Another antibiotic maker bites the dust, as Tetraphase is swallowed for cheap
Some four years after it reported its first batch of pivotal trial data, Tetraphase finally secured FDA approval for its lead antibiotic, eravacycline, for complicated intra-abdominal infections in 2018. But like many of its peers, merely securing approval was only the first hurdle.
The bigger obstacle was reaping the returns in a “broken” market for antibiotics. On Monday, the Massachusetts-based company said it was being acquired by AcelRx in an all-stock deal valued at a paltry $14.4 million.
In 2019, the drug — branded as Xerava — generated a mere $3.6 million in net sales. Tetraphase, like Achaogen and Melinta, saw its value go up in smoke as feeble sales frustrated growth. On August 27, 2018, when the company announced Xerava’s approval, its stock $TTPH was valued at $61.40. On Friday, the company’s shares closed at $1.45.
The AcelRx buyout saw the stock plummet further into penny stock territory — the shares were trading at 87 cents on Monday morning.
Under the deal, Tetraphase stockholders will receive 0.6303 of an AcelRx share for each share of Tetraphase common stock, as well as one contingent value right (CVR), which would entitle the holders to receive aggregate payments of up to $12.5 million for Xerava net sales milestones starting in 2021.
The deal, which comes about two months after the company raised about $17.5 million in a public financing, was approved by both sets of shareholders and is expected to close in the second quarter.
As it stands, the antibiotic market is cursed — it harbors the stink of multiple bankruptcies, a dearth of innovation and is consequently barely whetting the voracious appetites of Big Pharma or venture capitalists. The Tetraphase announcement comes less than a month after bankrupt antibiotic company Aradigm turned to old partner/investor Grifols for a final $3 million fire sale.