The company developing the drug, Massachusetts-based Targanta Therapeutics Inc., has agreed to be acquired by New Jersey-based The Medicines Co. for $42 million.
The Medicines Co. said it will try again to win approval from the U.S. Food and Drug Administration for Targanta's drug oritavancin, to treat complicated skin infections in hospitals.
In November, the FDA told cash strapped Targanta to perform another pricey clinical trial to demonstrate the drug's safety and efficacy. Targanta shares plummeted to 49 cents each from $7.75.
The Medicines Co. is offering $2 per share, but would boost that price to as much as $6.55 a share if the drug wins both U.S. and European approval and records $400 million of global sales in one year.
Targanta employs dozens of scientists in Indianapolis to work on oritavancin.
Indianapolis-based Lilly discovered and developed oritavancin, but then sold its rights to the drug.