Document





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): March 13, 2019
 
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:
 
o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o            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 o

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. o
 
 
 










Item 2.02. Results of Operations and Financial Condition.

On March 13, 2019, the Company issued a press release announcing its results for its fourth quarter and year ended December 31, 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 7.01. Regulation FD Disclosure.

On March 13, 2019, 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.

Exhibit No.
  
99.1

99.2










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 J. Milligan
 
 
 
Peter J. Milligan
 
 
 
Chief Financial Officer

Dated: March 13, 2019



Exhibit


Melinta Therapeutics Reports Fourth Quarter and Full-Year
2018 Financial Results

~ Reports Revenue of $96.4 million, Including Net Product Sales of $46.6 million, for the Full-Year 2018 ~

~ Net Product Sales of $14.6 million for the Fourth Quarter of 2018, up 32 Percent from Prior Quarter ~

~ Corporate Milestones Across Commercial Operations, Clinical and Business Development Provide Critical Growth Opportunities ~

~ Provides Guidance for 2019 ~


Morristown, N.J., March 13, 2019 - 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 fourth quarter and full-year ended December 31, 2018. In 2018, Melinta achieved several key milestones within its commercial, development and business development operations critical to positioning the company for long-term growth.

“We are pleased with the decisive actions we took in 2018 to realign the business and help position Melinta for future growth and stockholder value creation. In the past year, the Company has made significant strides to streamline operations and strengthen its balance sheet, while at the same time executing against our sales and clinical goals,” said John H. Johnson, chief executive officer of Melinta. “As a result, we delivered revenues of $96.4 million, driven by $46.6 million in net product sales. In addition, the positive results we reported in 2018 give us confidence in the commercial potential of our products and pipeline.”

“We have several upcoming milestones in 2019, including opportunities to potentially expand product labels and increase our marketing territory. We believe that the Company’s efforts over the past year coupled with our strategic initiatives underway position Melinta to continue leading the global fight against antimicrobial resistance and delivering anti-infective solutions to patients,” continued Johnson.

Fourth Quarter and Full-Year Results
In the fourth quarter, sales of commercial products increased 32% compared to the third quarter of 2018, driven by strong Vabomere® (meropenem and vaborbactam) and Orbactiv® (oritavancin) performance
Delivered full-year 2018 revenues of $96.4 million, including $46.6 million in net product sales
Melinta ended the year with $81.8 million of cash and cash equivalents

Portfolio Updates
Vabomere received European Commission approval in November 2018 for the following indications in adult patients:
Complicated intra-abdominal infections (cIAI)
Complicated urinary tract infections (cUTI)
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
Reported positive top-line results from the Phase III trial of Baxdela® (delafloxacin) for the treatment of adult patients with community-acquired bacterial pneumonia (CABP) in October 2018
Began preparation of supplemental new drug application (sNDA) to the U.S. Food and Drug Administration (FDA) for Baxdela in CABP, which is expected to be filed in the second quarter of 2019
Entered into a commercial agreement with Menarini Group to commercialize Vabomere®, Orbactiv® and Minocin® (minocycline) for injection in 68 countries outside of the U.S. in October 2018






Business Highlights
John H. Johnson named permanent chief executive officer
Closed the initial $75 million disbursement under the previously announced $135 million convertible loan facility from Vatera Healthcare Partners, LLC on February 22, 2019
Implementation of operating cost reduction initiatives expected to deliver significant cost savings in 2019
Strengthened Board of Directors and senior leadership team through new appointments adding beneficial experience and expertise to Melinta
Effected a one-for-five reverse stock split of the Company's common stock on February 22, 2019

“We were pleased to announce the closing and receipt of the initial $75 million disbursement of the $135 million convertible loan facility from Vatera in February 2019,” said Peter Milligan, chief financial officer of Melinta. “We believe this funding, along with existing cash and cash from future revenue, will provide valuable liquidity to support the Company's operations as we continue to take steps to become cash-flow positive. We will continue to exercise disciplined post-integration stewardship of cash resources and spending to achieve significant operating expense savings in 2019.”

2019 Guidance
The Company provides guidance for the full-year 2019 as follows:
Net product sales of approximately $65 million
Gross margin of approximately 55%, including intangible assets amortization
Operating expenses of approximately $140 million

Upcoming Potential Catalysts
Expected sNDA submission to FDA for Baxdela® for treatment of CABP
European Commission approval decision for delafloxacin (to be marketed under the brand name Quofenix) for acute bacterial skin and skin structure infections (ABSSSI)
Country approvals for Baxdela in South America and Central America
Execute Latin America commercialization agreement for Vabomere, Orbactiv and Minocin for injection

Fourth Quarter and Full-Year 2018 Financial Results
Melinta reported revenue of $35.5 million and $96.4 million, respectively, for the fourth quarter and full-year ended December 31, 2018. Revenue from product sales was $14.6 million for the quarter and $46.6 million for the full year, representing the first year of product sales in the Company's history.

in USD millions
Q4 2018

Q4 2017

Full Year 2018

Full Year 2017

Product sales, net
$
14,554

$

$
46,580

$

Contract research
2,776

4,231

11,677

13,959

License
18,159


38,173

19,905

Total revenue *
$
35,489

$
4,231

$
96,430

$
33,864

* Excludes BARDA and Carb-X grant funding included in Other Income of $0.6 million and $5.8 million, respectively, in Q4 2018 and the full-year 2018

Cost of goods sold (“COGS”) was $9.0 million and $41.1 million, respectively, for the fourth quarter ended and full-year ended December 31, 2018, of which $3.9 million and $16.4 million was comprised of non-cash amortization of intangible assets. In addition, for the fourth quarter and full-year ended December 31, 2018, we recorded $1.0 million and $8.0 million, respectively, in charges related to inventory that is approaching shelf life, primarily driven by product launches. There were no product sales and therefore no costs of goods sold in the prior year period.
Research and development (“R&D”) expenses were $10.4 million and $55.4 million, respectively, for the fourth quarter and full-year ended December 31, 2018, compared to $11.6 million and $49.5 million for the same periods in 2017. Selling, general and administrative (“SG&A”) expenses were $29.5 million and $133.3 million for the fourth quarter and full-year ended December 31, 2018, compared to $37.3 million and $63.3 million for the same periods 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 ("IDB") and the Cempra merger. In addition, SG&A included severance-related costs of $8.9 million and $12.3 million, respectively, for the fourth quarter and full-year ended December 31, 2018, as well as an offsetting gain of $8.8 million from the remeasurement of contingent consideration associated with the acquisition of the IDB from The Medicines Company in January 2018. Also, during





the fourth quarter of 2018, we recognized goodwill impairment charges of $25.1 million related to the acquisition of the IDB in the first quarter of 2018.
Net loss was $44.1 million, or $3.94 per share, for the fourth quarter ended December 31, 2018, compared to a net loss of $20.9 million, or $7.40 per share, for the fourth quarter of 2017. Net loss was $157.2 million, or $17.12 per share, for the year ended December 31, 2018, compared to a net loss of $78.2 million, or $109.28 per share, for 2017. Net loss per share year-over-year was impacted by changes in share count as a result of the Cempra merger and financing related to the acquisition of the IDB, as well as a one-for-five reverse stock split effective on February 22, 2019.
Conference Call and Webcast
Melinta’s earnings conference call for the fourth quarter and full-year ended December 31, 2018 will be broadcast at 4:30 p.m. ET on March 13, 2019. 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 1698998. Investors can also access the call at http://ir.melinta.com/events/event-details/melinta-therapeutics-q4-2018-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 # 1698998.

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 fourth quarter and full year 2017 presented in this press release reflects the standalone former private company Melinta until November 3, 2017, 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, impairment charges, bargain purchase gains, gains or losses on extinguishment of debt, acquisition-related costs, gains on the reversal of loss contracts, and other adjustments, including the remeasurement of contingent consideration related to our acquisition of IDB and launch-related excess and obsolete inventory. 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, including statements related to guidance. 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 and include statements regarding: expectations with respect to our financial position, results and performance. 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 for the remaining two disbursements under the loan agreement with Vatera, including any consequences of a failure to close on the two disbursements under the Vatera loan financing; risks related to compliance with the covenants under our facilities with Vatera and Deerfield; uncertainties of cash flows and inability to meet working capital needs as well as other milestone, royalty and payment obligations, including as a result of the outcome of the pending litigation with respect to, and any requirement to make, payments potentially due to The Medicines Company; risks that may arise from the consummation of the Vatera loan financing and the effectiveness of the amendment to the Deerfield facility agreement, including potential dilution to our stockholders and the fact that Vatera will beneficially own a substantial portion of our common stock; the fact that our independent registered public accounting firm’s report on the Company’s 2016, 2017, and 2018 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 the 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; failure to obtain and sustain an adequate level of reimbursement for our products by third-party payors; inaccuracies in our estimates of the market for and commercialization potential of our products; failure to maintain optimal inventory levels to meet commercial demand for any of our products; risks that our competitors are able to develop and market products that are preferred over our products; our dependence upon third parties for the manufacture and supply of our marketed products; failure to achieve the benefits of our recently completed transactions with Cempra and The Medicines Company; failure to establish and maintain development and commercialization collaborations; uncertainty in the outcome or timing of clinical trials and/or receipt of regulatory approvals for our product candidates; undesirable side effects of our products; failure of third parties to conduct clinical trials in accordance with their contractual obligations; our ability to identify, develop, acquire or in-license products; difficulties in managing the growth of our company; the effects of recent comprehensive tax reform; risks related to failure to comply with extensive laws and regulations; product liability risks related to our products; failure to retain key personnel; inability to obtain, maintain and enforce patents and other intellectual property rights or the unexpected costs associated with such enforcement or litigation; risks relating to third party infringement of intellectual property rights; our ability to maintain effective internal control over financial reporting; unfavorable outcomes in any of the class action and shareholder derivative lawsuits currently pending against the Company; and the fact that a substantial number of shares of common stock may be sold into the public markets by one or more of our large stockholders in the near future. 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, 2018, our Revised Definitive Proxy Statement filed January 29, 2019, 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, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
 
December 31,
2018
 
December 31,
2017
Assets
 
 
 
Cash and cash equivalents
$
81,808

 
$
128,387

Receivables
22,485

 
7,564

Inventory
41,341

 
10,825

Prepaid expenses and other current assets
3,848

 
2,988

Total current assets
149,482

 
149,764

Property and equipment, net
1,586

 
1,596

Intangible assets, net
229,196

 
7,500

Other assets
61,326

 
1,413

Total assets
$
441,590

 
$
160,273

Liabilities
 
 
 
Accounts payable
$
16,765

 
$
7,405

Accrued expenses
33,924

 
24,041

Deferred purchase price and other liabilities
78,394

 

Accrued interest on notes payable
4,485

 
284

Warrant liability
38

 

Total current liabilities
133,606

 
31,730

Notes payable, net of debt discount
110,476

 
39,555

Deferred revenue

 
10,008

Other long-term liabilities
7,444

 
6,644

Total long-term liabilities
117,920

 
56,207

Total liabilities
$
251,526

 
$
87,937

 
 
 
 
Shareholders' Equity
 
 
 
Common stock
11

 
4

Additional paid-in capital
909,896

 
644,991

Accumulated deficit
(719,843
)
 
(572,659
)
Total shareholders’ equity
$
190,064

 
$
72,336

Total liabilities and shareholders’ equity
$
441,590

 
$
160,273








Melinta Therapeutics, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
 
Quarter Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
Revenue
 
 
 
 
 
 
 
Product sales, net
$
14,554

 
$

 
$
46,580

 
$

Contract research
2,776

 
4,231

 
11,677

 
13,959

License
18,159

 

 
38,173

 
19,905

Total revenue
35,489

 
4,231

 
96,430

 
33,864

Operating expenses
 
 
 
 
 
 
 
Cost of goods sold
8,989

 

 
41,057

 

Research and development
10,402

 
11,599

 
55,409

 
49,475

Goodwill impairment
25,088

 

 
25,088

 

Selling, general and administrative
29,455

 
37,349

 
133,312

 
63,325

Total operating expenses
73,934

 
48,948

 
254,866

 
112,800

Loss from operations
(38,445
)
 
(44,717
)
 
(158,436
)
 
(78,936
)
Other income (expenses)
 
 
 
 
 
 
 
Interest income
209

 
130

 
730

 
155

Interest expense
(10,847
)
 
(1,859
)
 
(43,179
)
 
(3,608
)
Interest expense on convertible promissory notes

 
 
 

 
(4,016
)
Change in fair value of warrant liability
2,580

 

 
33,226

 
335

Loss on extinguishment of debt

 

 
(2,595
)
 
(607
)
Grant income
577

 

 
5,828

 

Other income and expense
1,806

 
3

 
1,904

 
98

Reversal of loss contract

 

 
5,330

 

Bargain purchase gain

 
27,663

 

 
27,663

Total other income (expense), net
(5,675
)
 
25,937

 
1,244

 
20,020

Net loss
$
(44,120
)
 
$
(18,780
)
 
$
(157,192
)
 
$
(58,916
)
Accretion of convertible preferred stock dividends

 
(2,098
)
 

 
(19,259
)
Net loss available to common shareholders
$
(44,120
)
 
$
(20,878
)
 
$
(157,192
)
 
$
(78,175
)
Basic and diluted net loss per share
$
(3.94
)
 
$
(7.40
)
 
$
(17.12
)
 
$
(109.28
)
Basic and diluted weighted-average shares outstanding
11,203,779

 
2,820,937

 
9,181,668

 
715,369







Melinta Therapeutics, Inc.
Consolidated Statement of Cash Flows
(In thousands)
 
Quarter Ended December 31,
 
Year ended December 31,
 
2018
 
2017
 
2018
 
2017
Operating activities
 
 
 
 
 
 
 
Net loss
$
(44,120
)
 
$
(18,780
)
 
$
(157,192
)
 
$
(58,916
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
4,014

 
83

 
16,901

 
451

Bargain purchase gain

 
(27,663
)
 

 
(27,663
)
Non-cash interest expense
6,361

 
917

 
25,673

 
5,091

Share-based compensation
(576
)
 
4,822

 
3,465

 
6,450

Change in fair value of warrant liability
(2,580
)
 

 
(33,226
)
 
(335
)
Changes in fair value of IDB contingent liabilities
(8,817
)
 

 
(8,817
)
 

Loss on extinguishment of debt

 

 
2,595

 
607

Reversal of loss contract

 

 
(5,330
)
 

Provision for inventory obsolescence
986

 

 
8,042

 

Asset impairment
25,695

 

 
26,076

 

Other

 
56

 

 
70

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Receivables
16,419

 
3,931

 
(5,044
)
 
(3,140
)
Inventory
(6,669
)
 
(4,828
)
 
(17,541
)
 
(10,825
)
Prepaid expenses and other current assets
2,494

 
(322
)
 
2,180

 
600

Accounts payable
503

 
(8,572
)
 
8,285

 
(1,269
)
Accrued expenses
8,457

 
7,736

 
1,445

 
12,014

Accrued interest on notes payable
97

 
9

 
4,202

 
110

Deferred revenues

 

 

 
1,000

Deposits on future inventory purchases
(151
)
 

 
(40,773
)
 

Other non-current assets and liabilities
(2,947
)
 
616

 
(2,486
)
 
157

Net cash used in operating activities
(834
)
 
(41,995
)
 
(171,545
)
 
(75,598
)
Investing activities
 
 
 
 
 
 
 
Cash acquired in merger with Cempra, Inc.

 
161,410

 

 
161,410

IDB acquisition

 

 
(166,382
)
 

Purchases of intangible assets

 
(2,000
)
 
(2,000
)
 
(5,500
)
Purchases of property and equipment
(247
)
 
(58
)
 
(1,690
)
 
(849
)
Net cash provided by (used in) investing activities
(247
)
 
159,352

 
(170,072
)
 
155,061

Financing activities
 
 
 
 
 
 
 
Proceeds from financing under Deerfield arrangement:
 
 
 
 
 
 
 
Proceeds from the issuance of notes payable

 

 
111,421

 
38,844

Costs associated with the issuance of notes payable

 

 
(6,455
)
 

Proceeds from the issuance of warrants

 

 
33,264

 

Proceeds from the issuance of royalty agreement

 

 
1,472

 

Purchase of notes payable disbursement option

 

 
(7,609
)
 

Proceeds from issuance of common stock, net, to lender

 

 
51,452

 

Other financing activities:
 
 
 
 
 
 
 
Proceeds from issuance of common stock, net

 

 
155,273

 

Proceeds from the issuance of convertible promissory notes

 

 

 
24,526






Payment of debt extinguishment fees

 

 
(2,150
)
 
(1,240
)
IDB acquisition deferred payments
(906
)
 

 
(1,633
)
 

Proceeds from the exercise of stock options, net of cancellations

 

 
3

 
88

Repayment of notes payable and other

 
(1,163
)
 
(40,000
)
 
(24,503
)
Net cash provided by (used in) financing activities
(906
)
 
(1,163
)
 
295,038

 
37,715

Net change in cash and equivalents
(1,987
)
 
116,194

 
(46,579
)
 
117,178

Cash, cash equivalents and restricted cash at beginning of the period
83,995

 
12,393

 
128,587

 
11,409

Cash, cash equivalents and restricted cash at end of the period
$
82,008

 
$
128,587

 
$
82,008

 
$
128,587








Melinta Therapeutics
GAAP to Non-GAAP Adjustments
for the Quarters and Full Years Ended December 31, 2018 and 2017
(In thousands)
Three Months Ended December 31, 2018
 
Revenue
Cost of Product Sales
R&D
SG&A
Goodwill impairment
Other Income (Expense), Net
Total
As reported under GAAP
 
$
35,489

$
(8,989
)
$
(10,402
)
$
(29,455
)
$
(25,088
)
$
(5,675
)
$
(44,120
)
EBITDA adjustments:
 
 
 
 
 
 
 
 
Interest expense
 





10,847

10,847

Interest income
 





(209
)
(209
)
Depreciation and amortization
 

3,875

31

108



4,014

Total EBITDA adjustments
 

3,875

31

108


10,638

14,652

EBITDA
 
$
35,489

$
(5,114
)
$
(10,371
)
$
(29,347
)
$
(25,088
)
$
4,963

$
(29,468
)
Other adjustments:
 
 
 
 
 
 
 
 
Stock-based compensation
 

41

110

(727
)


(576
)
Change in fair value of warrant liability
 





(2,580
)
(2,580
)
Impairment charges
 


607


25,088


25,695

Other *
 



(8,817
)


(8,817
)
Total other adjustments
 

41

717

(9,544
)
25,088

(2,580
)
13,722

Adjusted EBITDA
 
$
35,489

$
(5,073
)
$
(9,654
)
$
(38,891
)
$

$
2,383

$
(15,746
)
* Remeasurement of contingent consideration for the acquisition of the infectious disease business from The Medicines Company in January 2018.
 
 
 
 
 
 
 
 
 
Three Months Ended December 31, 2017
 
 
 
 
 
 
 
 
As reported under GAAP
 
$
4,231

$

$
(11,599
)
$
(37,349
)
$

$
25,937

$
(18,780
)
EBITDA adjustments:
 
 
 
 
 
 
 
 
Interest expense
 





1,859

          1,859

Interest income
 





(130
)
            (130)

Depreciation and amortization
 


22

61



             113

Total EBITDA adjustments
 


22

61


1,729

1,812

EBITDA
 
$
4,231

$

$
(11,577
)
$
(37,288
)
$

$
27,666

$
(16,968
)
Other adjustments:
 
 
 
 
 
 
 
 
Stock-based compensation
 


276

4,546



4,822

Acquisition-related costs
 



11,735



11,735

Bargain purchase gain
 





(27,663
)
(27,663
)
Total other adjustments
 


276

16,281


(27,663
)
(11,106
)





Adjusted EBITDA
 
$
4,231

$

$
(11,301
)
$
(21,007
)
$

$
3

$
(28,074
)
 
 
 
 
 
 
 
 
 
Twelve Months Ended December 31, 2018
 
 
 
 
 
 
 
 
As reported under GAAP
 
$
96,430

$
(41,057
)
$
(55,409
)
$
(133,312
)
$
(25,088
)
$
1,244

$
(157,192
)
EBITDA adjustments:
 
 
 
 
 
 
 
 
Interest expense
 





43,179

43,179

Interest income
 





(730
)
(730
)
Depreciation and amortization
 

16,366

183

352



16,901

Total EBITDA adjustments
 

16,366

183

352


42,449

59,350

EBITDA
 
$
96,430

$
(24,691
)
$
(55,226
)
$
(132,960
)
$
(25,088
)
$
43,693

$
(97,842
)
Other adjustments:
 
 
 
 
 
 
 
 
Stock-based compensation
 

80

718

2,667



3,465

Change in fair value of warrant liability
 





(33,226
)
(33,226
)
Loss on extinguishment of debt
 





2,595

2,595

Gain on loss contract reversal
 





(5,330
)
(5,330
)
Acquisition-related costs
 



2,528



2,528

Impairment charges
 


988


25,088


26,076

Other **
 

6,119


(8,817
)


(2,698
)
Total other adjustments
 

6,199

1,706

(3,622
)
25,088

(35,961
)
(6,590
)
Adjusted EBITDA
 
$
96,430

$
(18,492
)
$
(53,520
)
$
(136,582
)
$

$
7,732

$
(104,432
)
** Remeasurement of contingent consideration for the acquisition of the infectious disease business from The Medicines Company in January 2018 and launch-related excess and obsolete inventory.
 
 
 
 
 
 
 
 
 
Twelve Months Ended December 31, 2017
 
 
 
 
 
 
 
 
As reported under GAAP
 
$
33,864

$

$
(49,475
)
$
(63,325
)
$

$
20,020

$
(58,916
)
EBITDA adjustments:
 
 
 
 
 
 
 
 
Interest expense
 





7,624

7,624

Interest income
 





(155
)
(155
)
Depreciation and amortization
 


255

196



451

Total EBITDA adjustments
 


255

196


7,469

7,920

EBITDA
 
$
33,864

$

$
(49,220
)
$
(63,129
)
$

$
27,489

$
(50,996
)
Other adjustments:
 
 
 
 
 
 
 
 
Stock-based compensation
 


651

5,799



6,450

Change in fair value of warrant liability
 





(335
)
(335
)
Acquisition-related charges
 



11,735



11,735

Loss on extinguishment of debt
 





607

607






Bargain purchase gain
 
 




(27,663
)
(27,663
)
Total other adjustments
 


651

17,534


(27,391
)
(9,206
)
Adjusted EBITDA
 
$
33,864

$

$
(48,569
)
$
(45,595
)
$

$
98

$
(60,202
)











For More Information:
Media Inquiries:
Lindsay Rocco
Elixir Health Public Relations
+1 862-596-1304
lrocco@elixirhealthpr.com    
    

Investor Inquiries:
Susan Blum
(312) 767-0296
ir@melinta.com





mlntq4andfullyear2018ear
Fourth Quarter and Full-Year 2018 Earnings Conference Call Melinta Therapeutics, Inc. THE ANTIBIOTICS COMPANY .


 
Cautionary Note Regarding Forward-Looking Statements 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, 2018, and Revised Definitive Proxy Statement filed January 29, 2019. . 2


 
Fourth Quarter and Full-Year 2018 Earnings Conference Call: Agenda 2018 Year in Review John H. Johnson, Chief Executive Officer Fourth Quarter and Full-Year 2018 Financial Results & Guidance Peter Milligan, Chief Financial Officer 2019 Catalysts John H. Johnson, Chief Executive Officer . 3


 
2018 Year in Review John H. Johnson, Chief Executive Officer . 4


 
Melinta in 2018 • Continued integration of Cempra merger and infectious disease business of The Medicines Company Scaled Business • Grew commercial portfolio to four products, including two launch products Operations • Enhanced commercial resources, including experienced anti-infectives sales, medical affairs, marketing, market access and analytics teams • Executed ex-US license agreements • Positive top-line results for Baxdela® CABP Phase III study Clinical and • First ex-US approval of Baxdela in Argentina for ABSSSI Regulatory Progress • Vabomere® received European Commission approval for five indications • Published Tango II results and received NTAP designation for Vabomere • Major cost structure redesign in Q4 will provide significant YOY opex reductions • Secured up to $135M convertible loan funding: Improved Liquidity • Closed first $75M in February 2019 • Remaining $60M expected to be drawn by early July 2019, subject to closing conditions • Plans to secure working capital revolver of up to $20M in Q2 2019 . 5


 
Industry Leading Portfolio of Branded Antibiotics Antibiotics for Serious Infections Broad Spectrum Gram Positive Gram Negative Well-established Single dose treatment Developed to One of a limited quinolone drug class of ABSSSI, incl. those address KPC- number of options caused by MRSA mediated resistance for Acinetobacter Only approved infections fluoroquinolone for Allows for treatment Combines treatment of ABSSSI in outpatient settings meropenem with Established drug- that covers MRSA novel BLI class and well- One time dosing vaborbactam for understood Minimal potential for ensures patient treatment of cUTI utilization patterns drug interactions adherence Largest study Straightforward dosing population of for patients with patients with CRE comorbidities 6


 
Commercial Product Sales Overview Net Product Sales (in millions) FY 2018 Baxdela $6.5 Vabomere 7.4 Orbactiv 23.0 Minocin 9.7 Net Product Sales $46.6 Q4 2018 Net Product Sales up 32% from Q3 2018 Baxdela & Vabomere • Vabomere launched in Q4 2017 – 2nd half grew ~25% vs. 1st half • Q1 2018 initial stocking for Baxdela – consistent growth thereafter Orbactiv & Minocin • Simplified distribution channel in Q2 2018 – reduction in channel inventory but no impact to demand • Growth in the 2nd half leads to an expectation of strong performance in 2019 . 7


 
Fourth Quarter and Full-Year 2018 Financial Results & Guidance Peter Milligan, Chief Financial Officer . 8


 
Q4 2018 Financial Highlights Non- Metrics (in millions) GAAP Comments GAAP Total Revenue $ 35.5 $ 35.5 Excludes BARDA and Carb-X grant funding Net Product Sales 14.6 14.6 Reimbursement of development costs and Contract 2.8 2.8 regulatory support License 18.1 18.1 Regulatory milestones received from partners COGS $ 9.0 $ 5.1 IDB-related intangibles amortization Total Operating Expenses $ 66.9 $ 50.5 R&D 10.8 10.1 Stock comp and impairment charges Adjustments (net gains) to stock comp and IDB SG&A 31.0 40.5 contingent consideration Goodwill Impairment 25.1 -- Impairment charges for IDB-related goodwill . 9


 
Full-Year 2018 Financial Highlights Non- Metrics (in millions) GAAP Comments GAAP Total Revenue $ 96.4 $ 96.4 Excludes BARDA and Carb-X grant funding Net Product Sales 46.6 46.6 Reimbursement of development costs and Contract 11.6 11.6 regulatory support License 38.2 38.2 Regulatory milestones received from partners COGS $ 41.1 $ 24.7 IDB-related intangibles amortization Total Operating Expenses $ 213.8 $ 190.1 R&D 55.4 53.5 Stock comp and impairment charges Adjustments (net gain) to IDB contingent SG&A 133.3 136.6 consideration, partially offset by stock comp, acquisition-related charges Goodwill Impairment 25.1 -- Impairment charges for IDB-related goodwill . 10


 
2019 Guidance Net Product Sales of ~$65M • ~40% YOY growth • Expected growth in all four marketed products Gross margin from products of ~55%, including non-cash amortization Operating Expenses of ~$140M • G&A benefits from full integration of prior year M&A activity • R&D declines due to wind down of CABP study and Discovery Platform • Lower restructuring charges and impairment costs • Lower sales and marketing driven by lower commercial organization build- out costs and launch year marketing spending . 11


 
Key Financial Information Key Metrics As of 12/31/18 Total Cash and Cash Equivalents $81.8 million Gross Long-Term Debt Obligation $147.8 million Basic Shares Outstanding* 11 million Stock Options, Restricted Stock Units and Warrants 1.5 million Outstanding* . *Adjusted for one-for-five reverse stock split; full-year weighted-average share count 9.2 million 12


 
2019 Catalysts John H. Johnson, Chief Executive Officer . 13


 
2019 Potential Catalysts • Label expansion for CABP BAXDELA • European approval ABSSSI • Focus on specialty pharmacy channel, as appropriate • International license opportunities VABOMERE • Leverage NTAP designation • Promote Orbactiv value proposition ORBACTIV • Pursue shorter infusion time for Orbactiv MINOCIN • Minocin registry publication . 14