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And why would Cemp pay this company 8 million if the deal doesn't go through. They need Cemp way more than Cemp needs them
Have you read the 800 plus pages of crap, just when I had someone spend half a day printing that garbage they updated it so one has to play hide and seek finding the changes.
If this is so hot why is CEMP getting very little in return, Cemp has the cash, Cemp is on NASDAQ, CEMP also has a valuable tax benefit to a profitable company, CEMP has valuable patents.
Stock is trading at less than cash and they may have to reverse split stock because they are numnuts.
They should have had a persuasive 30-to 40 page powerpoint presentation highlighting the benefits.
The modeling I read does not have Soli hitting the market until 2022.. If it only costs 75 mil to get oral completed in less than a year why dont they just do that. They will have a blockbuster drug at that point. Not to mention get in and hire some big hitters to sue the FDA. There is a plan.
Instead they reveres merge with a private company and bail out those insiders.
Like I said, Sarepta had a good plan. And it was easier because it was little boys with parents, not old people randomly dying. Too late after the CRL.
They did push back by suggesting 2K only... (per the adcom discussion!!!) but the corrupt FDA division under Sumathi Nambiar said 6K.
As Ken said, Menarini is a big pharma.
They are going to have 70 salespeople in the US.
Why didn't these losers push back on FDA like Serepta did.
What they are offering shareholders are a bag of Sh*t
All they bring is debt and an approved product that no big pharma wanted to help them market. They will deplete Cemp stash
Cemp brings
3.25 in cash
3.5 in tax losses
A Nasdaq listing
Multiple valuable patents
A possible billion dollar drug
Cemp should hire a great CEO and spend the 75 mil to get oral approved, instead they cede control to a flaming pile of crap.
Did you read proxie. Cemp management should be sued up the ying yang.
They are completely incompetent and stupid.
No. The currently active lawsuit is a bunch of gibberish and will be dismissed.
Isn't that one of the reasons they are being sued
But in August? They did not even mention anything in August.
Actually we were very pissed about the manufacturing issue and the brush off it received. She may have been a great scientist but she was not a great CEO.
Prabha is a scientist.
She founded the company. She took a lot of risks. She did a lot of work. The early trials were run perfectly. But she rushed into the finish line unprepared, and bungled the NASH and COPD trials (by adding patients that were specifically excluded, for one). Ultimately, there were a lot of warning signs that Cempra wasn't prepared for the adcom.
But those warning signs were not what you might think. The drug is 100% safe, but it takes a *lot* of research to really know this. On the outside, it is easy to be led astray and say "oh it's like Ketek so it won't be approved" -- which is what the FDA said basically, but it does not make it scientifically correct. So it is not a warning sign. It is a red herring that just happened to be what the incompetent FDA also latched on to because of incompetent management.
So if you have followed that "surface" warning signs you wouldn't have lost money on the big drop after the briefing docs came out, but you'd be only *accidentally* correct. You wouldn't deserve a pat on the back.
The "real" warning signs were there, though:
1) No one -- not investors, not sell-side, and NOT THE MANAGEMENT -- alerted anyone else about the Wockhardt factory issue. Wockhardt's deal with Cempra was public. Wockhardt only has a limited number of factories and the one that got the import alert (which is public info, Wockhardt itself PRed it, and there were news items on it) was I think the only one that was available to export to the US. Yet everyone associated with Cempra completely ignored it and moved the stock from 18 to 24. (I wasn't paying attention to the company at the time...)
2) The approved compensation structure gave management bonuses upon completion of certain steps in the NDA, equally weighed. It was not aligned with reality where none of those steps except the last one (approval) matter.
3) The announcement of the adcom itself. The FDA often does these for new drugs, but not always. The price did not move at all and almost no one cared -- you can see that there are only two comments on SA with concerns. One of them is mine: https://seekingalpha.com/news/3206223-ad-comm-november-4-cempras-solithromycin#comment-73062146.
4) The hope that the import alert would be lifted in time for the CC in the October CC shows Cempra management was clueless about what was actually going on in the factory, or lying through their mouths. Again -- either Wockhardt or Cempra was lying because the horrific 483 observations came out in something like November 2015!
After the adcom, if you remember, Cempra stock was actually up on decent volume about 35% in pre-market after the adcom and got shorted/sold down way below on that day. So not everyone agreed.
FDA could have easily approved. Remember, that was really a 9-4 vote on approval. And then the FDA bungled the meeting minutes very badly(and refused to fix them, despite my many phone calls and emails).
So I am leaning on the side of CYA along with good old jealousy at a fellow Indian.
In any case, this company is now severely, ridiculously undervalued... especially with the Melinta merger and its Baxdela miracle drug!
...also,... did I mention Japan is running three solithromycin trials?
http://rctportal.niph.go.jp/en/detail?trial_id=JapicCTI-163438
http://rctportal.niph.go.jp/en/detail?trial_id=JapicCTI-163439
http://rctportal.niph.go.jp/en/detail?trial_id=JapicCTI-163467
I am not so sure of that 100 percent. I had 3 people look at this and even cursory review liver issues were raised and this was before NDA.
She most definitely thought it wasn't an issue and maybe that is why the issues were not properly explained. I thought it would get approved for sure.
But even right now one must consider the patent assets they have, plus $ 3.5 pps cash plus $4.00 pps net cash tax benefit and according to their investment banker ( MS) I think, this merge with a private company is the best path forward.
That is strange and I can't wait to read that filing!
I guess what I don't understand is that, the fda was aware of the liver injury signals at the conclusion of p2 (if I am not mistaken on this), and approved the trial to move on to p3.
It's not like this was a revelation that arose during the ad com, and the fda acted in real time to this "problem." Do I have that right, anyone?
And if I do have that right, I'm in agreement with whomever posted that the fda acted based on the roll call vote, which provided them cover to "cya" on what they believed was a difficult decision for them. And, had the vote been more in support of approval, these cowards would have fell in line, like good little bureacrats.
I think it's a Washington D.C. thing, where these politicians/bureaucrats care more about their jobs/salaries than making the right/courageous decision!
Cemp has about 3.25 in cash and another 4 dollars in tax benefits at current tax rates. They must also have credits as well.
I thought 100% this would be approved, my wife was 50 50 leaning towards approval.
But you cannot say this was just an FDA screwup, the Company CEO had alot to do with it. She repeatedly stated on calls this was totally safe and did not address the issues. I was on many calls, and if the FDA really had it in for Prabha why would they fastrack it.
At the very least they should have approved with warning and run a Phase 4 but my opinion doesn't count. Many of these small Bio's don't dot the i's and cross the t's. They should have known that on the safety side every trial is thrown into the mix, not just the indication they were trying to achieve.
On the bright side, the stock is at near all time lows and trading at cash. One year from now it may be a $40.00 stock. But I bet the FDA will continue to be a thorn if nothing else than to defend their previous ruling.
I did not realize just how poorly run some divisions of the FDA are. The 7-6 safety vote gave the division's director the chance to take it down. She wasn't going to jeopardize her job on the chance that someone dies (out of thousands saved)!
And it was also a nice way to stick it to (seemingly haughty) Prabha, per whatever personal reasons the director may have had...
The optics would have looked a lot different if the vote was 9-4 -- do you agree?
Demetre Daskalakis:
"3) I voted no, which was really a no on the side of maybe, mainly because of the fact that we don't really have the full story of hepatotoxicity. I think that that's where I can't really decide and feel confident in a yes, given that that's still missing. I think that the perspective that others could vote for no for this question is not necessarily a vote for no for recommending approval. That's not what this question asked, and so I put that out there to say that I vote for no with the idea that potentially being very stringent and if this drug is recommended for approval, since we do need new antibiotics, especially oral antibiotics for these conditions that produce the risks of some of the other complication for quinolones, I think that it's critical that again, the Phase 4 studies are every rigorous and very clear.
I also want to bring up the idea of is this a place where we think about a REMS, where we sort of create something where we realize there's an associated risk with the drug and that we give some sort of tool to be able to allow patients to access it and shift the risk balance by creating some sort of clear documentation that this a piece of the story of this drug as you use it in your practice."
Michael Green:
"Having said that, I actually asked a question which could have swayed my vote. I was trying to give the sponsor a potential out because they were putting this great surveillance in place and so I asked them, "What level or signal will make you pause, make you stop, make you hold, make you withdraw?" I couldn't get an answer. If they would have told me one or two cases would make them pause, I could have voted yes with an understanding that they would try to work out some sort of understanding with the FDA. Although I don't know whether that's even precedented or not. Yet we couldn't get that. I really do fear that we haven't answered the question.
Having said that, I'm not smart enough to know exactly how to do the study to get at answering the risk. I'm ambivalent. I'm absolutely desperate to see new drugs. I'm so thrilled that there are companies that are still trying to do drug development because if they don't do it we won't have them. Yet I think that this is a drug that is a ketolide, and we have not addressed the issue of whether the signal that we see will mean it is or it's not telithromycin part 2."
----------------------------------------------
"this question is not necessarily a vote for no for recommending approval" So say that you want it approved!
"I'm not smart enough to know exactly how to do the study to get at answering the risk." Then abstain!
Just bullshit ass-covering. Then the FDA messed up the meeting minutes and so on and so forth. Total catastrophe and a lesson in bureaucratic nonsense that kills people who no one with political clout will really fight for (unlike SRPT).
I am buying more but think management are boobs. Still hoping they get approval and looking for clarity with the merger.
You did predict approval by FDA in the past...
I bet the chief dish washer knows a lot! They must pay them well so that they keep those secrets, secrets.
I suppose you have possibly read my newest article on SA?
Agreed that they have everything here that they need to make a formidable company; Baxdela and solithromycin have a lot of potential.
Baxdela is the only fluoroquinolone to be approved for ABSSSI -- as far as I know. And fluoroquinolones (FQs) are known for two things:
(1) Tendon rupture. 2014: 21 confirmed cases of "FQ-associated disability" (https://en.wikipedia.org/wiki/Fluoroquinolone-associated_disability) out of 32.8m oral FQ prescriptions. That's pretty rare, though. But most also have QT prolongation, which Baxdela doesn't have. And it is very different from many other FQs.... so who knows.
(2) Their extreme potency. Baxdela is especially potent here in methicillin resistant Staphulococcus aureus, which is a big thing:
.MT @jcederholm: Prevalence of #AMR in the @WHO European Region #MRSA #AntibioticResistance @WHO_Europe pic.twitter.com/f76H7oWLGc
— Melinta Therapeutics (@MelintaTx) July 14, 2015
Yes, have you talked to chief dish washer there. I think they are shocked at the poor reaction.
Sounds crazy, buy buying here again. Limited risk right now trading at cash and hoping they don't make any other dumb mistakes. Certainly very good upside if the merger is really valued based on the numbers they laid out and if drug gets approved could be a 10 to 15 timer.
Stinks for the people in at 40 though
Melinta has a private market of common shares as well as Preferred Series 1 through 4.
Hercules Capital's latest SEC filings for June 2017 show they own $564K in warrants for Series 3 shares and $2.6M in Series 4 shares.
The warrants had gone from a valuation of $130K in Dec. 2015 to $100K to March 2016 to $564K in June 2017. That's an increase of over 300%. (They were originally bought for $622K a few years ago, but would be worth less even if the stock was worth the same, given time decay.) This suggests that Melinta's price has been rising substantially over the past few years.
We know based on Hercules' accounting of Series 4 equity, that they value it at about 30% higher than the beginning of the year -- the cost basis of those shares is $2M and they are worth $2.6M now.
Based on the number of Series 4 shares out, Melinta's Series 4 is worth $91m total. We don't know how to value the other equities, because we don't know how the Preferreds convert to common shares. We'll know when the proxy is out.
Finally, Melinta has a strong majority owner in Vatera Healthcare Partners, which invested in ~2014. Maybe they will even more (Cempra shares) after they are able to -- they can't do anything before the proxy docs are released because they have inside information on the company's finances.
This week all time lows for sure...is my bet. Pretty strange for a merger they evaluate at $10.00. and more cash in the bank than the stock is trading at..
Another example of poor leadership, organization and presentation. But might be a great buy.
Nearly hit all time low today
I thought you may have also posted on Seeking Alpha.
I tend to agree with you but it is bizarre that the best Pharma did not make an offer just based on the fact that the stock trades at cash. Even a $10.00 offer would have only cost them 500mil.
The patents need to be worth something, the cash is cash and Asia has to have some value. Plus this is a potentially life saving drug and new rules are in place. This could be a blockbuster and even if approved with or without a label it is suicide to market this without big Pharma as a partner at the very least.
My wife works at PFE and does trials and even a quick look she saw liver toxicity issues and gave it a 50 50 chance.
Very surprising that the best they could do was a reverse merge with a private company. 2 CEO's gone this year. The street doesn't think much of this management.
Of course, that can change on a dime with approvals.
"Are you associated with the Company?" No.
"I hope you are right, but do not know how you can state that definitively. Chances of a black box is significant, but there are lots of drugs with that label"
I spent a month looking at this. I read dozens of research papers. I found several blunders in the initial paper that sparked the Ketek mania, by the way. (and corrected it with a published comment)
My research leads me to conclude that solithromycin is 100% safe for CABP, and other indications as well.
"Patients on IV will most likely go home from hospital with the same script for oral. So the market is not small"
I know that. That's why they did an IV-to-oral trial. But that does not make it not smaller. It is much smaller. In a large 2009 insurance database analysis of about 12,500,000 people, 19.5% of CAP patients were hospital-bound. This is probably where Cempra gets its 20/80 revenue split idea, which the CEO mentioned in the CC. Then, adjust up by higher per-patient IV revenues but also adjust down because hospital-bound patients don't all take antibiotics by IV. Especially if that antibiotic has no adverse events: diarrhea was only experienced by 4%.
Only the sickest hospital patients would need an IV. In fact, I wouldn't be sure that it's even 20%.
Here is the link. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4031734/pdf/ahdb-06-494.pdf
Cemp just announced a merger that they value a $10 a share and they're trading under three, which is an amount less than the cash. That not only tells you what the market thinks of Cemp but it also tells you what the market thinks the chances of Cemp's success in getting this drug approved is. Friend was just on a call with VP and was told that all investment bankers think this M&A is the best way to proceed. What is discouraging is even at trading at par or below cash. I bet Cemp was shopped to many big Pharma and came up with the goose egg. Considering this drug would be a first in a new class of antibiotics that is shocking.
There is absolutely no doubt the drug is effective. There's no doubt that the past CEO not only bundled the FDA but also bungled what she stated on investor calls.
If CEMP gets forgets this approved it's a billion-dollar drug no doubt about it but now we're at least a year or longer away new antibiotic class and I hope Santa gets it through but the fact is they really screwed up with the FDA. As far as sent and this new entity being a second line they will have to partner with a very big company.
As far as current M&A the merge partner had approval since June on a product and it has not been marketed, not very encouraging.
They need a CEO. CEMP management needs to go and as you stated, they have loaded the boat with options for themselves.
The only way this deal will even get done is if they do a much better presentation at Proxy time. So if they value the new company at $10.00 they need to convince the market to get this above $6.00 or $7.00 IMO. Otherwise why vote for it.
No message here, nvm.
I disagree with some of this.
IV is not more profitable because it's a numbers game. Cempra had estimated that 80% of their revenues would be from oral.
"If they do get approval with oral they still are a second line antibiotic."
You are assuming facts not in evidence. There is absolutely no reason to believe that it will be a second-line antibiotic. There will be another PDUFA. As it is, the adcom's consensus was not even close to what the FDA wanted in the CRL. A couple thousand, like many "no" (to safety) voters said, is not 9,000. One "no" voter said he's not voting "no" for approval. Another said he would have voted "yes" if Cempra had a definitive safety plan in place, which was really stupid because these things are not determined before the adcom.
The meeting minutes were absolutely misleading and inaccurate in summarizing the transcript, as well.
The FDA division head in the anti-infectives division has an agenda or is completely incompetent. She will not be able to twist the facts once a second adcom is convened. Many of the (also incompetent) adcom members, with a 6,000 person safety study, would be unequivocal.
And Cempra's CEO was incompetent in that meeting as well.
But solithromycin, the drug, is valuable and safe. I have no doubt about it. Nor about the fact that solithromycin will replace azithromycin and be a multibillion dollar drug.
Totally agree call was hugely bungled. They had over a week to prepare. At least 9 days. Def. think many ex-US partnerships is a sign Baxdela has good value. It stands out in safety and efficacy as I mentioned on SA. There's still the warning label which all drugs in this class have. I wish they could show the FDA's research on the subject though, in order to reflect how rare those side-effects are.
And even though they are stupid rare, they are also very serious (sometimes). Serious liver macrolide side effects are a magnitude rarer although possibly more serious. And I still think solithromycin is the safest of all the currently-available macrolides.
Finally, I'll say this: maybe management will be happy with the scraps they get as severance/golden parachutes. But they need the price to go way up to make anything on their options, so maybe they will finally work on that towards the end? Although, I guess they could always issue themselves more options.
I 100% agree that IV is more difficult to enroll and most likely more expensive. But the press release was a bit sketchy because these Bozo's made it sound like they did some great negotiating with the FDA. Moreover, the larger and quicker sales will come from a hospital setting where it is life and death. This is also more profitable. If they do get approval with oral they still are a second line antibiotic. The CT company also has little or no experience in rolling out a drug. Hopefully, if the trial goes well they Partner with big Pharma. As big as PFE is Eloquis is still growing sales 2 years later.
The call was about the worse I have ever been on. They have numbers, the BOD would have had to have reviewed numbers before approving this. Of course you would know what the cap structure is and what debt is.
Cemp is trading under NET cash right now, that is how badly they bungled call. The overseas partners seem top rate.
The simple math they use outs the new entity at around the $10.00 mark. Since $3. is cash, when you add in Japan and the patents one would hope this shakes out close to 10 but they are dumbas**s
IV would be too expensive to enroll. Better get the sales first.
You can bet there will be a new adcom once they finish the trial. In the first adcom, the result was actually much better than what the FDA suggested. A couple thousand, many voting "no" said. There will be no label restrictions after the new adcom and it will be the new standard, surpassing zithro/azitromycin sales.
Finally: IV is expensive per patient, but a much smaller market.
SEC docs being filed. They are long and some over 200 pages.
So, if you can believe these dumbarse numnuts, the filings state
Cemp valued at 500 million
New Company 520 million
Cemp gets 48% New Company 52%
Without synergies this would put the stock at $9.00 valuation..
That is of course, if you believe the valuations..
As far as Cemp, the FDA break is a bit misleading. The trial size has been cut down but the intravenous indication has been removed. Oral is easier for approval, but intravenous would be from extremely sick patients in hospitals and would be a higher price point.
Oral would still be a second line antibiotic behind a generic.
The presentation was horrible...They are dumb Arss*s. It might be a good buy now. They had zero details. Called CEO - another Bozo. Of course they had details the Boards had to vote on it.
More info should be coming soon. The International Partners of new company are very strong.
The market wasn't at all fond of the merger announcement. Down 22%.
Why we didn't ally with a company with some major marketing/sales establishment resources is beyond me.
The possible advantage is getting rid ( at considerable cost) of management but we get an unknown set instead.
Melinta seems to come with considerable built in liability and a poor long term prospect.
Hope they are bringing a whole lot of cash to the deal.
Will give more feedback later, but the FDA decision is huge.
Yep, merger!!
Agreement with FDA for a smaller study and a merger...Not bad start.
CEMP HALTED...
This could be it, hopefully sold.
Assuming they are still progressing with the clinical trial(s) , then they aren't entirely rudderless.
Most small clinical stage bios wallow around between trials results.
Traded below 4...Next week big week. They are rudderless and should address progress regarding if company selling
Good luck with that, you could follow the class action lawsuits filed against them.
Maybe, but they will burn right through cash. Right now looks like everything suspended and staff cut. The cash is good because it could give a multiple if buyout happens. If nothing happens after the 9th that would stink for shareholders.
It is a shame, life saving drug, new class of antibiotic, FDA fast track, Government funding for child indication, 9-0 vote on efficacy and management somehow screwed up on safety after getting to put in NDA.
Such the way of Biotechs.
Johnny:
Given that we have enough $ to keep operating and the fusidic acid study in process; would it be reasonable to keep slugging forward and see if we can get a drug approved?
I'm assuming that the first rejection was, um, educational and the same mistake can be avoided.
We suffered a massive disappointment, but we ain't dead yet.
We need to find out what the problem is and fix it!
The safety threat is unlikely to be worse than the harsh old last resort drugs they are dragging out in desperation now.
A buyout for 10 or more would be a win right now, I think.
That will not happen. They are to small, don't have any leverage and must have done something to really tick the FDA off. The FDA previously fast tracked company. My guess is she was stating things that the FDA accepted in conferences and they were not true.
When safety is involved, all testing of the drug is evaluated not just limited trials.
Very unfortunate, From 40 to 3 in the blink of an eye, or it seemed.
I'd happily settle for successful negotiations with the FDA to work to reasonably resolve the reasons for our recent rejection.
The FDA itself has changed management and it's general posture to some degree and could be amenable to reassess our status .
Getting a drug to deal with drug resistant bacteria on the market would be a fat feather in their cap about now. Ours too.
Strong close, been averaging 700k volume.
am back in at 3 but might pick up more, the 9th should be interesting
trading at close to cash and one would have to think these patents are worth something to a company who might have better luck with the FDA
Investor call 8/9...will they have a deal...OR not...
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