Loading, Please Wait...
~ 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 (GLOBE NEWSWIRE) -- 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
“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.”
The Company provides guidance for the full-year 2019 as follows:
Upcoming Potential Catalysts
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||$14,554||$—||$46,580||$—|
|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 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 of 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)
|Dec 31,||Dec 31,|
|Cash and cash equivalents||$||81,808||$||128,387|
|Prepaid expenses and other current assets||3,848||2,988|
|Total current assets||149,482||149,764|
|Property and equipment, net||1,586||1,596|
|Intangible assets, net||229,196||7,500|
|Liabilities and Shareholders' Equity|
|Deferred purchase price and other liabilities||78,394||-|
|Accrued interest on notes payable||4,485||284|
|Total current liabilities||133,606||31,730|
|Notes payable, net of debt discount||110,476||39,555|
|Other long-term liabilities||7,444||6,644|
|Total long-term liabilities||117,920||56,207|
|Additional paid-in capital||909,896||644,991|
|Total shareholders' equity||190,064||72,336|
|Total liabilities and shareholders' equity||$||441,590||$||160,273|
Melinta Therapeutics, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
|Product sales, net||$||14,554||$||-||$||46,580||$||-|
|Cost of goods sold||8,989||-||41,057||-|
|Research and development||10,402||11,599||55,409||49,475|
|Selling, general and administrative||29,455||37,349||133,312||63,325|
|Total operating expenses||73,934||48,948||254,866||112,800|
|Loss from operations||(38,445||)||(44,717||)||(158,436||)||(78,936||)|
|Other income (expense):|
|Change in fair value of warrant liability||2,580||-||33,226||335|
|Loss on extinguishment of debt||-||-||(2,595||)||(607||)|
|Gain on loss contract reversal||-||-||5,330||-|
|Bargain purchase gain||-||27,663||-||27,663|
|Total other income (expense), net||(5,675||)||25,937||1,244||20,020|
|Accretion of convertible preferred stock dividends||-||(2,098||)||-||(19,259||)|
|Net loss available to common shareholders||$||(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
Three Months Ended
|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|
|Change in fair value of warrant liability||(2,580||)||-||(33,226||)||(335||)|
|Changes in fair value of IDB contingent consideration||(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||-|
|Changes in operating assets and liabilities:||-|
|Prepaids expenses and other current assets||2,494||(322||)||2,180||600|
|Accrued interest on notes payable||97||9||4,202||110|
|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||)|
|Cash flows from investing activities:|
|Cash acquired in merger with Cempra, Inc.||-||161,410||-||161,410|
|Purchases of intangible assets||-||(2,000||)||(2,000||)||(5,500||)|
|Purchases of property, plant and equipment||(247||)||(58||)||(1,690||)||(849||)|
|Net cash provided by (used in) investing activities||(247||)||159,352||(170,072||)||155,061|
|Cash flows from 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 cash equivalents||(1,987||)||116,194||(46,579||)||117,178|
|Cash and cash equivalents and restricted cash at beginning of period||83,995||12,393||128,587||11,409|
|Cash and cash equivalents and restricted cash at end of period||$||82,008||$||128,587||$||82,008||$||128,587|
GAAP to Non-GAAP Adjustments
for the Quarters and Full-Years Ended December 31, 2018 and 2017
|Three Months Ended December 31, 2018||Revenue||
|As reported under GAAP||$||35,489||$||(8,989||)||$||(10,402||)||$||(29,455||)||$||(25,088||)||$||(5,675||)||$||(44,120||)|
|Depreciation and amortization||-||3,875||31||108||-||-||4,014|
|Total EBITDA adjustments||-||3,875||31||108||-||10,638||14,652|
|Change in fair value of warrant liability||-||-||-||-||-||(2,580||)||(2,580||)|
|Total other adjustments||-||41||717||(9,544||)||25,088||(2,580||)||13,722|
|* 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||$||(18,780||)|
|Depreciation and amortization||-||-||22||61||-||-||83|
|Total EBITDA adjustments||-||-||22||61||-||1,729||1,812|
|Bargain purchase gain||-||-||-||-||-||(27,663||)||(27,663||)|
|Total other adjustments||$||-||$||-||$||276||$||16,281||$||-||$||(27,663||)||$||(11,106||)|
|Twelve Months Ended December 31, 2018|
|As reported under GAAP||$||96,430||$||(41,057||)||$||(55,409||)||$||(133,312||)||$||(25,088||)||$||1,244||$||(157,192||)|
|Depreciation and amortization||-||16,366||183||352||-||-||16,901|
|Total EBITDA adjustments||-||16,366||183||352||-||42,449||59,350|
|Change in fair value of warrant liability||-||-||-||-||-||(33,226||)||(33,226||)|
|Loss on extinguishment of debt||-||-||-||-||-||2,595||2,595|
|Gain on loss contract reversal||-||-||-||-||-||(5,330||)||(5,330||)|
|** Remeasurement of contingent consideration for the acquisition of the infectious disease business from The Medicines Company in January 2018|
|and launch-related excess and obsolete inventory.|
|Twelve Months Ended December 31, 2017|
|As reported under GAAP||$||33,864||$||-||$||(49,475||)||$||(63,325||)||$||-||$||20,020||$||(58,916||)|
|Depreciation and amortization||-||-||255||196||-||-||451|
|Total EBITDA adjustments||-||-||255||196||-||7,469||7,920|
|Change in fair value of warrant liability||-||-||-||-||-||(335||)||(335||)|
|Loss on extinguishment of debt||-||-||-||-||-||607||607|
|Bargain purchase gain||-||-||-||-||(27,663||)||(27,663||)|
For More Information: