FORM 10-Q
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
MELINTA THERAPEUTICS, INC.
(Exact name of registrant specified in its charter)
|
Delaware
|
2834
|
45-4440364
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
(Primary Standard Industrial
Classification Code Number)
|
(I.R.S. Employer
Identification No.)
|
Title of Each Class
|
Trading Symbol
|
Name of Exchange on which Registered
|
Common Stock, $0.001 Par Value
|
MLNT
|
Nasdaq Global Market
|
Securities Registered Pursuant to Section 12(g) of the Act: None
|
Large accelerated filer
|
¨
|
|
Accelerated filer
|
x
|
Non-accelerated filer
|
¨
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
x
|
Emerging growth company
|
¨
|
|
|
|
|
Page
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and equivalents
|
$
|
116,901
|
|
|
$
|
81,808
|
|
Receivables (See Note 3)
|
14,892
|
|
|
22,485
|
|
||
Inventory
|
44,451
|
|
|
41,341
|
|
||
Prepaid expenses and other current assets
|
5,512
|
|
|
3,848
|
|
||
Total current assets
|
181,756
|
|
|
149,482
|
|
||
Property and equipment, net
|
1,465
|
|
|
1,586
|
|
||
Intangible assets, net
|
225,073
|
|
|
229,196
|
|
||
Other assets (See Note 3)
|
62,155
|
|
|
61,326
|
|
||
Total assets
|
$
|
470,449
|
|
|
$
|
441,590
|
|
Liabilities
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
8,321
|
|
|
$
|
16,765
|
|
Accrued expenses
|
22,625
|
|
|
33,924
|
|
||
Deferred purchase price and other liabilities (See Notes 3 and 4)
|
82,316
|
|
|
78,394
|
|
||
Accrued interest on notes payable
|
4,440
|
|
|
4,485
|
|
||
Warrant liability
|
23
|
|
|
38
|
|
||
Conversion liability (See Note 4)
|
12,236
|
|
|
—
|
|
||
Total current liabilities
|
129,961
|
|
|
133,606
|
|
||
Long-term liabilities
|
|
|
|
||||
Notes payable, net of debt discount and costs (See Note 4)
|
91,397
|
|
|
110,476
|
|
||
Convertible notes payable to related parties, net of debt discount and costs (See note 4)
|
62,350
|
|
|
—
|
|
||
Other long-term liabilities
|
10,225
|
|
|
7,444
|
|
||
Total long-term liabilities
|
163,972
|
|
|
117,920
|
|
||
Total liabilities
|
293,933
|
|
|
251,526
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Shareholders' Equity
|
|
|
|
||||
Preferred stock; $.001 par value; 5,000,000 shares authorized; no shares issued or outstanding at March 31, 2019, and December 31, 2018, respectively
|
—
|
|
|
—
|
|
||
Common stock; $.001 par value; 80,000,000 shares authorized; 11,779,897 and 11,204,050 issued and outstanding at March 31, 2019, and December 31, 2018, respectively
|
12
|
|
|
11
|
|
||
Additional paid-in capital
|
924,821
|
|
|
909,896
|
|
||
Accumulated deficit
|
(748,317
|
)
|
|
(719,843
|
)
|
||
Total shareholders’ equity
|
176,516
|
|
|
190,064
|
|
||
Total liabilities and shareholders’ equity
|
$
|
470,449
|
|
|
$
|
441,590
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Revenue
|
|
|
|
||||
Product sales, net
|
$
|
11,775
|
|
|
$
|
11,846
|
|
Contract research
|
1,409
|
|
|
2,995
|
|
||
License
|
900
|
|
|
—
|
|
||
Total revenue
|
14,084
|
|
|
14,841
|
|
||
Operating expenses:
|
|
|
|
||||
Cost of goods sold
|
7,365
|
|
|
7,686
|
|
||
Research and development
|
5,364
|
|
|
16,129
|
|
||
Selling, general and administrative
|
25,941
|
|
|
34,624
|
|
||
Total operating expenses
|
38,670
|
|
|
58,439
|
|
||
Loss from operations
|
(24,586
|
)
|
|
(43,598
|
)
|
||
Other income (expense):
|
|
|
|
||||
Interest income
|
187
|
|
|
210
|
|
||
Interest expense
|
(7,103
|
)
|
|
(10,196
|
)
|
||
Interest expense (related party, see Note 4)
|
(564
|
)
|
|
—
|
|
||
Change in fair value of warrant & conversion liabilities
|
6,015
|
|
|
24,085
|
|
||
Loss on extinguishment of debt
|
(346
|
)
|
|
(2,595
|
)
|
||
Other income (expense)
|
(73
|
)
|
|
4
|
|
||
Grant income (expense)
|
(62
|
)
|
|
2,658
|
|
||
Other income (expense), net
|
(1,946
|
)
|
|
14,166
|
|
||
Net loss
|
$
|
(26,532
|
)
|
|
$
|
(29,432
|
)
|
Basic and diluted net loss per share
|
$
|
(2.34
|
)
|
|
$
|
(4.76
|
)
|
Basic and diluted weighted average shares outstanding
|
11,330,019
|
|
|
6,183,540
|
|
|
Three Months Ended March 31, 2019
|
|||||||||||||||||
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated Deficit
|
|
Total
Shareholders'
Equity
|
|||||||||||
|
Shares
|
|
Amount
|
|
|
|
||||||||||||
Balance as of January 1, 2019
|
11,204,049
|
|
|
$
|
11
|
|
|
$
|
909,896
|
|
|
$
|
(719,843
|
)
|
|
$
|
190,064
|
|
Share-based compensation
|
—
|
|
|
—
|
|
|
909
|
|
|
—
|
|
|
909
|
|
||||
Issuance of common shares
|
1,705
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
||||
Vesting of restricted stock grants
|
24,143
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Issuance of common shares upon conversion of convertible notes
|
550,000
|
|
|
1
|
|
|
2,766
|
|
|
—
|
|
|
2,767
|
|
||||
Discount on issuance of convertible notes (deemed shareholder contribution) (Note 4)
|
—
|
|
|
—
|
|
|
11,242
|
|
|
—
|
|
|
11,242
|
|
||||
Cumulative adjustment upon adoption of lease accounting standard (Note 6)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,942
|
)
|
|
(1,942
|
)
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,532
|
)
|
|
(26,532
|
)
|
||||
Balance as of March 31, 2019
|
11,779,897
|
|
|
$
|
12
|
|
|
$
|
924,821
|
|
|
$
|
(748,317
|
)
|
|
$
|
176,516
|
|
|
Three Months Ended March 31, 2018
|
|||||||||||||||||
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated Deficit
|
|
Total
Shareholders'
Equity
|
|||||||||||
|
Shares
|
|
Amount
|
|
|
|
||||||||||||
Balance as of January 1, 2018
|
4,399,788
|
|
|
$
|
4
|
|
|
$
|
644,991
|
|
|
$
|
(572,659
|
)
|
|
$
|
72,336
|
|
Adoption of revenue accounting standard
|
—
|
|
|
—
|
|
|
—
|
|
|
10,008
|
|
|
10,008
|
|
||||
Share-based compensation
|
—
|
|
|
—
|
|
|
955
|
|
|
—
|
|
|
955
|
|
||||
Issuance of common shares
|
40
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Vesting of restricted stock grants
|
5,521
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Issuance of common shares in connection with IDB Transaction
|
1,865,301
|
|
|
2
|
|
|
145,961
|
|
|
—
|
|
|
145,963
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,432
|
)
|
|
(29,432
|
)
|
||||
Balance as of March 31, 2018
|
6,270,650
|
|
|
$
|
6
|
|
|
$
|
791,910
|
|
|
$
|
(592,083
|
)
|
|
$
|
199,833
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Operating activities
|
|
|
|
||||
Net loss
|
$
|
(26,532
|
)
|
|
$
|
(29,432
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
4,474
|
|
|
4,805
|
|
||
Non-cash interest expense
|
3,230
|
|
|
5,954
|
|
||
Share-based compensation
|
892
|
|
|
955
|
|
||
Change in fair value of warrant & conversion liabilities
|
(6,015
|
)
|
|
(24,085
|
)
|
||
Loss on extinguishment of debt
|
346
|
|
|
2,595
|
|
||
Gain on extinguishment of lease liabilities
|
(792
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities
|
|
|
|
||||
Receivables
|
7,593
|
|
|
(5,868
|
)
|
||
Inventory
|
(3,093
|
)
|
|
(2,002
|
)
|
||
Prepaid expenses and other current assets
|
(1,551
|
)
|
|
(1,293
|
)
|
||
Accounts payable
|
(8,372
|
)
|
|
3,983
|
|
||
Accrued expenses
|
(9,711
|
)
|
|
(4,817
|
)
|
||
Accrued interest on notes payable
|
(46
|
)
|
|
(284
|
)
|
||
Other non-current assets and liabilities
|
2,256
|
|
|
(1,930
|
)
|
||
Net cash used in operating activities
|
(37,321
|
)
|
|
(51,419
|
)
|
||
Investing activities
|
|
|
|
||||
IDB acquisition
|
—
|
|
|
(166,383
|
)
|
||
Purchases of intangible assets
|
(1,209
|
)
|
|
—
|
|
||
Purchases of property and equipment
|
(12
|
)
|
|
(504
|
)
|
||
Net cash used in investing activities
|
(1,221
|
)
|
|
(166,887
|
)
|
||
Financing activities
|
|
|
|
||||
Proceeds from the issuance of notes payable
|
—
|
|
|
111,421
|
|
||
Proceeds from the issuance of convertible notes payable
|
75,000
|
|
|
—
|
|
||
Costs associated with the issuance of notes payable
|
(1,301
|
)
|
|
(6,455
|
)
|
||
Proceeds from the issuance of warrants
|
—
|
|
|
33,264
|
|
||
Proceeds from the issuance of royalty agreement
|
—
|
|
|
1,472
|
|
||
Purchase of notes payable disbursement option
|
—
|
|
|
(7,609
|
)
|
||
Proceeds from issuance of common stock, net, to lender
|
—
|
|
|
51,452
|
|
||
Proceeds from issuance of common stock, net
|
8
|
|
|
40,000
|
|
||
Debt extinguishment
|
—
|
|
|
(2,150
|
)
|
||
IDB acquisition deferred payments
|
(72
|
)
|
|
—
|
|
||
Proceeds from the exercise of stock options, net of cancellations
|
—
|
|
|
3
|
|
||
Principal payments on notes payable
|
—
|
|
|
(40,000
|
)
|
||
Net cash provided by financing activities
|
73,635
|
|
|
181,398
|
|
||
Net change in cash and equivalents
|
35,093
|
|
|
(36,908
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of the period
|
82,008
|
|
|
128,587
|
|
||
Cash, cash equivalents and restricted cash at end of the period
|
$
|
117,101
|
|
|
$
|
91,679
|
|
Supplemental cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
4,486
|
|
|
$
|
4,480
|
|
Supplemental disclosure of non-cash financing and investing activities:
|
|
|
|
||||
Accrued purchases of fixed assets
|
$
|
12
|
|
|
$
|
327
|
|
|
Cash
Discounts
|
|
Product
Returns
|
|
Chargebacks
|
|
Fees-for-
Service
|
|
MelintAssist
|
|
Government
Rebates
|
|
Commercial
Rebates
|
|
Admin
Fees
|
||||||||||||||||
Balance as of January 1, 2019
|
$
|
245
|
|
|
$
|
2,970
|
|
|
$
|
762
|
|
|
$
|
818
|
|
|
$
|
412
|
|
|
$
|
693
|
|
|
$
|
599
|
|
|
$
|
138
|
|
Allowances for sales
|
292
|
|
|
398
|
|
|
1,127
|
|
|
793
|
|
|
264
|
|
|
215
|
|
|
306
|
|
|
142
|
|
||||||||
Payments & credits issued
|
(392
|
)
|
|
(206
|
)
|
|
(1,299
|
)
|
|
(686
|
)
|
|
(278
|
)
|
|
(73
|
)
|
|
(330
|
)
|
|
(127
|
)
|
||||||||
Balance as of March 31, 2019
|
$
|
145
|
|
|
$
|
3,162
|
|
|
$
|
590
|
|
|
$
|
925
|
|
|
$
|
398
|
|
|
$
|
835
|
|
|
$
|
575
|
|
|
$
|
153
|
|
|
March 31,
2019 |
|
December 31, 2018
|
||||
Cash and cash equivalents
|
$
|
116,901
|
|
|
$
|
81,808
|
|
Restricted cash (included in Other Assets)
|
200
|
|
|
200
|
|
||
Total cash, cash equivalents and restricted cash shown in the Condensed
Consolidated Statements of Cash Flows |
$
|
117,101
|
|
|
$
|
82,008
|
|
|
March 31,
2019 |
|
December 31, 2018
|
||||
Trade receivables
|
$
|
7,460
|
|
|
$
|
11,509
|
|
Contracted services
|
6,958
|
|
|
10,293
|
|
||
Other receivables
|
474
|
|
|
683
|
|
||
Total receivables
|
$
|
14,892
|
|
|
$
|
22,485
|
|
|
March 31,
2019 |
|
December 31, 2018
|
||||
Raw materials
|
$
|
28,841
|
|
|
$
|
24,507
|
|
Work in process
|
9,977
|
|
|
11,700
|
|
||
Finished goods
|
11,685
|
|
|
12,204
|
|
||
Gross value of inventory
|
50,503
|
|
|
48,411
|
|
||
Less: valuation reserves
|
(6,052
|
)
|
|
(7,070
|
)
|
||
Total inventory
|
$
|
44,451
|
|
|
$
|
41,341
|
|
|
March 31,
2019 |
|
December 31, 2018
|
||||
Deerfield disbursement option (see Note 4)
|
$
|
7,609
|
|
|
$
|
7,608
|
|
Long-term inventory deposits
|
48,044
|
|
|
51,127
|
|
||
Other assets
|
1,400
|
|
|
2,391
|
|
||
Right-of-use assets
|
4,902
|
|
|
—
|
|
||
Restricted cash
|
200
|
|
|
200
|
|
||
Total other assets
|
$
|
62,155
|
|
|
$
|
61,326
|
|
|
March 31,
2019 |
|
December 31, 2018
|
||||
Accrued contracted services
|
$
|
1,318
|
|
|
$
|
2,909
|
|
Payroll related expenses
|
10,026
|
|
|
15,585
|
|
||
Professional fees
|
173
|
|
|
3,598
|
|
||
Accrued royalty payments
|
2,885
|
|
|
2,052
|
|
||
Accrued sales allowances
|
6,047
|
|
|
5,630
|
|
||
Accrued other
|
2,176
|
|
|
4,150
|
|
||
Total accrued expenses
|
$
|
22,625
|
|
|
$
|
33,924
|
|
|
March 31,
2019 |
|
December 31, 2018
|
||||
Deferred purchase price
|
$
|
49,758
|
|
|
$
|
48,394
|
|
Milestone liability
|
30,000
|
|
|
30,000
|
|
||
Lease liabilities, current
|
2,558
|
|
|
—
|
|
||
Total deferred purchase price and other liabilities
|
$
|
82,316
|
|
|
$
|
78,394
|
|
|
March 31,
2019 |
|
December 31, 2018
|
||||
Lease liabilities, net of current
|
$
|
4,086
|
|
|
$
|
—
|
|
Long-term accrual royalties
|
1,215
|
|
|
2,230
|
|
||
Long-term deferred purchase price
|
4,853
|
|
|
4,708
|
|
||
Other long-term liabilities
|
71
|
|
|
506
|
|
||
Total other long-term liabilities
|
$
|
10,225
|
|
|
$
|
7,444
|
|
|
Beginning
Balance
|
|
Record Conversion Right and Issuance Costs
|
|
Accretion
Expense(2)
|
|
Principal
Payments
and Exit Fee(2)
|
|
Conversion
|
|
Ending Balance
|
|||||||||||||
January 5 - December 31, 2018
|
$
|
104,966
|
|
|
|
|
$
|
5,510
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
110,476
|
|
||||
January 1 - March 31, 2019
|
110,476
|
|
|
(23,621
|
)
|
(1
|
)
|
1,962
|
|
|
—
|
|
|
(1,694
|
)
|
|
87,123
|
|
||||||
April 1 - December 31, 2019
|
87,123
|
|
|
|
|
7,734
|
|
|
—
|
|
|
—
|
|
|
94,857
|
|
||||||||
Year Ending December 31, 2020
|
94,857
|
|
|
|
|
13,284
|
|
|
—
|
|
|
—
|
|
|
108,141
|
|
||||||||
Year Ending December 31, 2021
|
108,141
|
|
|
|
|
18,044
|
|
|
—
|
|
|
—
|
|
|
126,185
|
|
||||||||
Year Ending December 31, 2022
|
126,185
|
|
|
|
|
17,459
|
|
|
(69,089
|
)
|
|
—
|
|
|
74,555
|
|
||||||||
Year Ending December 31, 2023
|
74,555
|
|
|
|
|
7,079
|
|
|
(75,370
|
)
|
|
—
|
|
|
6,264
|
|
||||||||
Year Ending December 31, 2024
|
6,264
|
|
|
|
|
16
|
|
|
(6,280
|
)
|
|
—
|
|
|
—
|
|
||||||||
Total
|
|
|
$
|
(23,621
|
)
|
|
$
|
71,088
|
|
|
$
|
(150,739
|
)
|
|
$
|
(1,694
|
)
|
|
|
(1.)
|
Consists of
$18,962
, representing the day-one fair value of the conversion right, and
$4,659
, which is comprised of (a) additional issuance costs of
$408
, and (b) the initial fair value of the Deerfield Portion of the Vatera Loan Agreement of
$4,251
; as we did not receive cash from Deerfield but, rather, issued the Deerfield Portion in consideration for amending the Credit Facility, the
$4,251
is treated as debt issuance costs. The total of
$23,621
will be accreted over the remaining life of the loan.
|
(2.)
|
Accretion expense, principal payments and the exit fee will be reduced each time Deerfield exercises their conversion right.
|
Principal amount of Convertible Loans
|
$
|
80,000
|
|
Discount and related capital contribution associated with below market terms of Convertible Loans
|
(11,242
|
)
|
|
Discount on Deerfield portion of Convertible Loans
|
(749
|
)
|
|
Debt issue costs
|
(1,775
|
)
|
|
Carrying value at the Initial Draw Date
|
$
|
66,234
|
|
|
|
Beginning Balance
|
|
Paid-in Kind Interest
|
|
Accretion
Expense
|
|
Principal Payments and Exit Fee
|
|
Ending Balance
|
||||||||||
February 25 - March 31, 2019
|
|
$
|
66,234
|
|
|
$
|
211
|
|
|
$
|
179
|
|
|
$
|
—
|
|
|
$
|
66,624
|
|
April 1 - December 31, 2019
|
|
66,624
|
|
|
1,542
|
|
|
1,370
|
|
|
—
|
|
|
69,536
|
|
|||||
Year Ending December 31, 2020
|
|
69,536
|
|
|
2,098
|
|
|
2,037
|
|
|
—
|
|
|
73,671
|
|
|||||
Year Ending December 31, 2021
|
|
73,671
|
|
|
2,146
|
|
|
2,296
|
|
|
—
|
|
|
78,113
|
|
|||||
Year Ending December 31, 2022
|
|
78,113
|
|
|
2,200
|
|
|
2,586
|
|
|
—
|
|
|
82,899
|
|
|||||
Year Ending December 31, 2023
|
|
82,899
|
|
|
2,257
|
|
|
2,905
|
|
|
—
|
|
|
88,061
|
|
|||||
Year Ending December 31, 2024
|
|
88,061
|
|
|
2,321
|
|
|
3,264
|
|
|
—
|
|
|
93,646
|
|
|||||
Year Ending December 31, 2025
|
|
93,646
|
|
|
38
|
|
|
57
|
|
|
(93,741
|
)
|
|
—
|
|
|||||
Total
|
|
|
|
$
|
12,813
|
|
|
$
|
14,694
|
|
|
$
|
(93,741
|
)
|
|
|
|
As of March 31, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market fund
|
$
|
33,068
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,068
|
|
Total assets at fair value
|
$
|
33,068
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,068
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Royalty liability in deferred purchase price
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,102
|
)
|
|
$
|
(1,102
|
)
|
Royalty liability in contingent consideration
|
—
|
|
|
—
|
|
|
(4,854
|
)
|
|
(4,854
|
)
|
||||
Warrant liability
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
(23
|
)
|
||||
Conversion liability (see Note 4)
|
—
|
|
|
—
|
|
|
(12,236
|
)
|
|
(12,236
|
)
|
||||
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(18,215
|
)
|
|
$
|
(18,215
|
)
|
|
As of December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market fund
|
$
|
32,883
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,883
|
|
Total assets at fair value
|
$
|
32,883
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,883
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Current royalty contingent consideration from IDB acquisition
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,006
|
)
|
|
$
|
(1,006
|
)
|
Long-term royalty contingent consideration from IDB acquisition
|
—
|
|
|
—
|
|
|
(4,708
|
)
|
|
(4,708
|
)
|
||||
Warrant liability
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
(38
|
)
|
||||
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(5,752
|
)
|
|
$
|
(5,752
|
)
|
Level 3 Liabilities
|
Fair Value at December 31, 2018
|
|
Accretion Recorded in Interest Expense
|
|
Change in
Unrealized
Gains
(Losses)
|
|
(Issuances)
Settlements, Net
|
|
Net Transfer
Between Liabilities
|
|
Fair Value at March 31, 2019
|
||||||||||||
Current royalty contingent consideration from IDB acquisition
|
$
|
(1,006
|
)
|
|
$
|
(176
|
)
|
|
$
|
—
|
|
|
$
|
382
|
|
|
$
|
(302
|
)
|
|
$
|
(1,102
|
)
|
Long-term royalty contingent consideration from IDB acquisition
|
(4,708
|
)
|
|
(448
|
)
|
|
—
|
|
|
—
|
|
|
302
|
|
|
(4,854
|
)
|
||||||
Warrant liability
|
(38
|
)
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
||||||
Conversion liability (see Note 4)
|
—
|
|
|
—
|
|
|
6,000
|
|
|
(18,236
|
)
|
|
—
|
|
|
(12,236
|
)
|
||||||
Total liabilities at fair value
|
$
|
(5,752
|
)
|
|
$
|
(624
|
)
|
|
$
|
6,015
|
|
|
$
|
(17,854
|
)
|
|
$
|
—
|
|
|
$
|
(18,215
|
)
|
|
|
Classification
|
|
March 31,
2019 |
||
Assets
|
|
|
|
|
||
Total operating lease assets
|
|
Other assets
|
|
$
|
4,902
|
|
Liabilities
|
|
|
|
|
||
Current
|
|
Deferred purchase price and other liabilities
|
|
$
|
2,558
|
|
Noncurrent
|
|
Other long-term liabilities
|
|
4,086
|
|
|
Total operating lease liabilities
|
|
|
|
$
|
6,644
|
|
Maturity of Lease Liabilities
|
|
Amount
|
||
Remainder of 2019
|
|
$
|
2,136
|
|
2020
|
|
2,248
|
|
|
2021
|
|
1,962
|
|
|
2022
|
|
1,235
|
|
|
2023
|
|
626
|
|
|
After 2023
|
|
260
|
|
|
Total operating lease payments
|
|
$
|
8,467
|
|
Less: Interest
|
|
(1,823
|
)
|
|
Present value of operating lease liabilities
|
|
$
|
6,644
|
|
Maturity of Lease Liabilities
|
|
Amount
|
||
2019
|
|
$
|
2,348
|
|
2020
|
|
2,269
|
|
|
2021
|
|
1,827
|
|
|
2022
|
|
1,238
|
|
|
2023
|
|
624
|
|
|
2024 and thereafter
|
|
262
|
|
|
Total operating lease payments
|
|
$
|
8,568
|
|
|
|
Three Months Ended March 31, 2019
|
||
Cash paid for amounts included in the measurement of operating lease liabilities
|
|
$
|
621
|
|
Right of use assets obtained in exchange for lease obligations
|
|
$
|
378
|
|
|
|
Outstanding
|
|
Exercisable
|
||||
Number of shares
|
|
658,532
|
|
|
147,281
|
|
||
Weighted-average remaining life
|
|
8.4
|
|
|
5.3
|
|
||
Weighted-average exercise price
|
|
$
|
52.74
|
|
|
$
|
132.35
|
|
Intrinsic value
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cost of goods sold
|
$
|
—
|
|
|
$
|
125
|
|
Research and development
|
79
|
|
|
131
|
|
||
Selling, general and administrative
|
813
|
|
|
699
|
|
||
Total
|
$
|
892
|
|
|
$
|
955
|
|
|
Three Months Ended March 31,
|
||||
|
2019
|
|
2018
|
||
Warrants outstanding
|
766,680
|
|
|
770,486
|
|
Stock options outstanding
|
658,532
|
|
|
397,429
|
|
Restricted stock units outstanding
|
450,000
|
|
|
56,092
|
|
|
1,875,212
|
|
|
1,224,007
|
|
Balance - December 31, 2018
|
$
|
9,767
|
|
Additional severance accruals (recorded in SG&A)
|
974
|
|
|
Severance payments
|
(5,550
|
)
|
|
Balance - March 31, 2019
|
$
|
5,191
|
|
•
|
$6.6 million for development activities, principally clinical studies, supporting Baxdela, Vabomere, Orbactiv and Minocin, as well as development of solithromycin, which we wound down last year;
|
•
|
$2.0 million resulting from winding down our early stage research programs;
|
•
|
$0.7 million due to lower quality and regulatory activities, due to integration of the IDB products;
|
•
|
$0.4 million due to lower personnel-related and travel expenses; and
|
•
|
$0.9 million due to other costs.
|
•
|
lower legal, consulting and other professional fees of $4.0 million;
|
•
|
lower commercial support and expenses of $2.4 million;
|
•
|
lower medical education of $1.1 million;
|
•
|
lower severance costs of $0.5 million; and
|
•
|
$0.8 million of gain from extinguishing lease liabilities.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
(37,321
|
)
|
|
$
|
(51,419
|
)
|
Investing activities
|
(1,221
|
)
|
|
(166,887
|
)
|
||
Financing activities
|
73,635
|
|
|
181,398
|
|
||
Net change in cash and equivalents
|
$
|
35,093
|
|
|
$
|
(36,908
|
)
|
•
|
$190.0 million provided by the facility agreement;
|
•
|
$40.0 million provided by additional equity funding;
|
•
|
$6.5 million used for debt issuance costs; and
|
•
|
$40.0 million used for payment of notes payable, as well as $2.2 million for debt extinguishment.
|
•
|
to fund the activities supporting the commercialization efforts for our marketed products;
|
•
|
pursue additional indications and regional approvals, leveraging our robust product portfolio and minimum 10-year market exclusivity period in the United States, including Baxdela for the treatment of CABP and a reformulation for Orbactiv; and
|
•
|
the remainder for working capital, selling, general and administrative expenses, and other general corporate purposes.
|
Exhibit
Number
|
|
Description of Document
|
|
Registrant’s
Form
|
|
Filed
|
|
Exhibit
Number
|
|
Filed
Herewith
|
|
10.1
|
|
|
|
|
|
|
|
|
|
X
|
|
10.2
|
|
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
|
|
|
|
|
X
|
|
32.1
|
|
|
|
|
|
|
|
|
|
X
|
|
32.2
|
|
|
|
|
|
|
|
|
|
X
|
|
101
|
|
|
Financials in XBRL format.
|
|
|
|
|
|
|
|
X
|
+
|
The exhibit contains a management contract, compensatory plan or arrangement which is required to be identified in this report.
|
*
|
The Company has requested confidential treatment with respect to portions of this exhibit. Those portions have been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request.
|
|
MELINTA THERAPEUTICS, INC.
|
|
|
|
|
Dated:
|
By:
|
/s/ John H. Johnson
|
May 10, 2019
|
|
John H. Johnson
|
|
|
Interim Chief Executive Officer and Director
|
|
|
|
Dated:
|
By:
|
/s/ Peter J. Milligan
|
May 10, 2019
|
|
Peter J. Milligan
|
|
|
Chief Financial Officer
|
(1)
|
I have reviewed this quarterly report on Form 10-Q of Melinta Therapeutics, Inc.;
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
(4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in the report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(5)
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Dated: May 9, 2019
|
|
/s/ John H. Johnson
|
John H. Johnson
|
Chief Executive Officer and Director
(Principal Executive Officer)
|
(1)
|
I have reviewed this quarterly report on Form 10-Q of Melinta Therapeutics, Inc.;
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
(4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in the report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(5)
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Dated: May 9, 2019
|
|
/s/ Peter J. Milligan
|
Peter J. Milligan
|
Chief Financial Officer
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: May 9, 2019
|
|
/s/ John H. Johnson
|
John H. Johnson
|
Chief Executive Officer and Director (Principal Executive Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: May 9, 2019
|
|
/s/ Peter J. Milligan
|
Peter J. Milligan
|
Chief Financial Officer (Principal Financial Officer)
|