Merrimack (MACK) Q3 Loss Narrower Than Expected, Stock Up
Zacks Investment Research | Nov 08, 2017 09:45PM ET
Merrimack Pharmaceuticals, Inc. (NASDAQ:MACK) reported a loss of 40 cents per share in the third quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of $1.88. The company had reported a loss of $2.06 in the year-ago quarter.
Merrimack sold Onivyde and a generic version of Doxil to Ipsen in the second quarter for $1.025 billion. Merrimack did not record any revenues in the quarter as there was no marketed product. The Zacks Consensus Estimate for revenues was $18 million.
Merrimack’s shares rose 1.15% following the release of its third-quarter results on Thursday.
Shares of Merrimack have underperformed the industry so far this year. The stock tumbled 71.9% while the industry gained 3.3% in the period.
In the quarter, research and development expenses were down 51.8% year over year to $13.6 million due to a shift in the company’s focus from Onivyde to its pipeline.
General and administrative expenses were down 47.8% year over year to $3.4 million during the quarter due to costs related to transition after asset sale including personnel expenses.
The company settled a litigation with participating convertible noteholders related to extinguishment of debt after asset sale. Merrimack will pay 90 cents per $1.00 of 4.50% convertible senior notes due in 2020. The company has also tendered an offer at the same rate for the remaining convertible notes.
Pipeline Updates
With the sale of its only marketed product, the company can now focus its resources on the development of its three pipeline candidates – MM-121/seribantumab (heregulin-positive, locally advanced or metastatic non-small cell lung cancer ("NSCLC"), MM-141/istiratumab (pancreatic cancer) and MM-310 (solid tumor).
The company is conducting a phase II study, SHERLOC on MM-121 in non-small cell lung cancer. The FDA granted the candidate orphan drug designation for this indication during the quarter. Top-line data from the study is expected in the second half of 2018. Merrimack plans to initiate another phase II study, SHERBOC, for evaluating MM-121 in HER2 negative metastatic breast cancer by 2017 end.
Data from the phase II CARRIE study, evaluating MM-141 in pancreatic cancer, is expected in the first half of 2018. MM-310 is being evaluated in a phase I study in solid tumors. Recommended dose of MM-310 for the phase II study is expected to be announced in the second half of 2018.
Outlook
Merrimack expects its current financial resources along with anticipated milestone payments from Shire to be sufficient to fund its operations at the estimated spending rates through the second half of 2019.
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