Earlier this week, Merrimack announced the exit of CEO Robert Mulroy. The company also cut 22 percent of its workforce to save more than $200 million in expected costs over the next two years.
Following are the four reasons behind JPMorgan's downgrade:
- "Our view that 2016 consensus estimates, while achievable, are perhaps not meaningfully beatable (and 2017 needs to moderate incrementally, in our view)."
- "Key pipeline catalysts, while underappreciated, are weighted 2Q17+."
- "Our expectation that R&D prioritization and search for a new CEO could take time (currently no timelines outlined)."
- "A continued financing overhang (~12 months of cash)."
Analyst Anupam Rama believes the current 2016 Onivyde estimate of about $60 million (JPMorgan estimate: $57.2 million) is achievable but perhaps not meaningfully beatable.
Looking ahead to 2017, the analyst believes consensus estimates will likely need to come down incrementally (consensus: $108 million; JPMorgan estimate: about $96 million).
Rama cut his FY16–18 GAAP EPS estimates to ($1.19), ($0.41), and $0.08, respectively, from ($1.18), ($0.74), and ($0.26).
At last check, Merrimack was down 7.32 percent at $5.54.
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