Analyst Conference Summary

conference date: August 11, 2014 @ 5:00 AM Pacific Time
for quarter ending: June 30, 2014 (Q2, second quarter 2013)

Forward-looking statements

Overview: Increase in collaboration revenue resulted mainly from a change in estimate of revenue recognition.

Basic data (GAAP):

Revenue was $27.8 million, up 49% from $18.6 million in the year-earlier quarter.

Net income was negative $18.3 million, improved from negative $30.3 million year-earlier.

EPS was negative $0.17, improved from negative $0.31 year-earlier.

Guidance:

Believes has cash and income sufficient to fund operations into 2015.

Conference Highlights:

Merrimack Pharmaceuticals presented MM-398 Phase 3 results for pancreatic cancer at the ESMO World Congress on Gastrointestinal Cancer in Barcelona, Spain.

A Phase 2 study, HERMIONE, of MM-302 for breast cancer was initiated, announced today.

Merrimack agreed to retake worldwide rights to develop and commercialize MM-121 for HER3, which is in trials for breast, ovarian, and lung cancers. Phase 2 MM-121 data was presented at the meeting of the American Society of Clinical Oncology.

Upcoming milestones include submitting and NDA for MM-398 to the FDA before the end of 2014; initiating an MM-141 clinical trial in 2015; and reporting data from the Phase 2 MM-111 clinical trial in gastric and esophageal cancers in 2014.

Cash and equivalents ended at $92.7 million. Cash flow from operations was negative $32.8 million. But Investing activities provided $40.6 million cash, and financing activities provided $3.1 million, resulting in a $10.9 million increase in cash & equivalents in the quarter.

The decrease in net loss y/y was attributed mainly to a $22.5 million increase in revenue from a change in the revenue recognition period for payments from Sanofi for licensing and collaboration of MM-121. All revenue in the quarter was classified as collaboration revenue.

R&D expense increased $3.3 million y/y. SG&A expense increased in anticipation of the commercialization of MM-398.

Operating expenses were $41.7 million, consisting of: $33.8 million for R&D; $7.9 million for general and administrative expenses. Operating profit was negative $13.9 million. Other expenses were $4.4 million. Net loss was $18.3 million, of which $18.1 million was attributable to shareholders.

Q&A:

Not available: recording was removed from web site before I decided to cover this stock. Not a good practice. Most companies leave the web casts archived permanently.

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