GERMANTOWN, Md. MiddleBrook Pharmaceuticals is selling its antibiotic line to a shareholder in hopes that the money will be used to develop a sale or partnerships with another company, according to reports.
The Keflex antibiotic (cephalexin) line will be sold to Deerfield Management, a health care investment fund and one of the company’s biggest shareholders, for $7.5 million.
The deal allows Germantown, Md.-based MiddleBrook to pay off the balance of an $8 million Merrill Lynch loan, and may also provide the company with an additional monies if it is able to market and sell other innovations for the antibiotic line, the Washington Business Journal reported.
Under the deal, MiddleBrook will license back its Keflex brand and continue managing that business, paying up to 20 percent of sales in royalties to Deerfield. If MiddleBrook chooses to buy back the line, it must pay Deerfield over $11 million and upwards within one year of selling the biotech products.
MiddleBrook, formerly Advancis Pharmaceutical, is selling the antibiotic line in order to expand its marketing initiatives in the biotech industry.
Meanwhile, if another company purchases MiddleBrook, it must buy back the Keflex products, according to the terms of its deal with Deerfield.
“We are pleased to enter into this agreement with Deerfield as it provides us with the financial flexibility to continue our strategic discussions” beyond January, Rudnic said. “This agreement will also allow us to repay our loan facility with Merrill Lynch, which has restricted our use of cash and other corporate assets.”