Malin Corporation - Melinta reverse merger with Cempra Inc.

Davy Research
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We are positive on Melinta’s proposed merger with Cempra Inc. The new entity will have a broad portfolio of innovative anti-infective offerings. This is an important area given increasing resistance levels to traditional antibiotics. Melinta should also benefit from Cempra’s balance sheet strength (cash c.$203m) in bringing its pipeline to market. Although Malin’s shareholding in the combined entity is initially dilutive, we believe that the market should react favourably over time to Melinta’s promising pipeline and the integrated anti-infectives platform the merger creates.