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12:00 AM
 | 
Jan 19, 2009
 |  BioCentury  |  Strategy

An acute bargain

By asking Targanta Therapeutics Corp. to run a new Phase III trial of oritavancin in complicated skin and skin structure infections last December, FDA sealed the company's fate in the current financing environment. But it gave The Medicines Co. the chance to expand its acute care business with a late-stage antibiotic for less than the typical upfront payment in a partnering deal.

Medicines Co. last week said it would acquire Targanta for $2 per share, or about $42 million in cash. The price is a 72% premium to Targanta's close of $1.16 last Monday, before the deal was announced.

Targanta shareholders are eligible for up to an additional $4.55 per share, or about $95.5 million, in regulatory and sales milestones related to IV oritavancin, a lipoglycopeptide antibiotic that is the company's only compound. Medicines Co. Chairman and CEO Clive Meanwell told BioCentury that by the time the deal closes in late February, Targanta will have no cash.

The deal is clearly a bargain. For 18 licensing deals for Phase III compounds where...

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