligation to fund the Commitment to one or more affiliated investment funds or other co-investors (which co-investors may include, for the avoidance of doubt, third party investors that are not affiliated with the Investor or its affiliates) (any such assignee, an “Assignee”) without obtaining the prior written consent of the Company, but no such assignment shall relieve the Investor of its obligations hereunder. Any attempted assignment not in accordance with the foregoing shall be null and void and of no force or effect.


4.    No Third Party Beneficiaries. Except to the extent set forth in Section 5, this letter shall be binding solely on, and inure solely to the benefit of, the parties hereto and their respective successors and permitted assigns, and nothing set forth in this letter, express or implied, shall be construed to confer upon or give to any person or entity, other than the parties hereto and their respective successors and permitted assigns, any benefits, rights or remedies under or by reason of, or any rights to enforce, the Commitment or any provisions of this letter.

5.    Limited Recourse; Enforcement.

(a)    Notwithstanding anything that may be expressed or implied in this letter or any document or instrument delivered in connection herewith, the Company, by its acceptance of the benefits of the Commitment provided herein, covenants, agrees and acknowledges (i) that no person or entity other than the Investor (and its respective successors and permitted assigns) shall have any obligation hereunder or in connection with the transactions contemplated hereby, (ii) in no event shall the Company seek, and the Company shall cause each of its affiliates not to seek, any damages or any other recovery, judgment, or remedies of any kind, including special, exemplary, consequential, indirect or punitive damages, or damages arising from loss of profits, business opportunities or goodwill, diminution in value or any other losses or damages, whether at law, in equity, in contract, in tort or otherwise, against the Investor or any Specified Person (as defined below), in each case, other than seeking specific performance of the Company’s right to cause the Investor to fund the Commitment in accordance with, and solely to the extent permitted under, the terms and conditions hereof (the “Non-Prohibited Claims”), and (iii) that, notwithstanding that the Investor may be, or any of its successors and permitted assigns may be, a limited liability company, the Company shall have no right of recovery against, and no recourse shall be had against, and no personal liability shall attach to, any of the former, current or future direct or indirect equity holders, controlling persons, stockholders, directors, officers, employees, agents, general or limited partners, managers, members, affiliates, attorneys or other representatives of the Investor or any of the Investor’s successors or assigns or any former, current or future director, officer, employee, direct or indirect equity holder, equity or other financing source, portfolio company, management company, controlling person, agent, general or limited partner, manager, member, stockholder, affiliate, attorney or other representative or successor or assign of any of the foregoing (together with any person or entity to whom any of the foregoing has assigned its obligations hereunder in accordance with the terms hereof, a “Specified Person” and together, the “Specified Persons”), hereunder or under any documents or instruments delivered in connection herewith or in respect of any oral representations made or alleged to have been made in connection herewith or therewith, whether by or through attempted piercing of the corporate (or limited liability company or limited partnership) veil, by or through a proceeding (whether at law, in equity, in contract, in tort or otherwise) by or on behalf of the Company against any Specified Person, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any applicable law, or otherwise, except, for the avoidance of doubt, for its rights to recover from the Investor and its successors and permitted assigns (but not any other person or entity) under and to the extent provided in this letter and any other claims that are Non-Prohibited Claims; it being agreed and acknowledged that, except with respect to the Non-Prohibited Claims, no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any Specified Person for any obligations of the Investor or any of its successors or permitted assigns under this letter or any documents or instruments delivered in connection herewith, in respect of any transaction contemplated hereby or in respect of any

 

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representations made or alleged to have been made in connection herewith or therewith or for any claim (whether at law, in equity, in contract, in tort or otherwise) based on, in respect of, or by reason of such obligations or their creation.

(b)    Subject to Section 5(c), this letter may only be enforced by the Company, and none of the Company’s creditors and no other person or entity that is not a party to this letter shall have any right to enforce this letter or to cause the Company to enforce this letter. The Investor agrees that irreparable damage would occur in the event that any of the provisions of this letter were not performed in accordance with their specific terms or were otherwise breached or threatened to be breached and that the Company shall not be required to provide proof of actual damages or otherwise post or secure any bond in connection with or as a condition to obtaining specific performance as described in this Section 5(b).

(c)    The Specified Persons are express third-party beneficiaries of this Section 5.

6.    Confidentiality. This letter may not be used, circulated, quoted or otherwise referred to in any document (other than any SEC filing required to be made under applicable law, rule or regulation), except with the written consent of the Investor; provided, further, that any party hereto may disclose the existence of this letter to the extent required by any governmental or regulatory authority or as required by applicable law, rule or regulation, so long as the disclosing party (a) promptly notifies the Investor in reasonable detail of the circumstances giving rise to such required disclosure, (b) uses its reasonable best efforts to seek to limit such disclosure and maintain the confidentiality of this letter and the terms and conditions hereof and (c) uses its reasonable best efforts to give the Investor an opportunity to comment on such disclosure and to incorporate such comments therein.

7.    Governing Law; Consent to Jurisdiction.

(a)    This letter (and any claim or controversy arising out of or relating to this letter) shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Delaware.

(b)    Each party hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any Delaware state court, or federal court of the United States of America, in each case sitting in the City of Wilmington, County of New Castle, State of Delaware, and any appellate court from any thereof, in any action, suit or proceeding arising out of or relating to this letter or the transactions contemplated hereby or for recognition or enforcement of any judgment relating thereto, and each party hereby irrevocably and unconditionally: (i) agrees not to commence any such action, suit or proceeding except in such courts; (ii) agrees that any claim in respect of any such action, suit or proceeding may be heard and determined in such Delaware state court or, to the extent permitted by applicable Law, in such federal court; (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action, suit or proceeding in any such Delaware state or federal court; and (iv) waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such

 

3


action, suit or proceeding in any such Delaware state or federal court. Each party agrees that a final judgment in any such action, suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law.

8.    Entire Agreement; Amendments and Waivers. This letter, together with any definitive documentation that the Investor and the Company negotiate and enter into in connection with any funding or draw-down of the Commitment, constitute the entire agreement between the parties hereto with respect to the subject matter hereof and supersede all prior written or oral and all contemporaneous oral agreements and understandings between any of the parties hereto with respect to the subject matter hereof and thereof. This letter may not be amended, and no provision hereof waived or modified, except by an instrument signed by each of the parties hereto.

9.    Interpretation. The titles and captions in this letter are for reference purposes only, and shall not in any way define, limit, extend or describe the scope of this letter or otherwise affect the meaning or interpretation of this letter. The words “including” or any variation thereof means “including, without limitation,” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.

10.    Counterparts. This letter may be executed in one or more counterparts for the convenience of the parties hereto, each of which shall be deemed an original and all of which together will constitute one and the same instrument, and this letter shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto. Delivery of an executed counterpart of a signature page to this letter by facsimile or electronic transmission shall be effective as delivery of a mutually executed counterpart to this letter.

11.    WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS LETTER IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS LETTER OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS LETTER BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.

12.    Severability. If any term or other provision of this letter is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this letter shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner

 

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materially adverse to any party hereto; provided, however, that this letter may not be enforced without giving effect to the provisions in Sections 1, 2, 3, 4 and 5 of this letter (including by giving effect to any maximum dollar amounts set forth therein). Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this letter so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

13.    Representations and Warranties. The Investor hereby represents and warrants to the Company that:

(a)    it has all limited liability company power and authority required to execute, deliver and perform this letter;

(b)    the execution, delivery and performance of this letter have been duly and validly authorized and approved by all necessary action and do not contravene any provision of the Investor’s operating agreement or similar organizational documents or any law binding on the Investor;

(c)    all consents, approvals, authorizations, permits of, filings with and notifications to, any governmental or regulatory authority necessary for the due execution, delivery and performance of this letter by the Investor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any governmental or regulatory authority is required in connection with the execution, delivery or performance of this letter;

(d)    this letter constitutes a legal, valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms, except as may be limited by any bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity;

(e)    the Commitment is less than the maximum amount that the Investor is permitted to invest in any one portfolio investment pursuant to the terms of its organizational or governing documents; and

(f)    the Investor has uncalled capital commitments or otherwise has available funds (including lines of credit) in excess of the Commitment hereunder and all of its other unfunded contractually binding equity commitments that are currently outstanding and, all such commitments and funds necessary for it to fulfill all of its obligations under this letter will be available to it for so long as this letter shall remain in effect.

14.    Registration Rights. The Investor and any Assignee shall be entitled to registration rights in respect of the Subject Equity Securities acquired by the Investor and such Assignee, as applicable, pursuant to this letter, on the same terms and pursuant to and in accordance with any Registration Rights Agreement, to which the Company, such Assignee and/or the Investor is a party (as amended, each a “Registration Rights Agreement” and together, the “Registration Rights Agreements”). The Company hereby acknowledges and agrees that the Registration Rights Agreement to which the Investor or any Assignee is a party shall apply with

 

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respect to the Subject Equity Securities held by the Investor or such Assignee, as applicable, and such Subject Equity Securities shall constitute Registrable Securities (as defined in the applicable Registration Rights Agreement) under the applicable Registration Rights Agreement, mutatis mutandis.

 

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Very truly yours,
INVESTOR:
VATERA HEALTHCARE PARTNERS LLC
By:   Vatera Holdings LLC, as manager
By:  

/s/ Kevin Ferro

    Name: Kevin Ferro
    Title: CEO

 

Signature Page to Vatera Commitment Letter


Accepted and acknowledged:

The Company:

MELINTA THERAPEUTICS, INC.

 

By:  

/s/ John H. Johnson

        Name: John H. Johnson
        Title: Interim Chief Executive Officer

 

Signature Page to Vatera Commitment Letter


Exhibit A

Commitment

 

Commitment:   Up to $75 million
Securities:   Common stock of the Company
Purchase Price Per Share:   The lower of: (i) the closing price immediately preceding the signing of this letter; or (ii) the VWAP of the common stock for the 30 trading days immediately preceding the closing date under the definitive purchase agreement (the “Funding Price”)
Funding Request:   The board of directors of the Company (excluding any directors affiliated with the Investor) will have the authority to request funding of the Commitment in an amount not less than $50 million, prior to the termination of the Commitment, upon at least ten (10) business days’ prior notice to the Investor (the “Funding Request”). The closing of the Commitment shall occur no later than the Outside Date, subject to the satisfaction of the conditions to closing set forth below under “Funding Conditions”. All payments will be made in U.S. dollars by wire transfer of immediately available funds.
Other Investors:   In the event the Company identifies other investors who will participate in the funding alongside the Investor and its Assignees, the Investor (together with its Assignees) shall be entitled to reduce its funded amount on a dollar-for-dollar basis by the aggregate amount funded by such other investors
Funding Conditions:  

-Absence of a “Material Adverse Effect” since the date of this letter (to be defined as a material adverse effect on the Company’s business, assets or condition (financial or otherwise)) and no “Event of Default” under the Company’s senior loan facility

 

-Absence of injunctions, etc.

 

-Common stock remains listed on Nasdaq

 

-Stockholder approval (i) to increase the Company’s authorized share capital and (ii) to approve the issuance under applicable Nasdaq rules

 

-Negotiation and execution of definitive purchase agreement described below under “Definitive Agreement”


Clear Market   The Company will be subject to customary “clear market” restrictions limiting the Company’s ability to conduct other offerings for a period of 90 days following the closing under the definitive purchase agreement
Definitive Agreement:   Following delivery of the Funding Request, the Company and the Investor will negotiate a definitive purchase agreement that provides for rights, obligations, representations, warranties, covenants, indemnities, other conditions and agreements (including on a go forward operating plan) that reflect the terms of the Commitment Letter and such other terms that are mutually acceptable to the Investor and the Company. The Company will reimburse the reasonable and documented expenses of one legal counsel to the Investors and its Assignees.
EX-99.1

Exhibit 99.1

 

LOGO

Melinta Therapeutics Reports Third Quarter 2018 Financial Results

- New Product Launches Continue to Make Progress Setting the Stage for Growth in 2019 -

- Entered Commercial Agreement with Menarini Group to market Vabomere®, Orbactiv® and Minocin® for Injection in 68 Countries Outside the U.S. –

- Positive opinion for Vabomere from the CHMP of the European Medicines Agency (EMA), Recommending Approval for Five Indications –

- Implemented Cost Reduction Initiatives to Reduce Operating Expenses by more than $50 million in 2019 –

- Commitment Received from Vatera Healthcare Partners for up to $75 million in Equity, Drawable at Company’s Option1 -

NEW HAVEN, Conn., November 7, 2018 – Melinta Therapeutics, Inc. (NASDAQ: MLNT), a commercial-stage company, developing and commercializing novel antibiotics to treat serious bacterial infections, today reported financial results and provided a business update for the quarter ended September 30, 2018. Melinta made continued progress during the quarter driven by the achievement of several key milestones within its commercial, R&D and business development operations critical to positioning the company for long-term growth.

Q3 2018 and Recent Business Highlights

 

 

Sales of heavily promoted products increased, with additional signs of recent acceleration

 

 

Baxdela® continued to grow in the retail market, driven by dedicated sales force effort

 

 

Entered into a commercial agreement with Menarini Group to commercialize Vabomere®, Orbactiv® and Minocin® for injection in 68 countries outside of the U.S.

 

 

Published complete results from Phase III TANGO 2 descriptive study of Vabomere, which showed Vabomere was associated with increased clinical cure, and decreased mortality compared to best available therapy

 

 

Received a positive opinion for Vabomere from The Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA), recommending approval for five indications:

 

   

complicated intra-abdominal infections (cIAI)

 

   

complicated urinary tract infections (cUTI)

 

1 

Subject to shareholder approval and customary closing conditions


   

hospital-acquired pneumonia including ventilator associated pneumonia (HAP/VAP)

 

   

bacteraemia that occurs in association with any of these infections

 

   

infections due to aerobic Gram-negative organisms where treatment options are limited

 

 

Announced positive topline results for Baxdela Phase III label expansion study in adult patients with community-acquired bacterial pneumonia (CABP), meeting all key primary and secondary endpoints

 

 

Identified operating cost reductions of greater than $50 million with implementation underway for 2019 impact

“We are taking deliberate and decisive steps to accelerate sales, lower costs and optimize cash,” said John Johnson, Interim CEO and Director of Melinta. “We have undertaken an optimization of our organization to refine our strategic focus on the critical needs of the business, while supporting the momentum of our ongoing launches. This includes initiatives to reduce or eliminate spending within our operations. As a result of these changes, we now expect more than $50 million in operating expense savings for 2019 from our current spending levels.”

“At the same time, we are making progress on our initiatives to drive growth with product sales demonstrating signs of recent acceleration that we are working hard to build upon especially in the outpatient setting. Importantly, we achieved several key milestones, including the agreement with Menarini Group to market Vabomere, Orbactiv and Minocin in 68 countries outside of the U.S., and the reporting of positive results from our Phase III trial of Baxdela for the treatment of adult patients with CABP. In addition, the recommendation by the CHMP for approval of Vabomere by the EMA for five indications was highly encouraging and brings us one step closer to providing access to this important treatment option for patients in Europe. We have much work ahead, but we are moving forward with urgency to drive profitable growth and shareholder value,” continued Johnson.

“From a financial perspective, we have received a funding commitment from Vatera Healthcare Partners, our largest shareholder, of up to $75.0 million in equity,” said Peter Milligan, Chief Financial Officer of Melinta. “Drawing on this option will help support the company as we enter 2019 and approach a number of contractual obligations and payments related to the acquisition of The Medicines Company’s infectious disease business earlier this year.”

Upcoming Potential Catalysts

 

   

Vabomere European Commission marketing authorization approval decision

 

   

sNDA submission to FDA for Baxdela for treatment of CABP

 

   

Quofenix (Baxdela) European Marketing Authorization approval decision

 

   

Country approvals for Baxdela in South America and Central America


   

Execute Latin America commercialization agreement for Vabomere, Orbactiv and Minocin

 

   

Additional accretive business development opportunities

Q3 2018 Financial Results

Melinta reported revenue of $34.1 million for the quarter ended September 30, 2018. In addition, the company earned $0.5 million in funding from the Biomedical Advanced Research and Development Authority (BARDA), which it recorded as other income.

 

in USD millions

   Q3 2018      Q3 2017  

Product sales, net

   $ 11.0      $ —    

License revenue

   $ 20.0      $ —    

Contract revenue

     3.0        3.2  
  

 

 

    

 

 

 

Total net revenue *

   $ 34.1    $ 3.2  
  

 

 

    

 

 

 

 

*

Excludes BARDA grant funding included in Other Income of $0.5 million in Q3 2018

Cost of goods sold (“COGS”) was $13.4 million for the quarter ended September 30, 2018, of which $10.4 million was comprised of non-cash amortization of intangible assets and the step-up basis in inventory acquired from The Medicines Company in January 2018 and charges for inventory that is approaching shelf life. There were no product sales and therefore no costs of goods sold in the prior year period.

Research and development (“R&D”) expenses were $13.1 million for the quarter ended September 30, 2018, compared to $10.9 million for the same period in 2017. Selling, general and administrative (“SG&A”) expenses were $34.3 million for the quarter ended September 30, 2018, compared to $10.3 million for the same period in 2017. R&D and SG&A expenses increased primarily as a result of the additional costs associated with the acquisition of The Medicines Company infectious disease business and the Cempra merger.

Net loss was $27.9 million, or $0.50 per share, for the quarter ended September 30, 2018 compared to a net loss of $19.6 million, or $857.35 per share, for the same period in 2017. Net loss per share is impacted by changes in our share count as a result of the Cempra merger and financing related to the acquisition of The Medicines Company infectious disease business.

Conference Call and Webcast

Melinta’s earnings conference call for the quarter ended September 30, 2018 will be broadcast at 8:30 a.m. ET on November 7, 2018. The live webcast can be accessed under “Events and Presentations” in the Investor Relations section of Melinta’s website at www.melinta.com.

Investors wishing to participate in the call should dial: 877-377-7553 and international investors should dial: 253-237-1151. The conference ID is 2096564. Investors can also access the call at http://ir.melinta.com/events/event-details/melinta-therapeutics-q3-2018-earnings-call.


A live webcast of the call will be available online from the Investor Relations section of the company website at www.melinta.com and will be archived there for 30 days. A telephone replay of the call will be available by dialing 855-859-2056 for domestic callers or 404-537-3406 for international callers and entering the conference ID # 2096564.

About Melinta Therapeutics

Melinta Therapeutics, Inc. is the largest pure-play antibiotics company, dedicated to saving lives threatened by the global public health crisis of bacterial infections through the development and commercialization of novel antibiotics that provide new therapeutic solutions. Its four marketed products include Baxdela® (delafloxacin), Vabomere® (meropenem and vaborbactam), Orbactiv® (oritavancin), and Minocin® (minocycline) for Injection. This portfolio provides Melinta with the unique ability to provide providers and patients with a range of solutions that can meet the tremendous need for novel antibiotics treating serious infections. Visit www.melinta.com for more information.

As more fully described in our Annual Report on Form 10-K for the year ended December 31, 2017, the former private company Melinta was determined to be the accounting acquirer in our November 2017 reverse merger with Cempra and, accordingly, historical financial information for the third quarter of 2017 presented in this press release reflects the standalone former private company Melinta and, therefore, period-over-period comparisons may not be meaningful.

Non-GAAP Financial Measures

To supplement our financial results presented on a U.S. generally accepted accounting principles, or GAAP, basis, we have included information about non-GAAP adjusted EBITDA, a non-GAAP financial measure, as a useful operating metric. We believe that the presentation of this non-GAAP financial measure, when viewed with our results under GAAP and the accompanying reconciliation, provides supplementary information to analysts, investors, lenders, and our management in assessing the Company’s performance and results from period to period. This non-GAAP measure closely aligns with the way management measures and evaluates the Company’s performance. This non-GAAP financial measure should be considered in addition to, and not a substitute for, or superior to, net income or other financial measures calculated in accordance with GAAP. Non-GAAP Adjusted EBITDA is not based on any standardized methodology prescribed by GAAP and represents GAAP net income (loss), which the Company believes is the most directly comparable GAAP measure, adjusted to exclude interest income, interest expense, depreciation and amortization, stock-based compensation expense, changes in the fair value of our warrant liability, gain or loss on extinguishment of debt, acquisition-related costs, and other adjustments, including severance, lease exit costs and gain on the reversal of a loss contract. Non-GAAP financial measures used by us may be calculated differently from, and therefore may not be comparable to, non-GAAP measures used by other companies.


Cautionary Note Regarding Forward-Looking Statements

Certain statements in this communication constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act and are usually identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act and are making this statement for purposes of complying with those safe harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations, strategies or prospects will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control.

Risks and uncertainties for Melinta include, but are not limited to, the fact that we have incurred significant operating losses since inception and will incur continued losses for the foreseeable future; our limited operating history; our need for future capital and risks related to our ability to obtain additional capital to fund future operations; risks related to the satisfaction of the closing conditions under the Vatera equity commitment letter, to the extent drawn by the Company, including receipt of stockholder approval; uncertainties of cash flows and inability to meet working capital needs as well as other milestone, royalty and payment obligations; the fact that our independent registered public accounting firm’s report on the Company’s 2016 and 2017 financial statements contains an explanatory paragraph that states that our recurring losses from operations and our need to obtain additional capital raises substantial doubt about our ability to continue as a going concern; our substantial indebtedness; risks related to our commercial launches of our products and our inexperience as a company in marketing drug products; the degree of market acceptance of our products among physicians, patients, health care payors and the medical community; the pricing we are able to achieve for our products; and the other risks referenced in the paragraph below. Many of these factors that will determine actual results are beyond Melinta’s ability to control or predict.

Other risks and uncertainties are more fully described in our Annual Report on Form 10-K for the year ended December 31, 2017, and in other filings that Melinta makes and will make with the SEC. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The statements made in this press release speak only as of the date stated herein, and subsequent events and developments may cause our expectations and beliefs to change. While we may elect to update these forward-looking statements


publicly at some point in the future, we specifically disclaim any obligation to do so, whether as a result of new information, future events or otherwise, except as required by law. These forward-looking statements should not be relied upon as representing our views as of any date after the date stated herein.


Melinta Therapeutics

Condensed Consolidated Balance Sheets

 

     September 30,
2018
    December 31,
2017
 
     (in 000s)  

Assets

    

Cash and cash equivalents

   $ 83,795     $ 128,387  

Trade receivables

     8,073       —    

Other receivables

     30,831       7,564  

Inventory

     36,028       10,825  

Prepaid expenses and other current assets

     6,343       2,988  
  

 

 

   

 

 

 

Total current assets

     165,070       149,764  

Property and equipment, net

     2,312       1,596  

In-process research and development

     19,859       —    

Other intangible assets

     217,616       7,500  

Goodwill

     17,757       —    

Other assets

     59,688       1,413  
  

 

 

   

 

 

 

Total assets

   $ 482,302     $ 160,273  
  

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

    

Accounts payable and accrued expenses

   $ 42,050     $ 31,446  

Warrant liability

     2,617       —    

Current deferred purchase price and contingent consideration

     46,103       —    

Contingent milestone paymentss

     28,500       —    

Accrued interest on notes payable

     4,389       284  
  

 

 

   

 

 

 

Total current liabilities

     123,659       31,730  

Notes payable, net of debt discount

     108,976       39,555  

Deferred revenues

     —         10,008  

Deferred purchase price and contingent consideration

     12,626       —    

Other long-term liabilities

     2,261       6,644  
  

 

 

   

 

 

 

Total liabilities

     247,522       87,937  

Stockholders’ equity

    

Common stock

     56       22  

Additional paid-in capital

     910,447       644,973  

Accumulated deficit

     (675,723     (572,659
  

 

 

   

 

 

 

Total stockholders’ equity

     234,780       72,336  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 482,302     $ 160,273  
  

 

 

   

 

 

 

The Company has recorded goodwill and intangible assets, as well as deferred and contingent consideration, in connection with the acquisition of the infectious disease business from The Medicines Company on a preliminary basis and based on its best estimates. The Company will record adjustments as necessary as it completes the valuation process, which may impact the value of intangible assets and related amortization expense included in our financial statements. Under GAAP, the Company has one year to finalize the purchase accounting for the acquisition.


Melinta Therapeutics

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2018     2017     2018     2017  
     (in 000s)     (in 000s)  

Revenue

        

Product sales, net

   $ 11,028     $ —       $ 32,026     $ —    

License revenue

     20,014       —         20,014       19,905  

Contract revenue

     3,036       3,191       8,901       9,728  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     34,078       3,191       60,941       29,633  

Operating expenses

        

Cost of goods sold

     13,393       —         32,068       —    

Research and development

     13,065       10,884       45,007       37,876  

Selling, general and administrative

     34,287       10,304       103,857       25,976  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     60,745       21,188       180,932       63,852  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (26,667     (17,997     (119,991     (34,219

Other income (expense):

        

Interest income

     248       7       521       25  

Interest expense

     (11,477     (2,381     (32,332     (5,765

Change in fair value of warrant liability

     4,172       701       30,646       335  

Loss on extinguishment of debt

     —         —         (2,595     (607

Other income

     62       34       98       95  

Reversal of loss contract

     5,330       —         5,330       —    

Grant income

     472       —         5,251       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense), net

     (1,193     (1,639     6,919       (5,917
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (27,860   $ (19,636   $ (113,072   $ (40,136
  

 

 

   

 

 

   

 

 

   

 

 

 

Accretion of convertible preferred stock dividends

     —         (5,720     —         (17,161
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss available to common shareholders

   $ (27,860   $ (25,356   $ (113,072   $ (57,297
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted net loss per share

   $ (0.50   $ (857.35   $ (2.66   $ (1,975.69
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted weighted-average shares outstanding

     56,012,537       29,575       42,501,123       29,001  
  

 

 

   

 

 

   

 

 

   

 

 

 


Melinta Therapeutics

Condensed Consolidated Statement of Cash Flows

 

     Nine Months Ended
September 30,
 
     2018     2017  
     (in 000s)  

Net loss

   $ (113,072   $ (40,136

Adjustments to reconcile net loss to net cash used in operations:

    

Depreciation and amortization

     12,887       368  

Non-cash interest expense

     19,312       4,174  

Share-based compensation

     4,041       1,628  

Change in fair value of warrants

     (30,646     (335

Loss on disposal of assets

     —         14  

Loss on extinguishment of debt

     2,595       607  

Reversal of loss contract

     (5,330     —    

Provision for inventory obsolescence

     7,056       —    

Asset impairment

     381       —    

Changes in operating assets and liabilities:

    

Receivables

     (21,463     (7,071

Inventory

     (10,872     (5,997

Deposits on inventory

     (40,622     —    

Prepaids and other assets/liabilities

     148       1,463  

Accounts payable and accrued expenses

     4,875       11,682  
  

 

 

   

 

 

 

Net cash used in operating activities

     (170,710     (33,603

Cash flows from investing activities:

    

IDB acquisition

     (166,383     —    

Purchases of intangible assets

     (2,000     (3,500

Purchases of property, plant and equipment

     (1,443     (791
  

 

 

   

 

 

 

Net cash used in investing activities

     (169,826     (4,291

Cash flows from financing activities:

    

Proceeds from the issuance of common stock, net

     206,728       95  

Proceeds from the issuance of debt instruments

     111,421       40,000  

Proceeds from issuance of convertible notes payable

     —         24,526  

Principal payments on notes payable

     (40,000     (24,503

IDB acquisition deferred payments

     (727     —    

Proceeds from issuance of warrants

     33,263       —    

Proceeds from upfront royalty agreement

     1,473       —    

Prepaid notes payable disbursement put option

     (7,609     —    

Debt extinguishment costs

     (2,150     (1,240

Debt issuance costs

     (6,455     —    
  

 

 

   

 

 

 

Net cash provided by financing activities

     295,944       38,878  

Net change in cash and cash equivalents

     (44,592     984  

Cash and cash equivalents and restricted cash at beginning of period

     128,587       11,409  
  

 

 

   

 

 

 

Cash and cash equivalents and restricted cash at end of period

   $ 83,995     $ 12,393  
  

 

 

   

 

 

 


Melinta Therapeutics

GAAP to Non-GAAP Adjustments

for the Three and Nine Months Ended September 30, 2018 and September 30, 2017

 

Three Months Ended September 30, 2018

   Revenue      Cost of
Product Sales
    R&D     SG&A     Other Income
(Expense), Net
    Total  

As reported under GAAP

   $ 34,078      $ (13,393   $ (13,065   $ (34,287   $ (1,193   $ (27,860

EBITDA adjustments:

             

Interest expense

     —          —         —         —         11,477       11,477  

Interest income

     —          —         —         —         (248     (248

Depreciation and amortization

     —          6,048       46       92       —         6,186  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total EBITDA adjustments

     —          6,048       46       92       11,229       17,415  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     34,078        (7,345     (13,019     (34,195     10,036       (10,445

Other adjustments:

             

Stock-based compensation

     —          22       231       1,324       —         1,577  

Change in fair value of warrant liability

     —          —         —         —         (4,172     (4,172

Gain on loss contract reversal

     —          —         —         —         (5,330     (5,330

Acquisition-related costs

     —          —         —         172       —         172  

Other*

     —          4,334       —         —         —         4,334  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other adjustments

     —          4,356       231       1,496       (9,502     (3,419
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 34,078      $ (2,989   $ (12,788   $ (32,699   $ 534     $ (13,864

Three Months Ended September 30, 2017

             

As reported under GAAP

   $ 3,191        $ (10,884   $ (10,304   $ (1,639   $ (19,636

EBITDA adjustments:

             

Interest expense

     —            —         —         2,381       2,381  

Interest income

     —            —         —         (7     (7

Depreciation and amortization

     —            56       57       —         113  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total EBITDA adjustments

     —            56       57       2,374       2,487  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     3,191          (10,828     (10,247     735       (17,149

Other adjustments:

             

Stock-based compensation

     —            146       372       —         518  

Change in fair value of warrant liability

     —            —         —         (701     (701

Loss on extinguishment of debt

     —            —         —         —         —    
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other adjustments

   $ —          $ 146     $ 372     $ (701   $ (183
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 3,191        $ (10,682   $ (9,875   $ 34     $ (17,332

Nine Months Ended September 30, 2018

             

As reported under GAAP

   $ 60,941      $ (32,068   $ (45,007   $ (103,857   $ 6,919     $ (113,072

EBITDA adjustments:

             

Interest expense

     —          —         —         —         32,332       32,332  

Interest income

     —          —         —         —         (521     (521

Depreciation and amortization

     —          17,406       153       246       —         17,805  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total EBITDA adjustments

     —          17,406       153       246       31,811       49,616  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     60,941        (14,662     (44,854     (103,611     38,730       (63,456

Other adjustments:

             

Stock-based compensation

     —          39       608       3,394       —         4,041  

Change in fair value of warrant liability

     —          —         —         —         (30,646     (30,646

Loss on extinguishment of debt

     —          —         —         —         2,595       2,595  

Gain on loss contract reversal

     —          —         —         —         (5,330     (5,330

Acquisition-related costs

     —          —         —         1,260       —         1,260  

Other*

     —          6,687       —         555       —         7,242  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total adjustments

   $ —        $ 6,726     $ 608     $ 5,209     $ (33,381   $ (20,838
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 60,941      $ (7,936   $ (44,246   $ (98,402   $ 5,349     $ (84,294

Nine Months Ended September 30, 2017

             

As reported under GAAP

   $ 29,633        $ (37,876   $ (25,976   $ (5,917   $ (40,136

EBITDA adjustments:

             

Interest expense

     —            —         —         5,765       5,765  

Interest income

     —            —         —         (25     (25

Depreciation and amortization

     —            233       135       —         368  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total EBITDA adjustments

     —            233       135       5,740       6,108  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     29,633          (37,643     (25,841     (177     (34,028

Other adjustments:

             

Stock-based compensation

     —            271       809       —         1,080  

Change in fair value of warrant liability

     —            —         —         (335     (335

Loss on extinguishment of debt

     —            —         —         607       607  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total adjustments

   $ —          $ 271     $ 809     $ 272     $ 1,352  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 29,633        $ (37,372   $ (25,032   $ 95     $ (32,676

* “Other” reflects charges that we recorded for certain inventory approaching shelf life as well as lease exit charges for one of our vacated facilities.


For More Information:

 

Media Inquiries:

David Belian

(203) 848-6276

  

Investor Inquiries:

Lisa DeFrancesco

(908) 617-1358

EX-99.2

Slide 1

THE ANTIBIOTICS COMPANY . Q3 2018 Earnings Conference Call Melinta Therapeutics, Inc. Exhibit 99.2


Slide 2

This presentation contains forward-looking statements that involve a number of risks and uncertainties. All statements other than statements of historical facts contained in this presentation, including statements regarding our strategy, future operations, future financial position, future cash flows, future revenue, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We are under no obligation (and expressly disclaim any such obligation) to update or revise any forward-looking statement that may be made from time to time, whether as a result of new information, future developments or otherwise. Risks and uncertainties for Melinta Therapeutics, Inc. (the “Company”) are more fully described in the Company’s recent filings with the SEC, including but not limited to its Annual Report on Form 10-K for the year ended December 31, 2017 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 or September 30, 2018. . Cautionary Note Regarding Forward-looking Statements


Slide 3

Q3 2018 Earnings Conference Call: Agenda Introduction and Business Update John Johnson, Interim President and CEO Baxdela Phase III Study Summary Sue Cammarata, MD, Chief Medical Officer Financial Results and Outlook Peter Milligan, CFO Conclusion and 2018 Catalysts John Johnson, Interim President and CEO .


Slide 4

Accelerating sales Realigning our cost base to enhance profitability Strengthening our balance sheet to increase financial flexibility Taking Actions to Optimize our Operations We are refining our strategy to capitalize on the future growth opportunities inherent in our business by: . We are Making Deliberate and Decisive Changes


Slide 5

Executing on Broad Based Value Enhancing Initiatives . Accelerating Sales While we have missed our projections for sales, recent trends are encouraging Vabomere continues to experience steady growth in demand and formulary access Initiatives underway to reallocate resources to expand the outpatient reach for Baxdela Capitalize on recent trends of accelerated demand related to Orbactiv and consistent performance of Minocin Realigning Cost Base Driving cost savings primarily by lower R&D and SG&A costs Initializing a process to scale back in our investment in discovery research activities Expect greater than $50 million in operating expense reductions for 2019 compared with 2018 Strengthening Balance Sheet Commitment from Vatera Healthcare Partners for up to $75 million in equity drawable at company’s option (1) Business development to leverage infrastructure Evaluating all cash obligations to give us flexibility to grow and expand (1) Subject to stockholder approval and customary conditions


Slide 6

Q3 and Recent Business Highlights * Excludes $0.5 million BARDA grant funding included in Other Income . Revenue Growth $34.1 million of net revenue* in Q3 $11.0 million of net product sales Revenue includes ~$20.0 million up-front fee for licensing ex-U.S. rights to Vabomere, Orbactiv and Minocin to Menarini Group Operational Initiatives Optimized organization with focus on lowering costs, growing sales and enhancing cash position Capitalize on recent accelerating sales trends while reducing operating costs of more than $50 million for 2019 Commercial Growth Entered into a commercial agreement with Menarini Group Agreement to commercialize Vabomere, Orbactiv and Minocin in 68 countries outside of the U.S. Clinical and Regulatory Progress Vabomere received positive opinion from CHMP of the EMA for five indications, was granted NTAP status by CMS, effective Oct. 1, 2018 and had complete TANGO-2 results published in October Baxdela received 1st Latin American Approval October in Argentina Reported positive top line results for Phase III study for Baxdela in CABP


Slide 7

Executing on Commercial Program Goals John Johnson, Interim President & Chief Executive Officer .


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VABOMERE®: Continues Steady Progress Setting the stage for growth in 2019 27 3 10 17 24 1 8 15 22 29 5 12 19 26 2 9 16 23 2 9 16 23 30 6 13 20 27 4 11 18 25 1 8 15 22 29 6 13 20 27 3 10 17 24 31 7 14 21 28 OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG   SEPT 2017 2018 Source: Company data Over 300 formulary approvals; 50% increase from Q2 to Q3 > 98 % formulary acceptance rate 40% increase in ordering accounts from Q2-Q3 YTD 64% of accounts reordering Medicare NTAP status effective Oct. 1, 2018 Cumulative Accounts Ordering


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jan feb mar apr may jun jul aug sep BAXDELA®: Increasing Momentum in Q3 Source: Company data 200 million patients have access Accessible or on formulary at 138 hospitals CUMULATIVE HEALTH CARE PROFESSIONALS (HCPS) PRESCRIBING CUMULATIVE ACCOUNTS ORDERING 17 different specialties prescribing for ABSSSI Non Retail Business increases 68% Q2 to Q3 2.1x 73% increase in retail prescribing (DOT) Q2 to Q3 Realigned resources to further accelerate this growth jan feb mar apr may jun jul aug sep 1.7x .


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ORBACTIV®: Growth Accelerating Into Fourth Quarter Source: Company data Over 100 new accounts in 3Q ~70% of volume purchased by the hospital Growth driven by increased number of accounts ordering and increased orders from established accounts Value based contracting . 14% GROWTH IN VOLUME 9 MONTHS YTD VS. SAME PERIOD LAST YEAR Continued growth expected with strategic initiatives and competitive stockout


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Source: Company data . Boxes Sold By Quarter Minocin®: Steady Growth Continues Consistent Fuel for the Commercial Engine


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Baxdela Phase III CABP Study Results Summary Sue Cammarata, MD, Chief Medical Officer .


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Phase 3 Study Design CABP ML-3341-306 Moxifloxacin IV to Oral Switch 400 mg (QD) IV for at least 3 active doses then 400 mg capsule (QD) IF MRSA confirmed, PI may switch to Linezolid STUDY DAYS -1 to 1 Early Clinical Response (ECR) KEY EVALUATIONS 24 hrs (+/-4) after last dose 96 hrs (± 24 hrs) after 1st dose Test of Cure (TOC) Follow Up End of Treatment Or Early Term Screening Baseline 5-10 days after last dose Day 28 (+/-2) ClinicalTrials.gov Identifier: NCT02679573 859 Adult Male and Female Patients hospitalized with radiographic evidence of CABP Randomized 1:1 Delafloxacin IV to Oral Switch 300 mg IV (BID) for at least 6 doses then 450 mg tablet (BID) . Linezolid 600 mg IV (BID) Primary Efficacy Endpoint: Early Clinical Response Improvement at 96h in at least 2 of the following: Chest pain Frequency /severity of cough Amount of productive sputum Difficulty breathing IV to Oral Switch was at Discretion of Investigator Total IV and Oral dosing was 5-10 days Baxdela (delafloxacin) is not approved in any market for the treatment of CABP.


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Key Primary and Secondary Endpoint Intent-To-Treat (IT) ML-3341-306 Endpoint D-M ∆ (CI) ECR -0.2 (-4.4, 4.1) Success 0.8 (-3.3, 4.8) 390 431 384 428 % with response 383 431 381 428 . *ECR: Early Clinical Response at 96 h **TOC: Investigator Assessment of Success at Test of Cure 5-10 days after treatment Baxdela (delafloxacin) is not approved in any market for the treatment of CABP.


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Study ML-3341-306 Delafloxacin was Well Tolerated in Patients with CABP . Overall rate of AEs, regardless of causality: delafloxacin 30.5% vs moxifloxacin 26.2% These events were mild to moderate in nature; did not lead routinely to discontinuation of delafloxacin therapy Treatment related events: 15.2% delafloxacin vs 12.6% moxifloxacin Most common AEs on delafloxacin: diarrhea (3.7%) and transaminase increase (2.6%) Rate of hepatic laboratory elevations >5X upper limit of normal at any timepoint: 1.4% for delafloxacin compared to 1.6% for moxifloxacin (highest post baseline value) No increase in Adverse Events of Special Interest (that have been associated with quinolones, regardless of causality) for delafloxacin compared to moxifloxacin: delafloxacin 7.9% vs moxifloxacin 7.5% There were no events of hypoglycemia, myopathy, neuropathy, seizures, tendon disorders, or QT prolongation in delafloxacin-treated patients No significant nausea or vomiting No requirements for food restriction Mortality at day 28 showed no significant imbalance: 8 deaths on delafloxacin and 6 deaths on moxifloxacin Baxdela (delafloxacin) is not approved in any market for the treatment of CABP.


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Q3 Financial Results & Guidance Peter Milligan, Chief Financial Officer .


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Q3 2018 Financial Highlights Metrics (in millions) GAAP Non-GAAP Comments Total Net Revenue $34.1 $34.1 Excludes BARDA grant funding Product 11.0 11.0 Contract 3.1 3.1 License 20.0 20.0 COGS 13.4 3.0 Deal-related amortization and inventory dating charges Total Operating Expenses $47.4 $45.5 R&D 13.1 12.8 Stock comp and depreciation SG&A 34.3 32.7 Stock comp, Merger/Integration Costs . Anticipate ORBACTIV and MINOCIN for Injection to Achieve Net Sales of ~$32 million for FY 2018


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Key Financial Information Key Metrics (unaudited) As of 9/30/18 Total Cash, Cash Equivalents and Marketable Securities $83.8 million(1) Gross Long-term Debt Obligation $147.8 million Basic Shares Outstanding* 56 million Stock Options, Restricted Stock Units and Warrants Outstanding 9 million *Full year projected weighted average share count expected to be approximately 46 million . (1) Does not include Menarini upfront payment of ~$20 million


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Optimizing Our Cost Base to Enhance Profitability . We are taking immediate action to reduce costs: Lower R&D expenses driven by key successful trial completions and reduced Discovery efforts Lower G&A expenses driven by lower one-time integration costs and achieving targeted synergies from the combination of three companies Lower selling expenses driven by moving past initial market access, marketing launch, market research expenses and rationalizing sales force overhead costs Anticipated greater than $50 million in operating expense savings reductions for 2019 driven primarily by lower R&D and G&A(1) Focused on optimizing cash to become a strong, standalone cash flow positive company 1. When compared with 2018


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Closing and Catalysts John Johnson, Interim President & Chief Executive Officer .


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2018 and Early 2019 Potential Catalysts . CORPORATE/ BD Capitalize on positive, accelerating sales momentum Leveraging existing infrastructure, enhancing cash position, examining future contractual obligations Engaging in business development activities to broaden product line BAXDELA Capitalize on recent momentum to accelerate sales Initiatives underway to expand outpatient reach File sNDA for CABP indication in first half 2019 Additional approvals in Latin America and EU anticipated in 2019 VABOMERE Continued formulary acceptance and accelerating sales Recent publication of TANGO-2 results European Commission Marketing Authorization decision and anticipated launch in EU


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Revised Strategy for Growth and Value Creation . Our Goal: Create a Cash Flow positive company through a strategy that focuses on excellence in Development and Commercialization Accelerate Sales Baxdela outpatient initiative Moving beyond launch phase with Vabomere Lower Costs Optimize the three companies operations Reducing discovery research Business Development External innovation to leverage commercial and development capabilities Capital efficient profitable growth