Merrimack Pharmaceuticals, Inc.MACK reported a loss of 32 cents per share in the first quarter of 2015, wider than the Zacks Consensus Estimate of a loss of 30 cents and the year-ago loss of 27 cents.
Merrimack Pharmaceuticals Inc. - Earnings Surprise | FindTheCompany
Merrimack Pharma earned collaboration revenues of $14.8 million, up 13.9% year over year, but missing the Zacks Consensus Estimate of $15 million. The increase in collaboration revenues was primarily due to revenues earned under the company's collaboration with Baxter International BAX for the development and commercialization of MM-398. However, this increase was partially offset by a decline in revenues due to the termination of Merrimack Pharma's collaboration with Sanofi SNY effective Dec 17, 2014.
In the first quarter of 2015, research and development expenses were $35.7 million, up 17.7% from the year-ago quarter. The increase was primarily due to pipeline development, and pre-clinical and other general expenses. General and administrative expenses increased 47.6% from the year-ago quarter to $9.2 million primarily driven by interest expenses.
Pipeline Update
During the first quarter, Merrimack Pharma initiated a randomized, double-blinded, placebo-controlled phase II study on MM-141 in combination with nab-paclitaxel and Gemzar, versus nab-paclitaxel and Gemzar, for the treatment of front-line metastatic pancreatic cancer patients with high serum levels of free IGF-1.
In Apr 2015, Merrimack Pharma completed the rolling submission of a new drug application for its lead candidate MM-398 to the FDA for the treatment of patients with metastatic adenocarcinoma of the pancreas who received prior treatment with Gemzar. Additionally, in May 2015, Baxter submitted a marketing authorisation application to the European Medicines Agency for the approval of MM-398 in the same indication. The company is also planning to commence studies on MM-398 for front-line metastatic pancreatic cancer and front-line HER2-negative gastric cancer in 2015.
Meanwhile, patient enrollment is ongoing in two studies - the phase II HERMIONE study on MM-302 designed to support a potential accelerated approval application to the FDA for the treatment of HER2-positive metastatic breast cancer and a phase II study on MM-121 for heregulin-positive, locally-advanced or metastatic non-small cell lung cancer.
2015 Outlook
Merrimack Pharma expects that its existing unrestricted cash and cash equivalents, available-for-sale securities (as of Mar 31, 2015) and anticipated cost sharing reimbursements and milestone payments (anticipated receipt of $66.5 million) from Baxter will be sufficient for funding its operations into 2016. Additional payments from additional business development should extend the company's cash runway.
Our Take
Merrimack Pharma's first-quarter 2015 earnings were disappointing with the company missing on both the top and bottom lines. Currently, Merrimack Pharma is highly dependent on its only regulatory-phase candidate, MM-398. We expect investor focus to remain on updates from the company regarding the candidate's regulatory status.
Merrimack Pharma carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is Horizon Pharma plc HZNP , carrying a Zacks Rank #1 (Strong Buy).
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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.
