Melinta: Acquisition As Growth Strategy
The acquisition of the infectious disease business from Medicines Company was designed to enable Melinta to address the strategic uncertainty present in an increasingly antibiotic resistant environment.
Through related diversification, Melinta is creating a focused portfolio of products to gain market share in the growing anti-infective market.
Beyond new drugs to add to its pipeline, the acquisition will provide Melinta the additional infrastructure needed to effectively commercialize approved drugs and further drug development.
If we accept that all drugs have a pricing issue (yes, even generics, where there seems to be a race to lower prices to steal market share) and that the anti-infectives market is unconsolidated, we can argue that there is a great deal of strategic uncertainty. Why Because the future is unpredictable and the various potential outcomes do not reveal a specific set of inevitable circumstances. Moreover, uncertainty only increases with longer time horizons. This is at the heart of the strategic uncertainty facing companies, reflected by the conditions in the competitive market and the ability to meet consumer needs. Addressing strategic uncertainty remains the avenue to success and, thus, the bailiwick of management.
So it was on November 30, 2017, Melinta (MLNT) sought to address strategic uncertainty when they announced the acquisition of Medicines Company‘s (NASDAQ:MDCO) infectious disease unit that included its FDA approved drugs Vabomere (vaborbactam/meropenem), Orbactiv (oritavancin) and Minocin IV (minocycline). Recently launched and FDA approved, Vabomere is a novel fixed-dose combination agent comprising of vaborbactam, a beta-lactamase inhibitor, and meropenem. Orbactiv is an injectable product approved by the FDA and EMA for the treatment of adults with acute bacterial skin and skin structure infections. Minocin IV is an injectable tetracycline derivative approved in the U.S. for the treatment of infections due to susceptible strains of several important designated gram-positive and gram-negative pathogens.