Merrimack (MACK): Can The Stock Surprise In Q2 Earnings?
Zacks Investment Research | Aug 01, 2016 06:38AM ET
Merrimack Pharmaceuticals, Inc. (NASDAQ:MACK) is scheduled to report second-quarter 2016 results on Aug 4. Last quarter, Merrimack delivered an earnings surprise of +15.38%. Let’s see how things are shaping up for the company this quarter.
Factors Influencing This Quarter
Merrimack’s only marketed product, Onivyde, gained approval in the U.S. in Oct 2015, in combination with fluorouracil (5-FU) and leucovorin for the treatment of metastatic adenocarcinoma of the pancreas in patients who were previously treated with Eli Lilly and Company’s (NYSE:LLY) Gemzar-based therapy.
The company’s efforts on commercializing Onivyde and driving awareness about the drug bode well. Merrimack has also been engaged in visiting key institutions, educating physicians, and providing active patient and oncology practice support services.
Sales of the drug are expected to increase in major academic centers. Inclusion of the drug in the National Comprehensive Cancer Network (NCCN) clinical practice guidelines in Oncology for pancreatic adenocarcinoma was a major boost to the company.
The guidelines recognized the product as category 1 second-line therapy for metastatic adenocarcinoma of the pancreas in patients who were previously treated with Gemzar-based therapy. This further validated the importance of the drug for patients suffering from metastatic pancreatic cancer. Consequently, the number of sites to have Onyvide on formulary had almost doubled last quarter and should continue to do so in the to-be-reported quarter as well.
Last month, the company received a positive opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) on Onyvide for its use in combination with fluorouracil (5-FU) and leucovorin for the treatment of patients with metastatic pancreatic adenocarcinoma who have progressed after Gemzar-based therapy. We expect the company to offer further details on the regulatory front during its second-quarter earnings call.
Meanwhile, a number of studies for a potential label expansion of Onivyde to include other indications such as front-line pancreatic cancer, pediatric solid tumors and glioma are ongoing. The company is also progressing on with its two other late-stage candidates – MM-302 and MM121/seribantumab. Investors are expected to remain focused on pipeline updates by the company.
License and collaboration revenues are expected to drive substantial top-line growth at the company in the to-be-reported quarter.
Surprise History
Merrimack’s track record has been impressive so far. The company has beaten estimates in three of the last four trailing quarters and reported in-line with estimates in one. The average positive earnings surprise is +11.93%.
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