Analyst Conference Summary


Merrimack Pharmaceuticals

conference date: August 4, 2016 @ 1:30 PM Pacific Time
for quarter ending: June 30, 2016 (Q2, second quarter 2016)

Forward-looking statements

Overview: Onivyde revenue ramping off small base, R&D expense ramping faster.

Basic data (GAAP):

Revenue was $33.7 million, up 58% sequentially from $21.3 million, but down 8% from $36.6 million in the year-earlier quarter.

Net income was negative $50.8 million, down sequentially from negative $38.5 million, and down from negative $22.9 million year-earlier.

EPS was negative $0.40, down sequentially from negative $0.33 and down from negative $0.21 year-earlier.


Lowered GAAP operating expense guidance for 2016 by $20 million to $243.5 to $263.5 million. Excluding the anticipated $38.5 million PharmaEngine expense, this corresponds to a non-GAAP operating expense of $205 to $225 million.

Clarifying prior guidance, expects $85 million in milestone payments from Shire and $38.5 million offsetting milestone payment to PharmaEngine.

Conference Highlights:

The FDA approved ONIVYDE™ (irinotecan liposome injection) (formerly MM-398) for post-gemcitibine metastatic pancreatic cancer on October 22, 2015. In Q2 received a positive opinion from the CHMP, which typically leads to commercial approval in Europe. Presented new analyses of the Phase 3 NAPOLI-1 data showing patients treated with the ONIVYDE regimen maintained similar baseline quality of life at 12 weeks despite the addition of a second chemotherapeutic agent when compared to 5-FU and leucovorin alone at the European Society for Medical Oncology (ESMO) 18th World Congress on Gastrointestinal Cancer.

Onivyde product revenue was $12.9 million, up 29% sequentially from $10.0 million. License and collaboration revenue was $19.3 million, up sequentially from $11.3 million. About 800 unique facilities have used Onivyde and adding about 20 per week. Much use is of later line therapy, trying to move up to standard for second line therapy. Time on therapy has been increasing.

A Phase 2 clinical trial of Onivyde for front-line metastatic pancreatic cancer enrolled its first patient. A total of 5 cancer types will be targeted by Baxalta (now part of Shire) and Merrimack with Onivyde in the next round of trials. Results should be announced in 2018.

HERMIONE Phase 2 trial for MM-302 for third line HER-2 positive breast cancer continued, in combination with herceptin. This is an antibody directed nanotherapy. Enrollment should complete in 2016 with data in 2017.

MM-121 (seribantumab) Phase 2 trial in non-small cell lung cancer who are heregulin positive also continues to enroll. Amended the primary endpoint to overall survival. Data should report in the second half of 2016. Expanded overall survival analysis from the seribantumab Phase 2 breast cancer study indicated that seribantumab decreased risk of death by more than 50% in HER2-negative, hormone receptor positive breast cancer patients. Seeing strong interest from potential partners in collaborating in MM-121 for breast cancer. FDA agreed that the single study could be sufficient to approve the drug. A partnership with Leica Biosystems to was formed to develop Merrimack's novel heregulin assay for seribantumab (MM-121). Received Fast Track designation.

An MM-141 Phase 2 clinical trial started in 2015 for frontline pancreatic cancer who have high serum IGF-1 levels, in combination with existing therapies, continues. The safety portion has been completed. MM-141 is believed to sensitize tumors to the nab-paclitaxel and gemcitabine combination. Only 146 biomarker positive patients will be enrolled. Results could be available in 2018.

Merrimack initiated a biomarker-selected, multi-arm Phase 1 clinical study in metastatic colorectal, non-small cell lung, and head and neck cancers to evaluate the safety and tolerability of MM-151 in combination with seribantumab in patients with heregulin positive tumors, MM-151 in combination with MM-141 in patients with IGF-1-positive tumors, and MM-151 in combination with a MEK inhibitor (trametinib) in patients with KRAS/NRAS-mutant tumors. At ASCO the final analysis from the Phase 1 clinical study of MM-151 showed clinical activity in multiple solid tumor types, including colorectal cancer.

See also the Merrimack Pipeline.

Upcoming Milestones:

Results in 2017 from the Phase 2 clinical study of ONIVYDE in previously untreated front-line metastatic pancreatic cancer;

Results in 2017 from HERMIONE, the Phase 2 clinical study of MM-302 in patients with HER2-positive metastatic breast cancer that is designed to support a potential Accelerated Approval application to the FDA;

Results in 2018 from the Phase 2 clinical study of MM-121 in patients with heregulin-positive, locally advanced or metastatic non-small cell lung cancer that is designed to support a potential Biologics License Application to the FDA; and

Results in 2018 from the Phase 2 clinical study of MM-141 in patients with front-line metastatic pancreatic cancer who have high serum levels of free IGF-1.

Cash and equivalents ended at $82.7 million, down sequentially from $132.4 million. Lists $352 million in total liabilities. Cash used in operating activities was $51 million. During the quarter issued 12.4 million shares to close $64 million of convertible notes, which will lower future interest payments by about $13 million.

Revenue consisted of $12.9 million product revenue, $19.3 million license and collaboration revenue, and $1.5 other. This included a $10 million milestone payment from approval of Onivyde in Korea.

Costs and expenses were $63.5 million, consisting of: $1.9 million cost of goods sold, $41.0 million for R&D; and $20.7 million for selling, general and administrative expenses. Operating profit was negative $29.9 million. Other expenses were $21.1 million, all interest, and higher than usual due to a non-cash charge relating to the elimination of interest on the convertible notes. Loss attributed to non-controlling interest was $0.2 million.

The R&D expense in the quarter included $10 million paid to PharmaEngine, which is the same $10 million received from Shire for Korea, netting out to zero.


Initial portion of frontline pancreatic trial criteria? The core question for "napox" is tolerability. We believe a combo with Onivyde could produce better tolerability without losing effectiveness.

New patient starts and duration of therapy in Q2? Duration of therapy has been growing over time. We are seeing increased breadth of use. Physicians are recognizing the benefits of Onivyde.

OpenIcon Analyst Conference Summaries Main Page
Merrimack Pharmaceuticals main Openicon page



More Analyst Conference Pages:



Disclaimer: My analyst call summaries may include both our condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. Before making or terminating an investment you should always verify any factual basis of your decision.

Copyright 2016 William P. Meyers