CAMBRIDGE, Mass., May 30, 2019 /PRNewswire/ -- Merrimack Pharmaceuticals, Inc. (Nasdaq: MACK) today announced the completion of its review of strategic alternatives, following which the Company's Board of Directors is implementing a series of measures designed to extend Merrimack's cash runway into 2027 and preserve its ability to capture the potential remaining
The core driver throughout the Company's strategic review process was to optimize value for shareholders, including through the preservation of potential milestone payments that Merrimack is eligible to receive. To that end, the management team and the Board thoroughly evaluated a broad set of alternatives, including whole company transactions and asset sales. Accordingly, with the assistance of its advisors, over 100 potential companies were contacted. This process eventually narrowed the pool of interested transaction candidates to a handful of potential opportunities. The management team and the Board worked with each of these final counterparties, but ultimately determined not to move forward with any of them for a variety of reasons, including not being able to agree on acceptable terms, offering what the Board deemed to be insufficient value to Merrimack shareholders and/or not providing for the assumption of the responsibility to capture and distribute the potential long-term ONIVYDE milestones to the Company's pre-transaction shareholders.
"As a result of this extensive strategic review process, the Board has concluded that the best outcome available for our shareholders is to restructure the Company such that our cash runway could extend into 2027, when we estimate the longest-term potential Ipsen milestone may be achieved; as well as to authorize a special cash dividend," said Gary Crocker, Chairman of Merrimack's Board of Directors. "These are important changes for the Company, our shareholders and our employees, and we want to express our gratitude to the affected employees for their contributions to Merrimack."
In addition to the preservation of the opportunity to receive the potential Ipsen milestones, the latest outcomes from the Company's review of strategic alternatives include:
Since initiating this strategic review in November 2018, Merrimack has implemented several steps in relation to this process. These include scaling back operational costs, ceasing development of MM-121 and reprioritizing the Company's research and development pipeline in November 2018, and closing out remaining clinical activities following updated data from the Company's Phase 1 study of MM-310 in April 2019, along with associated headcount reductions. The Company has also strengthened its balance sheet through the retirement of its outstanding debt, the sale of laboratory equipment and the sale of its equity position in Silver Creek Pharmaceuticals for $7.8 million announced on May 10, 2019.
As previously disclosed, Merrimack remains eligible to receive additional contingent milestone payments resulting from Merrimack's asset sale to Ipsen in 2017:
In addition, subject to successfully closing the sale of its anti-Her3 programs to 14ner Oncology, Merrimack would be eligible to receive the following development, regulatory and commercial-based milestone payments:
Forward Looking Statements
To the extent that statements contained in this press release are not descriptions of historical facts, they are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements include any statements about Merrimack's strategy, future operations, future financial position, future revenues and future expectations and plans and prospects for Merrimack, and any other statements containing the words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue" and similar expressions. In this press release, Merrimack's forward-looking statements include, among others, statements about cash runway, anticipated achievement, receipt and distribution of milestones, a potential special cash dividend, and reductions in the Company's workforce and the size of its Board of Directors. Such forward-looking statements involve substantial risks and uncertainties that could cause Merrimack's development programs, future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, expectations for achievement of contractual milestones, availability of funding sufficient for Merrimack's foreseeable and unforeseeable operating expenses and capital expenditure requirements, and other matters that could affect the availability or commercial potential of Merrimack's product candidates. Merrimack undertakes no obligation to update or revise any forward-looking statements. Forward-looking statements should not be relied upon as representing Merrimack's views as of any date subsequent to the date hereof. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to Merrimack's business in general, see the "Risk Factors" section of Merrimack's Quarterly Report on Form 10-Q filed with the SEC on May 10, 2019 and the other reports Merrimack files with the SEC.
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SOURCE Merrimack Pharmaceuticals, Inc.
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