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Out of failure, opportunity
PARSIPPANY, N.J.óWith an eye on expanding its global critical care pipeline, The Medicines Company recently acquired Targanta Therapeutics for $42 million. The sale comes after Targanta's lead drug candidate failed to win recommendation from a Food and Drug Administration (FDA) advisory panel in November and the company's stock price plunged.
The drug, oritavancin, is an antibiotic intended to treat complex skin infections, but FDA panelists said it has not yet been proven safe and effective. In the wake of the FDA decision, Targanta announced last month it was laying off 86 employees, about 75 percent of its workforce.
Ironically, it was oritavancin that attracted The Medicines Company to Targanta, providing another step in company's strategy of becoming a key player in global critical care medicine.
According to Kelli Watson, senior vice president of global communications for The Medicines Company, Targanta proved to be an attractive acquisition because it is focused on developing and commercializing medicines to treat serious infections in critical care settings.
Despite the FDA setback, The Medicines Company views oritavancin as a viable drug candidate and is confident it will eventually win FDA approval.
"The addition of Targanta's oritavancin, a late-stage product, will be another step toward execution of our strategic plan to become a global leader in critical care medicine," says Clive Meanwell, chairman and CEO of The Medicines Company. "Oritavancin has the potential to provide important patient outcome and economic advantages for hospitals."
Meanwell says the growing hospital market for gram-positive infections in the U.S. alone reached $1.1 billion in 2007, offering a rich repository of prospects for drugs like oritavancin.
"We believe that oritavancin can become an important anti-infective for serious infections involving difficult-to-treat bacteria in difficult-to-treat hospitalized patients," he adds. "Many of those critically ill patients are the same patients treated with our existing products."
Meanwell also points out that companies have to move when opportunities arise, regardless of the economic climate.
"There are always great moments when assets become available and unfortunately, they don't line up with when you might want them," Meanwell says. "Even in tough times, it is important that we look forward. It is a tough economic climate, but we must press forward."
Under the terms of the merger agreement, Targanta shareholders may also be entitled to receive additional contingent cash payments upon the achievement of specified regulatory and commercial milestones within agreed-upon time periods.
Officials with The Medicines Company declined to comment on operations of the entities until after the deal is completed.
Watson points out that the deal will expand The Medicine Company's portfolio of critical care products and add a late stage product, with global rights, and the potential for near-term revenue, and could contribute significantly to the company's long-term growth.
"Oritavancin will leverage our current critical care infrastructure by laying the foundation for the further expansion into hospital anti-infectives from our current cardiovascular platform," Watson says, adding it also is a good fit in the pipeline because of its potent bactericidal activity against a broad spectrum of gram-positive bacteria including staphylococcal strains with resistance to methicillin (MRSA) and vancomycin. DDN