BioTech

Cempra Inc. (NASDAQ:CEMP) Acquisition Target Reports Trial Results

Cempra Inc. (NASDAQ:CEMP)

Cempra Inc. (NASDAQ:CEMP)

Shares of Cempra Inc. (NASDAQ:CEMP) gained 1.59% after the company’s proposed acquisition, Melinta Therapeutics, announced the successful completion of a Phase 1 clinical study of a novel treatment for acne vulgaris. Preliminary results indicate that candidate drug, radezolid, was well tolerated with minimal systematic absorption.

Cempra Inc. (NASDAQ:CEMP),

Cempra-Melinta Merger

The positive clinical trial results continue to strengthen investor confidence on Cempra Inc. (NASDAQ:CEMP), pending completion of a merger of the two companies. Melinta and Cempra are close to merging after the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Both companies expect the merger to be completed in the fourth quarter, subject to satisfaction of closing conditions.

A push to acquire the privately held commercial-stage company is yet to have a significant impact on Cempra sentiments on Wall Street. The stock is still trading in a downtrend after struggling to rise above $4.70. CEMP is unchanged for the year as it continues to trade at levels last seen in January.

According to data compiled by Zack Investment Research, Cempra Inc. (NASDAQ:CEMP) is currently rated as ‘strong buy’ by one investment firm.

Melinta posting positive results on its novel treatment for mild to moderate acne vulgaris is a milestone achievement. The candidate drug not only justifies Cempra’s acquisition bid, but should strengthen the company’s pipeline of drugs.

Acne Treatment Opportunity

Acne treatments present a unique opportunity for Cempra, as it is one of the most commonly treated skin disorders and affects over 50 million Americans. Resistance to antimicrobial treatments has reportedly reached 66%.

“The results of the Phase 1 study as well as earlier testing against resistant isolates show that radezolid may have the potential to be an important treatment option for clinicians and their patients,” stated Eugene Sun, M.D., Melinta’s chief executive officer.

Melinta’s Therapeutics will carry out a 12-week randomized double-blind Phase 2 proof of concept trial to evaluate the efficacy of radezolid in approximately 48 individuals with mild to severe facial acne vulgaris. The primary endpoints of the trial will include Investigators Global Assessment score and absolute change in baseline of acne lesion.

Separately, Eurofarma Laboratories has expanded its commercialization and distribution agreement for Melintas Therapeutics’ delafloxacin drug to include 19 countries. According to the company, there is strong demand for acute skin bacteria treatment agents in Latin America.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Monica has an undergraduate degree in Accounting and an MBA she earned – with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.

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Monica has an undergraduate degree in Accounting and an MBA she earned - with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.

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