(Reuters) – Melinta Therapeutics Inc said on Friday it had filed for bankruptcy protection, becoming the latest casualty of a persistent cash burn in the antibiotic industry.
The drugmaker, which has four antibiotics on the market, warned that it was running out of cash last month.
Global health officials have repeatedly warned about the rise of bacteria and other microbes that are resistant to most drugs due to their overuse, prompting health agencies to push for newer versions of antibiotics.
However, antibiotics are relatively cheap and are more effective the less they are used, making profitability hard to achieve.
Larger drugmakers, including AstraZeneca Plc, Novartis and Sanofi SA, have stopped developing antibiotics, while smaller players such as Achaogen Inc have filed for bankruptcy.
Melinta, which filed for Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware, said lenders would acquire the company by exchanging $140 million of claims under their credit facility for all of the company’s equity.
The company’s shares were down 53% at 70 cents on Friday. They are down 62% for the year through Thursday close.
Reporting by Dania Nadeem in Bengaluru; Editing by Anil D’Silva