Markets

Merrimack (MACK) Reports Narrower-than-Expected Q3 Loss

Merrimack Pharmaceuticals, Inc.MACK reported a loss of 38 cents per share in the third quarter of 2015, narrower than the Zacks Consensus Estimate of a loss of 41 cents, but wider than the year-ago loss of 27 cents.

Merrimack Pharmaceuticals Inc. (MACK) - Earnings Surprise | FindTheCompany

Merrimack Pharma earned collaboration revenues of $16.4 million, down 41.3% year over year due to the termination of the collaboration agreement with Sanofi SNY in Dec 2014. Revenues, however, surpassed the Zacks Consensus Estimate of $13 million.

Research and development expenses were $37.8 million, down 13.5% from the year-ago figure which had included non-recurring Onivyde collaboration milestones of $12 million.

General and administrative expenses shot up 109.5% from the year-ago quarter to $17 million primarily driven by higher infrastructural and personnel expenses related to the launch of Onivyde.

We note that last month, Merrimack Pharma's Onivyde gained approval in the U.S. for the treatment of patients with metastatic adenocarcinoma of the pancreas after disease progression following gemcitabine-based therapy. The product was subsequently launched on Oct 26.

Merrimack Pharma has a license and collaboration with Baxalta Incorporated BXLT for developing and commercializing Onivyde. A marketing application for Onivyde is currently under review in EU.

Pipeline Update

Meanwhile, Merrimack Pharma has been progressing on the development of its candidates. Currently, the company is evaluating Onivyde in a phase III study for the treatment of patients with front-line HER2-negative gastric cancer and in a phase II study for previously untreated front-line metastatic pancreatic cancer. Data from the phase III study is expected in 2016, while data from the phase II study is expected in the first half of 2017.

The company has three other candidates in phase II studies - MM-121 for locally advanced or metastatic non-small cell lung cancer (results expected in second half of 2016), MM-302 for the treatment of patients with HER2-positive metastatic breast cancer (results expected in 2017), MM-141 for the treatment of patients with front-line metastatic pancreatic cancer who have high serum levels of free IGF-1 (results expected in 2017).

Outlook

Merrimack Pharma expects to receive $46.5 million as net milestones related to Onivyde from Baxalta in 2016.

The company also expects to receive milestones worth $47.5 million in the fourth quarter of 2015 from Baxalta for initiating patient enrolment in a phase II study on Onivyde for the previously untreated front-line metastatic pancreatic cancer.

Our Take

We are pleased with Merrimack Pharma's narrower-than-expected loss and better-than-expected revenues in the third quarter of 2015. The recent FDA approval of Onivyde is also encouraging.

Merrimack Pharma carries a Zacks Rank #4 (Sell). Anika Therapeutics Inc. ANIK is a better-ranked stock in the health care sector sporting a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

MERRIMACK PHAR (MACK): Free Stock Analysis Report

SANOFI-AVENTIS (SNY): Free Stock Analysis Report

ANIKA THERAPEUT (ANIK): Free Stock Analysis Report

BAXALTA INC (BXLT): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

MACKANIKSNY

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More