Low sales, high cost: Melinta slashes HQ research staff as it struggles to grow antibiotics revenue
Look to Melinta Therapeutics for the latest sign of economic trouble in the antibiotics field.
Exactly a year after the Connecticut drugmaker executed a $270 million pact to buy out The Medicines Co’s infectious disease group — one in a string of pipeline expansion deals — the company is reportedly closing down its headquarters and laying off 22 out of 25 staff and spinning out research projects, the local New Haven Biz reported last week. The bulk of the cuts were in R&D.
While Melinta confirmed the layoffs to the paper, it declined to verify the closing date of November 30 cited by the news site’s sources (saying “no final plans to shutter the New Haven location had been made”) or elaborate on the job cuts happening at its North Carolina, New Jersey and Illinois offices.
Over the past year, Melinta’s share price $MLNT has plunged 85%.
The company has not returned our request for further information.
“In the face of an extremely challenging time for the antibiotics industry, Melinta has made the difficult decision to significantly reduce our investment in discovery research and are currently looking for strategic partners to take on these activities, located at our New Haven facility,” an emailed statement to New Haven Biz read.
Melinta hinted at the reorganization in its Q3 call, in which interim CEO John Johnson plainly admitted to lower-than-expected sales and high-than-expected costs. With the help of newly hired CFO Peter Milligan, Johnson is hoping to shed $50 million in operating expenses next year by looking to external sources for innovation and “refocusing the company on product launches.”
It’s yet another alarming confirmation of the common worry that antibiotic developers face slim commercial prospects even after they have overcome the often lengthy regulatory journey. Big Pharma has largely bowed out of basic research in the field, as exemplified in Novartis’ high-profile exit in recent months, though Genentech claimed a notable exception with a preclinical candidate that its researchers say can represent a new class for drug-resistant gram-negative bacteria.
In Melinta’s case, it took 17 years and several CEOs to get an OK for Baxdela, which was launched this January with “increasing momentum,” Johnson said.
The execs, though, have toned down anticipated sales of Orbativ and Minocin — two of the three products that came with the Medicines Co deal — by a few million.
According to its website, Melinta was applying its discovery platform on programs in acne and bacterial vaginosis as well as next-gen antibiotics to combat “superbugs” — a pressing concern that the OECD warns will kill millions globally by 2050. Those programs’ fate remains to be seen.