On August 7, 2018 Melinta Therapeutics, Inc. (NASDAQ: MLNT), a commercial-stage company discovering, developing and commercializing novel antibiotics to treat serious bacterial infections, reported financial results and provided an update on commercial activities for the quarter ended June 30, 2018 (Press release, Cempra, AUG 7, 2018, View Source [SID1234528650]). Melinta continued to make progress this quarter in its mission to save lives threatened by the global public health crisis of bacterial infections through the development and commercialization of novel antibiotics that provide new therapeutic solutions.
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Q2 2018 and Recent Business Highlights
Completed the hiring of 71 additional field sales personnel bringing total sales representatives to 170
Completed realignment and cross-training of experienced anti-infective sales force across all four products, including Baxdela (delafloxacin), Vabomere (meropenem and vaborbactam), Orbactiv (oritavancin) and Minocin (minocycline) for Injection
Made strong progress on hospital approval process of new launches, Vabomere and Baxdela
Vabomere granted New Technology Add-On Payment (NTAP) by Centers for Medicare & Medicaid Services (CMS), effective Oct. 1, 2018
Continued growth in retail market for Baxdela, driven by specialty retail focus of our sales force
Completed enrollment ahead of schedule for Baxdela Phase III trial for treatment of adults with community acquired bacterial pneumonia ("CABP")
Entered into partnership with CARB-X, receiving up to approximately $6 million to help advance pre-clinical and clinical development of a novel antibiotic class
Launched new antibiotic stewardship program designed to address the growing threat of antimicrobial resistance
Completed follow-on public offering of shares of common stock, raising approximately $115 million in net proceeds
Demonstrated breadth of commercial and clinical programs with 20 presentations at the American Society of Microbiology’s ASM Microbe 2018 meeting
"Melinta took important steps forward during the second quarter, with solid sales performance from our new launches of Baxdela and Vabomere and the completion of a public follow-on offering of common shares that significantly strengthened our long-term financial position," said Dan Wechsler, President and CEO of Melinta. "Product sales remained steady during the quarter and we continued to make excellent progress on our recent launches. We expect our sales trajectory to increase in the second half of the year, powered by our significantly increased presence in the marketplace and our expanded and now fully cross-trained sales force of 170 highly experienced sales representatives, with average hospital expertise of 15 years."
"We also continued to make advancements within our pipeline during the quarter. Our Phase III trial of Baxdela for the treatment of adults with CABP completed enrollment ahead of schedule and is on track for top-line data by the end of 2018. Our discovery organization also continued to advance their important work following the announcement of our agreement with CARB-X that will provide us funding to advance the development of a novel antimicrobial from our ESKAPE pathogen program."
"With the completion of our public offering, we are now in a strong financial position to support our continued growth."
2018 Upcoming Potential Catalysts
Pivotal Phase 3 data for Baxdela in CABP
Vabomere EMA regulatory approval decision
Vabomere Medicare NTAP status effective Oct. 1, 2018
Additional ex-U.S. submissions for Baxdela in Central and South America
Ex-U.S. partnership opportunities for Vabomere, Orbactiv and Minocin for Injection
Additional data and publications at ID Week
IND-enabling studies for the lead ESKAPE compound
Q2 2018 Financial Results
Melinta reported revenue of $12.0 million for the quarter ended June 30, 2018. In addition, the company earned $2.1 million in funding from the Biomedical Advanced Research and Development Authority (BARDA), which it recorded as other income.
During the quarter, as part of the final stages of the integration of the Infectious Disease business acquired from The Medicines Company, Melinta implemented a new, direct-to-wholesaler distribution process that will shorten the Company’s overall supply chain cycle, reduce inventory levels at wholesalers and save fees paid to wholesalers. The change resulted in a one-time negative impact on second quarter revenues of $2.7 million, primarily impacting Orbactiv.
Second quarter of 2018 total net revenue of $12.0 million compares to total net revenue of $4.0 million for the same period in 2017, prior to the acquisition of The Medicines Company ID business and the launch of Baxdela. In the second quarters of 2018 and 2017, we recognized contract research revenue totaling $2.8 million and $4.0 million, respectively. In the second quarter of 2018, net product sales were $9.2 million. The net product sales reflect solid performance of new launches and include the impact described above of the implementation of the new, direct-to-wholesaler distribution process, which occurred during the quarter and resulted in a one-time negative impact of $2.7 million, primarily impacting Orbactiv.
Excludes BARDA grant funding included in Other Income of $2.1 million
Cost of goods sold ("COGS") was $11.0 million for the quarter ended June 30, 2018, of which $6.7 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. Cost of goods sold also included charges of $2.4 million for Baxdela and Vabomere inventory that is approaching shelf life. Adjusted COGS was $2.0 million, excluding these non-cash charges, resulting in an Adjusted Gross Margin of 84% for the second quarter. There were no product sales and therefore no costs of goods sold in the prior year period.
Research and development ("R&D") expenses were $15.8 million for the quarter ended June 30, 2018, compared to $14.1 million for the same period in 2017. The increase was driven by additional headcount and development activities resulting from the acquisition of the infectious disease business from The Medicines Company and the recent merger with Cempra. Adjusted R&D expenses were $15.6 million, which reflects the adjustment for non-cash expenses of $0.2 million.
Selling, general and administrative ("SG&A") expenses were $34.9 million for the quarter ended June 30, 2018, compared to $7.7 million for the same period in 2017. The increase was driven by additional expenses associated with being a larger, public, commercial organization, including the operational impact of both the acquisition of the infectious disease business from The Medicines Company and the Cempra merger, consisting of additional headcount, facilities and commercial infrastructure. Approximately $1.7 million of SG&A expenses were a result of acquisition-related costs and lease exit costs, resulting in Adjusted SG&A expenses of $32.7 million.
Net loss was $55.8 million, or $1.38 per share, for the quarter ended June 30, 2018 compared to a net loss of $20.4 million 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 infectious disease business from The Medicines Company.
On May 29, 2018, Melinta completed a follow-on public offering of 21.9 million shares of its common stock. The underwriters of the public offering also exercised in full their option to purchase an additional 2.6 million shares of Melinta’s common stock. Net proceeds from the offering were approximately $115.1 million after deducting underwriting discounts and commissions and expenses paid. As of June 30, 2018, Melinta had cash and cash equivalents of $150.1 million.
Q2 2018 and Recent Pipeline and Publication Highlights
20 presentations at ASM Microbe 2018, including pharmacoeconomic analyses of Vabomere and Orbactiv (oritavancin), and analyses showing the rising incidence of Gram-negative pathogens in skin and skin structure infections (SSSIs) and the changes to empiric therapy that may be considered to improve outcomes
12 presentations at the MAD-ID 2018 Annual Meeting, including detailed safety and efficacy findings from the Phase 3 PROCEED studies of Baxdela in patients with Acute Bacterial Skin and Skin Structure Infections (ABSSSI)
Findings from the Orbactiv real-world registry demonstrating efficacy and safety consistent with the Phase 3 SOLO program published in Open Forum Infectious Diseases
12 Presentations at the European Congress of Clinical Microbiology and Infectious Diseases (ECCMID) 2018 including six from Vabomere TANGO-2 trial, as well as new in vitro and in vivo findings for Baxdela and a pyrrolocytosine lead molecule
Pyrrolocytosine compound RX-P2382 against ESKAPE pathogens (Enterococcus faecium, Staphylococcus aureus, Klebsiella pneumoniae, Acinetobacter baumannii, Pseudomonas aeruginosa, Enterobacter species and Escherichia coli) at ECCMID 2018
TANGO-2 Trial at ECCMID 2018, highlighting outcomes in vulnerable patient populations
Discovery Platform Oral Presentations at ECCMID 2018 and ASM Microbe 2018 Highlighting Progress Towards Leads for Drug-resistant Neisseria gonorrhoeae and Multidrug- and Extremely Drug-resistant ESKAPE Pathogens
Conference Call and Webcast
Melinta’s earnings conference call for the quarter ended June 30, 2018 will be broadcast at 8:30 a.m. ET on August 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 9594878. Investors can also access the call at View Source
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 # 9594878.