Merrimack said the company will preserve its cash runway in order to provide time for additional milestone payments from Ipsen.
Merrimack Pharmaceuticals will lay off its entire staff, including its leadership team, as the Cambridge, Mass.-based company looks to be in the midst of shutting down.
On Thursday, the company announced the results of a months-long strategic review that include the job cuts, as well as a deal with startup 14ner Oncology, Inc. Merrimack will sell its anti-Her3 monoclonal antibody programs, MM-121 and MM-111, for up to $58 million. The deal includes $3.5 million in upfront cash and to $54.5 million in contingent milestone payments. Also, Merrimack said its strategic review will include a reduction in the size of its board of directors in order to be “better aligned with the nature of the company’s continued operations.” A potential plan to rebuild will be announced at the company’s next annual meeting of shareholders.
Merrimack will also discontinue discovery efforts in its remaining preclinical programs, MM-201 and MM-401. Lastly, the company said it planned to authorize a near-term special cash dividend of between $16.9 million and $18.9 million that hinges on the asset sale to 14ner Oncology.
Merrimack has been in struggling for the past few years. In April, the company announced it planned to discontinue development of an experimental solid tumor treatment, MM-310, that was not showing much potential in a Phase I trial. As a result of that decision, Merrimack said it would initiate layoffs – the second round of layoffs in less than six months. The job cuts came on the heels of a decision to cut 60% of its staff after the company halted its Phase II non-small cell lung cancer trial. The SHERLOC trial was assessing its asset MM-121 in combination with chemotherapy drug docetaxel in patients with heregulin positive NSCLC. When Merrimack announced the cuts, the company said at the time that it planned to focus its development efforts on MM-310 in solid tumors, as well as the advancement of its two most promising preclinical candidates, MM-401 and MM-201, which became the center of the company’s preclinical focus. Also last year, the company saw a pancreatic cancer asset, MM-141, fail to hit its primary or secondary efficacy endpoints.
In 2017, Merrimack sold some oncology assets, including pancreatic cancer drug Onivyde, to France-based Ipsen in a deal that was worth up to $1.025 billion. Following the close of the deal with Ipsen, Merrimack reduced its headcount by about 80%.
In its latest announcement, Merrimack said 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. Gary Crocker, the chairman of Merrimack’s board of directors, said the conclusion to restructure the company was made to ensure its “cash runway could extend into 2027,” which is when the company estimates the longest-term potential Ipsen milestone may be achieved.
