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Cempra to weigh options
Posted on Tuesday, 14 March 2017 12:06
Cempra finished 4.2 per cent higher yesterday with a capitalisation of USD 196.47 million following news the US infectious diseases drug developer has hired an advisor for the strategic review announced at the end of February.
During results for the full year ended 31st December 2016, the North Carolina-based company, which is focused on bacteria picked up in acute and community settings, said it had made substantial progress on existing programmes.
However, the receipt of a complete response letter from the Food and Drug Administration (FDA) in December relating to new drug applications (NDAs) for oral and intravenous solithromycin has set off a chain reaction culminating in a review.
Basically, the watchdog would not sign off on NDAs for the drugs targeting community-acquired bacterial pneumonia in their present form.
The FDA noted it required additional clinical safety information and the satisfactory resolution of manufacturing facility inspection deficiencies before it would approve the applications.
Following this, Cempra started developing a protocol in reply to the complete response letter and noted should the two agree on this process then the company would “seek non-dilutive funding to support the execution of the study”.
It also kicked off a corporate restructuring which included making staff redundant and cutting costs related to commercial preparedness and non-essential activities.
At the same time Cempra initiated a process to evaluate and assess external late-stage assets and other potential strategic business opportunities.
Two weeks later and the company has hired Morgan Stanley on the review to find the best use of the significant cash resources of USD 231.60 million on its balance sheet at the end of December 2016.
Cempra’s shares have slumped since the end of October after announcing during results for the third quarter that the FDA may not approach the Indian manufacturing plant, which would delay approval for at least nine months.
At this point last year, the company closed at USD 16.94 - compare this to the USD 3.75 finish yesterday.
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