Analyst Conference Summary


Merrimack Pharmaceuticals

conference date: August 9, 2017 @ 5:30 AM Pacific Time
for quarter ending: June 30, 2017 (Q2, second quarter 2017)

Forward-looking statements

Overview: Developing a 3-candidate clinical pipeline. Data from a Phase 2 study for pancreatic cancer should be available in the first half of 2017. Sold its commercial drug rights, so no significant revenue until another is approved.

Basic data (GAAP):

Revenue was $0.0 million, down sequentially from $0.0 million. But income from discontinued operations

Net income from continuing operations was negative $29.6 million, up sequentially from negative $29.7 million, and up from negative $51.6 million year-earlier. Net income including discontinued operations was $511.6 million; see below for details.

EPS was negative $0.22, up sequentially from negative $0.23 and up from negative $0.41 year-earlier.


Cash is expected to fund operations until the second half of 2019. Expects a milestone payment from Shire.

Conference Highlights:

Richard Peters, the new CEO, said "This quarter's progress, with key hires to the executive team and advancements in the clinic, has reinforced Merrimack's refined corporate and clinical strategy. With a rich, biomarker-driven R&D pipeline, including data expected in 2018 for each of our lead assets - MM-121, MM-141 and MM-310 - and promising preclinical programs, we are well positioned to execute on our goals."

The immediate cash price of $575 million was received in April, following the Q1 sale of Onivyde and the generic version of doxorubicin hydrochloride liposome injection to Ipsen S.A. for up to $1.025 billion, plus a possible $33 million milestone payment. The $1.025 billion figure would only be if Onivyde achieves specified label expansions.

A special dividend of $140 million, or $1.0552 per share, was paid to shareholders on May 26, 2017. Merrimack also paid off its $175 million in notes due in 2022. Leaving $125 million to further develop the pipeline.

Dr. Sergio Santillana was appointed Chief Medical Officer. Thomas Needham is the new Chief Business officer.

A Phase 2 clinical trial of Onivyde for front-line metastatic pancreatic cancer continued enrollment. This could address 46,000 patients annually in the U.S. It could also generate milestone payments from Ipsen if results are positive.

Actavis LLC i developing generic doxorubicin hydrochloride liposome injection (Doxil®). Merrimack sa a development, license and supply agreement with Actavis pursuant to which Merrimack is responsible for the development and commercial supply of bulk drug product. If the product is approved, Merrimack is eligible to receive a percentage share of net profits in the mid-twenties

MM-121 (seribantumab) Phase 2 trial in non-small cell lung cancer who are heregulin positive continued, with data due in 2H 2018. Retooled the trial into a proof of concept study with a top-line readout in 2018. Merrimack plans to initiate this year a Phase 2 trial of MM-121 plus standard of care (sylvestran) for heregulin positive, hormone receptor positive, HER2 negative breast cancer.

An MM-141 Phase 2 clinical trial completed enrollment in June for frontline pancreatic cancer who have high serum IGF-1 levels, in combination with existing therapies. Blocks two upstream redundant pathways. Expects topline results in first half of 2018 with progression free survival as the primary endpoint. About 50% of pancreatic cancers display high IGF-1.

MM-310 is an antibody directed nanoliposome targetting the EphA2 receptor, which is present in many major tumor types. Delivers docetaxel as a prodrug. Initiated the Phase 1 trial in a variety of solid tumors with a dosing schedule result expected in 2018. Believes will reduce toxicity.

Merrimack has other compounds in preclinical development.

Merrimack plans to seek partners for the development of its therapies once proof-of-concept has been established.

See also the Merrimack Pipeline.

Cash and equivalents ended at $135.5 million, up sequentially from $17.2 million. Lists $109 million in total liabilities. The cash from the Ipsen deal was received on April 3. That was used to redeem $175 million of senior notes due in 2022.

Costs and expenses were $34.5 million, consisting of: $0.0 million cost of goods sold, $19.8 million for R&D; and $14.8 million for selling, general and administrative expense. Operating profit was negative $34.5 million. Other expenses (mainly interest) were $28.5 million. Loss attributed to non-controlling interest was $0.7 million.


CFO hiring? Going well.

MM121 breast cancer study timeline? Activate the study this year, then we can give a likely timeline.

Rate limiting steps for Sherbock (MM-121 breast) trial? We have received great interest from investigators. No obvious rate limiting step. Patients have progressed on kinase inhibitors. Patients have no other good options.

Shire payment timing? We are still entitled to receive commercial performance and a milestone for starting a pivotal study. We expect to receive them before 2019.

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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 2017 William P. Meyers