Tuesday, January 13, 2009

Targanta to sell to The Medicines Co. for a potential $133M

By Mass High Tech staff

Super-bug-focused biotech Targanta Therapeutics Corp. will be acquired by New Jersey’s The Medicines Co. in a deal that could be worth about $133.35 million, according to The Medicines Co.

The news comes a few weeks after Cambridge-based Targanta (Nasdaq: TARG) decided to cut 86 employees, or 75 percent of its staff, in response to a decision by the U.S. Food and Drug Administration (FDA) to not approve oritavancin, a drug designed to treat complicated skin and skin structure infections (cSSSI).

The sale agreement calls for Targanta shareholders to receive $2 in cash for each common share tendered in up front cash, or $42 million. Targanta shareholders could also be entitled to get further cash payments if the company achieves certain regulatory and commercial milestones within agreed upon time periods that could net the shareholders another $91.35 million.

The boards of directors of both companies have given approval to the deal, and Targanta’s board has recommended that its shareholders tender their shares into the tender offer, adopt the merger agreement and approve the merger.

Targanta’s lead product, oritavancin, is a hospital-based antibiotic targeted at a wide range of gram-positive bacteria including methicillin-resistant staphylococcus aureus (MRSA) and other drug-resistant bugs. The FDA instructed Targanta to conduct an additional clinical study to demonstrate the drug’s efficacy and safety.

In November, Targanta reported a net loss of $12.7 million for its third quarter. In 2007, it saw a net loss of $63.4 million on zero revenue.