Report of unscheduled material events or corporate event

Document - velhartice.info


    


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
____________
FORM 8‑K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): January 5, 2018

The Medicines Company
(Exact Name of Registrant as Specified in Charter)
Delaware
 
000-31191
 
04-3324394
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
                     

8 Sylvan Way
Parsippany, New Jersey
 
07054
(Address of Principal Executive Offices)
 
(Zip Code)

Registrant's telephone number, including area code: (973) 290-6000

 
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company    o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.                                                     o




Item 2.01. Completion of Acquisition or Disposition of Assets.
 
 
On January 5, 2018, The Medicines Company, a Delaware corporation (the “Company”), completed the previously disclosed sale of its infectious disease business (the "Business"), including the products Vabomere™, Orbactiv® and Minocin® IV and line extensions thereof, and substantially all of the assets related thereto, other than certain pre-clinical assets, to Melinta Therapeutics, Inc., a Delaware corporation (“Melinta”) pursuant to the Purchase and Sale Agreement dated November 28, 2017 (the “Purchase Agreement”) by and between Melinta and the Company (the "Transaction"). At the closing of the Transaction, the Company received approximately $166.4 million and 3,313,702 shares of Melinta common stock having a market value, based on Melinta's closing share price on January 5, 2018 of approximately $54.5 million. In addition, the Company is entitled to receive (i) a cash payment payable 12 months following the closing of the Transaction equal to $25 million; (ii) a cash payment payable 18 months following the closing of the Transaction equal to $25 million; and (iii) tiered royalty payments of 5% to 25% on worldwide net sales of (a) Vabomere and (b) Orbactiv and Minocin IV collectively. The consideration for the Transaction also included the assumption by Melinta of all royalty, milestone and other payment obligations relating to Vabomere, Orbactiv and Minocin IV. The full text of the press release issued by the Company in connection with the closing of the Transaction is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
In connection with the completion of the sale of the Business, the Company is filing as Exhibit 99.2 hereto certain pro forma financial information giving pro forma effect to the sale of the Business as of the dates indicated therein.
Item 9.01    Financial Statements and Exhibits.
 
(b)     Pro forma financial information:

Attached as Exhibit 99.2 hereto and incorporated by reference are an unaudited pro forma condensed consolidated balance sheet as of September 30, 2017 and unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2017 and the years ended December 31, 2016, 2015 and 2014, in each case giving pro forma effect to the sale of the Business.

(d)     Exhibits:
 
See the Exhibit Index attached hereto.

Exhibit Index

Exhibit
 
 
Number
 
Description
 
Press release issued by The Medicines Company on January 8, 2018
 
Proforma financial information


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




 
THE MEDICINES COMPANY
 
 
Date: January 11, 2018
By:
/s/ Stephen M. Rodin
 
Stephen M. Rodin
 
 
 
 
Executive Vice President and General Counsel


Exhibit - velhartice.info
EX - 99.1
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11982156&doc=4
The Medicines Company
8 Sylvan Way
Parsippany, NJ 07054

 





Contacts:

Media
Meg Langan
Vice President
(973) 290-6319

Investor Relations
Krishna Gorti, M.D.
Vice President, Investor Relations
(973) 290-6122
[email protected]


FOR IMMEDIATE RELEASE

The Medicines Company Announces Closing of Divestiture of Infectious Disease Business Unit to Melinta Therapeutics
PARSIPPANY, N.J. – January 8, 2018 – The Medicines Company (NASDAQ: MDCO) today announced the closing of the sale of its infectious disease business unit to Melinta Therapeutics, Inc. (NASDAQ: MLNT) for consideration consisting of $215 million of guaranteed cash, approximately 3.3 million shares of Melinta common stock, tiered royalty payments of 5% to 25% on worldwide net sales of Vabomere™, Orbactiv® and Minocin® IV, and the assumption by Melinta of all royalty, milestone and other payment obligations relating to those products.
“The sale of our infectious disease business to Melinta Therapeutics successfully completes a crucial step in the Company’s strategic evolution, which we initially outlined in late 2015,” said Clive Meanwell, M.D., Ph.D., Chief Executive Officer of The Medicines Company. “The transaction positions the Company to complete the implementation of our previously-announced restructuring and apply our resources to the aggressive development of inclisiran, a first-in-class drug for lowering bad cholesterol (LDL-C). We will now focus on this potentially transformational new treatment option, expecting to make it broadly available to the millions of at-risk, often non-adherent, patients worldwide who carry the potentially deadly and costly risk of high LDL-C. The transaction significantly strengthens the Company’s financial position, substantially reduces our cost structure and provides cash and liquidity which we believe will allow us to advance inclisiran through the anticipated completion of the ongoing Phase III development program and clinical data readout in the second half of 2019, and also fund associated manufacturing development as well as the recruitment with initial follow-up of our cardiovascular outcomes trial, without


The Medicines Company


the need to sell equity in the Company. Furthermore, the transaction provides the opportunity to generate significant additional value through a robust royalty structure on future sales of our divested ID products and the ownership of a substantial equity stake in Melinta. That continuing interest reflects our enormous confidence in Melinta and its management team and employees. We are delighted that many of our former infectious disease colleagues have joined Melinta and now have the opportunity to solidify its position as the world’s leading, pure-play antibiotics company.”
The Company expects to provide additional details regarding its cash position and plans as part of its fourth quarter and full year 2017 financial results.

About The Medicines Company
The Medicines Company is a biopharmaceutical company driven by an overriding purpose – to save lives, alleviate suffering and contribute to the economics of healthcare. The Company’s mission is to create transformational solutions to address the most pressing healthcare needs facing patients, physicians and providers in cardiovascular care. The Company is headquartered in Parsippany, New Jersey.
Forward-Looking Statements
Statements contained in this press release about The Medicines Company that are not purely historical, and all other statements that are not purely historical, may be deemed to be forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Without limiting the foregoing, the words "believes," "anticipates" "expects" and “potential” and similar expressions, are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. Important factors that may cause or contribute to such differences include the ability of the Company to successfully achieve the expense reduction expected to result from the transaction and restructuring; the commercial success of the infectious disease assets acquired by Melinta; the ability of the Company to effectively develop inclisiran; and such other factors as are set forth in the risk factors detailed in the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2017, which are incorporated herein by reference. The Company specifically disclaims any obligation to update these forward-looking statements.


Exhibit - velhartice.info


Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

On January 5, 2018, The Medicines Company, a Delaware corporation (the “Company”), completed the previously disclosed sale of its infectious disease business (the "Business"), including the products Vabomere™, Orbactiv® and Minocin® IV and line extensions thereof, and substantially all of the assets related thereto, other than certain pre-clinical assets, to Melinta Therapeutics, Inc., a Delaware corporation (“Melinta”) pursuant to the Purchase and Sale Agreement dated November 28, 2017 (the “Purchase Agreement”) by and between Melinta and the Company (the "Transaction"). At the closing of the Transaction, the Company received approximately $166.4 million and 3,313,702 shares of Melinta common stock having a market value, based on Melinta's closing share price on January 5, 2018 of approximately $54.5 million. In addition, the Company is entitled to receive (i) a cash payment payable 12 months following the closing of the Transaction equal to $25 million; (ii) a cash payment payable 18 months following the closing of the Transaction equal to $25 million; and (iii) tiered royalty payments of 5% to 25% on worldwide net sales of (a) Vabomere and (b) Orbactiv and Minocin IV collectively. The consideration for the Transaction also included the assumption by Melinta of all royalty, milestone and other payment obligations relating to Vabomere, Orbactiv and Minocin IV.
As a result of the Transaction, the results of operations of the Business for all periods prior to the Transaction will be presented as discontinued operations in the Consolidated Statements of Operations for all periods presented, which will be included in the annual financial statements to be filed on Form 10-K for the year ended December 31, 2017.
The unaudited pro forma condensed consolidated balance sheet as of September 30, 2017 has been prepared to give effect to the sale of the Business as if it occurred on September 30, 2017. The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2017 and the years ended December 31, 2016, 2015 and 2014 have been prepared to give effect to the sale of the Business as if it occurred on January 1, 2014.

The unaudited pro forma condensed consolidated financial information was prepared utilizing our historical financial data derived from the unaudited condensed consolidated financial statements included in our Quarterly Report on Form 10-Q filed with the SEC on November 9, 2017 and from the audited consolidated financial statements for the year ended December 31, 2016 included in our Annual Report on Form 10-K filed with the SEC on March 1, 2017. The unaudited pro forma condensed consolidated financial statements reflect pro forma adjustments that are based on preliminary estimates and assumptions and other information available at the time of preparation. The Company believes that all such adjustments are (i) directly attributable to the sale of the Business, (ii) factually supportable, and (iii) expected to have a continuing impact on the Company’s future consolidated results of operations or financial condition. The pro forma adjustments are described in the notes to the unaudited pro forma information and are based upon available information and assumptions that we believe are reasonable.

The unaudited pro forma condensed consolidated financial information included herein is for informational purposes only and is not necessarily indicative of what the Company's financial performance and financial position would have been had the Transaction been completed on the dates assumed nor is such unaudited pro forma condensed consolidated financial information necessarily indicative of the results to be expected in any future period. Actual results may differ significantly from those reflected in the unaudited pro forma condensed consolidated financial statements for various reasons, including but not limited to, the differences between the assumptions used to prepare the unaudited pro forma condensed consolidated financial statements and actual results.





THE MEDICINES COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2017
(in thousands)
 
The Medicines Company Historical
 
Sale of Business
 
 
 
Pro Forma
ASSETS
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
166,734

 
$
166,383

 
(a)
 
$
333,117

Available for sale securities
42,168

 
54,510

 
(a)
 
$
96,678

Accounts receivable, net
7,793

 
(4,223
)
 
(a)
 
3,570

Inventory, net
67,169

 
(42,850
)
 
(a)
 
24,319

Prepaid expenses and other current assets
13,974

 
18,366

 
(a)
(b)
 
32,340

Total current assets
297,838

 
192,186

 
 
 
490,024

Fixed assets, net
18,022

 

 
 
 
18,022

Developed product rights, net
285,965

 
(285,965
)
 
(a)
 

Goodwill
255,629

 
(48,109
)
 
(a)
 
207,520

Restricted cash
5,048

 

 
 
 
5,048

Contingent purchase price from sale of business
143,700

 
214,000

 
(a)
(b)
 
357,700

Other assets
778

 
20,840

 
(a)
(b)
 
21,618

Total assets
$
1,006,980

 
$
92,952

 
 
 
$
1,099,932

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
Accounts payable
$
11,698

 
$
(2,869
)
 
(a)
 
$
8,829

Accrued expenses
81,246

 
(13,625
)
 
(a)
 
67,621

Current portion of contingent purchase price
28,700

 
(24,400
)
 
(a)
 
4,300

Deferred revenue
7,269

 

 
 
 
7,269

Total current liabilities
128,913

 
(40,894
)
 
 
 
88,019

Contingent purchase price
34,183

 
(18,083
)
 
(a)
 
16,100

Convertible senior note
642,655

 

 
 
 
642,655

Other liabilities
13,174

 

 
 
 
13,174

Total liabilities
818,925

 
(58,977
)
 
 
 
759,948

Stockholders’ equity:
 
 
 
 
 
 
 
Preferred stock, $1.00 par value per share, 5,000,000 shares authorized; no shares issued and outstanding

 

 
 
 

Common stock, $0.001 par value per share, 187,500,000 shares authorized; 75,791,437 issued and 72,778,294 outstanding at September 30, 2017
76

 

 
 
 
76

Additional paid-in capital
1,362,040

 

 
 
 
1,362,040

Treasury stock, at cost; 3,013,1432 shares at September 30, 2017
(90,016
)
 

 
 
 
(90,016
)
Accumulated deficit
(1,079,096
)
 
150,802

 
(a)
(b)
(d)
 
(928,294
)
Accumulated other comprehensive income (loss)
(4,949
)
 
1,127

 
(a)
 
(3,822
)
Total stockholders’ equity
188,055

 
151,929

 
 
 
339,984

Total liabilities and stockholders’ equity
$
1,006,980

 
$
92,952

 
 
 
$
1,099,932


See accompanying notes to unaudited pro forma condensed consolidated financial information.





THE MEDICINES COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017
(in thousands, except per share amounts)

 
The Medicines Company Historical
 
Sale of Business
 
 
 
Pro Forma
Net product revenues
$
38,135

 
$
(23,635
)
 
(c)
 
$
14,500

Royalty revenues
21,694

 

 
 
 
21,694

Total net revenues
59,829

 
(23,635
)
 
 
 
36,194

Operating expenses:
 
 
 
 
 
 
 
Cost of product revenue
39,436

 
(12,681
)
 
(c)
 
26,755

Asset impairment charges
329,097

 

 
 
 
329,097

Research and development
117,337

 
(34,010
)
 
(c)
 
83,327

Selling, general and administrative
159,980

 
(57,632
)
 
(c)
 
102,348

Total operating expenses
645,850

 
(104,323
)
 
 
 
541,527

Loss from operations
(586,021
)
 
80,688

 
 
 
(505,333
)
Co-promotion and license income
2,283

 

 
 
 
2,283

Interest expense
(36,898
)
 

 
 
 
(36,898
)
Other income (expense)
916

 
676

 
(c)
 
1,592

Loss before income taxes
(619,720
)
 
81,364

 
 
 
(538,356
)
Benefit for income taxes
89,607

 
(66,637
)
 
(c)
 
22,970

Loss from continuing operations
$
(530,113
)
 
$
14,727

 
 
 
$
(515,386
)
 
 
 
 
 
 
 
 
Loss from continuing operations per common share:
 
 
 
 
 
 
 
Basic
$
(7.39
)
 
 
 
 
 
$
(7.18
)
Diluted
$
(7.39
)
 
 
 
 
 
$
(7.18
)
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
71,763

 
 
 
 
 
71,763

Diluted
71,763

 
 
 
 
 
71,763


See accompanying notes to unaudited pro forma condensed consolidated financial information.





THE MEDICINES COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2016
(in thousands, except per share amounts)

 
The Medicines Company Historical
 
Sale of Business
 
 
 
Pro Forma
Net product revenues
$
96,630

 
$
(24,673
)
 
(c)
 
$
71,957

Royalty revenues
71,205

 

 
 
 
71,205

Total net revenues
167,835

 
(24,673
)
 
 
 
143,162

Operating expenses:
 
 
 
 
 
 
 
Cost of revenue
71,347

 
(11,993
)
 
(c)
 
59,354

Research and development
139,262

 
(46,986
)
 
(c)
 
92,276

Selling, general and administrative
319,151

 
(106,670
)
 
(c)
 
212,481

Total operating expenses
529,760

 
(165,649
)
 
 
 
364,111

Loss from operations
(361,925
)
 
140,976

 
 
 
(220,949
)
Co-promotion and profit share income
3,854

 

 
 
 
3,854

Gain on sale of assets
288,301

 

 
 
 
288,301

Loss on extinguishment of debt
(5,380
)
 

 
 
 
(5,380
)
Interest expense
(44,463
)
 

 
 
 
(44,463
)
Other income (expense)
327

 
19

 
(c)
 
346

(Loss) income before income taxes
(119,286
)
 
140,995

 
 
 
21,709

(Provision) benefit for income taxes
(70
)
 
(206
)
 
(c)
 
(276
)
Loss (income) from continuing operations
(119,356
)
 
140,789

 
 
 
21,433

Loss from continuing operations attributable to non-controlling interest
54

 

 
 
 
54

(Loss) income from continuing operations attributable to The Medicines Company
$
(119,302
)
 
$
140,789

 
 
 
$
21,487

 
 
 
 
 
 
 
 
(Loss) income from continuing operations per common share attributable to The Medicines Company:
 
 
 
 
 
 
 
Basic
$
(1.71
)
 
 
 
 
 
$
0.31

Diluted
$
(1.71
)
 
 
 
 
 
$
0.29

 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
69,909

 
 
 
 
 
69,909

Diluted
69,909

 
 
 
 
 
73,022


See accompanying notes to unaudited condensed consolidated pro forma financial information.





THE MEDICINES COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2015
(in thousands, except per share amounts)

 
The Medicines Company Historical
 
Sale of Business
 
 
 
Pro Forma
Net product revenues
$
255,148

 
$
(14,460
)
 
(c)
 
$
240,688

Royalty revenues
53,859

 

 
 
 
53,859

Total net revenues
309,007

 
(14,460
)
 
 
 
294,547

Operating expenses:
 
 
 
 
 
 
 
Cost of revenue
119,931

 
(15,905
)
 
(c)
 
104,026

Research and development
123,606

 
(33,216
)
 
(c)
 
90,390

Selling, general and administrative
337,943

 
(52,682
)
 
(c)
 
285,261

Total operating expenses
581,480

 
(101,803
)
 
 
 
479,677

(Loss) from operations
(272,473
)
 
87,343

 
 
 
(185,130
)
Co-promotion and profit share income
10,132

 

 
 
 
10,132

Gain on remeasurement of equity investment
22,597

 

 
 
 
22,597

Gain on sale of investment
19,773

 

 
 
 
19,773

Legal settlement
5,000

 

 
 
 
5,000

Interest expense
(37,092
)
 

 
 
 
(37,092
)
Other income
400

 
(194
)
 
(c)
 
206

(Loss) from continuing operations before income taxes
(251,663
)
 
87,149

 
 
 
(164,514
)
Benefit for income taxes
29,743

 
(12,809
)
 
(c)
 
16,934

Loss income from continuing operations
(221,920
)
 
74,340

 
 
 
(147,580
)
Loss from continuing operations attributable to non-controlling interest
(10
)
 

 
 
 
(10
)
(Loss) from continuing operations attributable to The Medicines Company
$
(221,930
)
 
$
74,340

 
 
 
$
(147,590
)
 
 
 
 
 
 
 
 
Loss from continuing operations per common share attributable to The Medicines Company:
 
 
 
 
 
 
 
Basic
$
(3.32
)
 
 
 
 
 
$
(2.21
)
Diluted
$
(3.32
)
 
 
 
 
 
$
(2.21
)
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
Basic
66,809

 
 
 
 
 
66,809

Diluted
66,809

 
 
 
 
 
66,809


See accompanying notes to unaudited pro forma condensed consolidated financial information.





THE MEDICINES COMPANY
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2014
(in thousands, except per share amounts)

 
The Medicines Company Historical
 
 
Sale of Business
 
 
 
Pro Forma
Net product revenues
$
659,690

 
 
$
(2,157
)
 
(c)
 
$
657,533

Operating expenses:
 
 
 
 
 
 
 
 
Cost of revenue
233,330

 
 
(4,816
)
 
(c)
 
228,514

Research and development
139,512

 
 
(43,255
)
 
(c)
 
96,257

Selling, general and administrative
314,954

 
 
(30,844
)
 
(c)
 
284,110

Total operating expenses
687,796

 
 
(78,915
)
 
 
 
608,881

(Loss) income from operations
(28,106
)
 
 
76,758

 
 
 
48,652

Co-promotion and profit share income
24,236

 
 

 
 
 
24,236

Legal settlement
25,736

 
 

 
 
 
25,736

Loss in equity investment
(1,711
)
 
 

 
 
 
(1,711
)
Investment impairment
(7,500
)
 
 

 
 
 
(7,500
)
Interest expense
(15,701
)
 
 

 
 
 
(15,701
)
Other income
918

 
 

 
 
 
918

(Loss) income from continuing operations before income taxes
(2,128
)
 
 
76,758

 
 
 
74,630

Benefit (provision) for income taxes
2,309

 
 
(18,725
)
 
(c)
 
(16,416
)
Income from continuing operations
181

 
 
58,033

 
 
 
58,214

Loss from continuing operations attributable to non-controlling interest
138

 
 

 
 
 
138

Income from continuing operations attributable to The Medicines Company
$
319

 
 
$
58,033

 
 
 
$
58,352

 
 
 
 
 
 
 
 
 
Income from continuing operations per common share attributable to The Medicines Company:
 
 
 
 
 
 
 
 
Basic
$

 
 
 
 
 
 
$
0.91

Diluted
$

 
 
 
 
 
 
$
0.88

 
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
 
 
 
Basic
64,473

 
 
 
 
 
 
64,473

Diluted
66,668

 
 
 
 
 
 
66,668


See accompanying notes to unaudited pro forma condensed consolidated financial information.





THE MEDICINES COMPANY
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION


Sale of Business
On January 5, 2018, the Company completed the previously disclosed sale of the Business pursuant to the Purchase Agreement. At the completion of the sale, the Company received approximately $166.4 million and 3,313,702 shares of Melinta common stock having a market value, based on Melinta's closing share price on January 5, 2018, of approximately $54.5 million. In addition, the Company is entitled to receive (i) a cash payment payable 12 months following the closing of the Transaction equal to $25 million; (ii) a cash payment payable 18 months following the closing of the Transaction equal to $25 million; and (iii) tiered royalty payments of 5% to 25% on worldwide net sales of (a) Vabomere and (b) Orbactiv and Minocin IV collectively. The consideration for the Transaction also included the assumption by Melinta of all royalty, milestone and other payment obligations relating to Vabomere, Orbactiv and Minocin IV.
Pro Forma Adjustments
(a)
Represents adjustments to reflect the disposition of the assets and liabilities associated with the Business in connection with the transaction described above for consideration with an estimated fair value of $477 million, consisting of $215 million of guaranteed cash with an estimated fair value of $208 million, approximately 3.3 million shares of Melinta common stock with an estimated fair value of $54.5 million and, tiered royalty payments of 5% to 25% on worldwide on worldwide net sales of (a) Vabomere and (b) Orbactiv and Minocin IV collectively with an estimated fair value of $214 million. The assets to be disposed of primarily include developed product rights with a net book value of $286.0 million, goodwill of $48.1 million, inventory of $42.9 million, and accounts receivable of $4.2 million. The liabilities to be disposed of primarily consist of the estimated fair value of the contingent purchase price liabilities of $42.5 million, accrued expenses of $13.6 million and accounts payable of $2.9 million.

(b)
Represents the delayed cash payments and tiered royalty payments measured at fair value due to the Company from Melinta included in the Purchase Agreement.

(c)
Represents adjustments to eliminate the direct operating results of the Business as if the disposition occurred on January 1, 2014. Adjustments to cost of product revenue, research and development, and selling, general and administrative expenses include amounts that are directly related to the Business and that will be eliminated post-closing of the Transaction. Adjustment to the income tax benefit (provision) for the year ended December 31, 2016 was based on statutory rates in effect during that period. For the nine months ended September 30, 2017 and the years ended December 31, 2015 and 2014, the adjustments to the income tax benefit (provision) were primarily attributable to reductions in our recorded valuation allowance against our deferred tax assets as a result of the commencement of amortization of in-process research and development assets associated with the products of the Business upon approval by the FDA.

(d)
Represents the gain arising from the sale offset by costs directly attributable to the Transaction and factually supportable but nonrecurring that would have been recorded if we had completed the Transaction on September 30, 2017. We expect to utilize previously recognized net operating loss carryforwards to reduce this gain for income tax purposes and also reverse a previously established valuation allowance against these net operating loss carryforward deferred tax assets. No adjustment has been made to the cash consideration to give effect to any potential post-closing adjustments under the terms of the Purchase Agreement.