The Medicines Company (MDCO) continues to work on expanding and strengthening its pipeline. In line with this goal, the company acquired Rempex Pharmaceuticals, Inc., a company with a focus on the development of treatments targeting multi-drug resistant gram-negative bacteria.
Financial Details
The acquisition terms included an upfront payment of $140 million to Rempex equity holders. Moreover, The Medicines Co. will make payments amounting to $334 million depending on the achievement of development and regulatory approval milestones ($214 million) and commercial milestones ($120 million).
Deal Strengthens Pipeline
With this acquisition, The Medicines Co.’s portfolio now has anti-infective assets like Carbavance, Minocin IV and RPX-602 in its portfolio. The company has also acquired a preclinical developmental program of novel candidates. Carbavance is the lead pipeline candidate at Rempex and is scheduled to enter pivotal studies next year – a new drug application (NDA) could be submitted in 2016.
Minocin IV will be marketed by The Medicines Co. in the U.S. for resistant infections due to acinetobacter (multi-drug resistant gram-negative bacteria that is a growing problem across the world). Acinetobacter is mainly prevalent in intensive care units. Meanwhile, a regulatory application for RPX-602, an improved formulation of Minocin IV, will be submitted for approval in the U.S. next year.
Our Take
This acquisition is in-line with The Medicines Co.’s efforts to build out its anti-infective portfolio. The acquisition brings medium as well as long-term operational and strategic value. The Minocin IV sales opportunity will allow the company to build relationships with the anti-infective community ahead of the launch of oritavancin, which could occur next year. The Medicines Co.’s shares were up 3.15% on the acquisition.
The Medicines Co. is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks include Actelion Ltd. (ALIOF), Vanda Pharmaceuticals, Inc. (VNDA) and Acorda Therapeutics, Inc. (ACOR). While Actelion and Vanda are Zacks Rank #1 (Strong Buy) stocks, Acorda is a Zacks Rank #2 (Buy) stock.
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