Market Overview

Merrimack Pharma Is Taking Steps In The Right Direction

Share:
Merrimack Pharma Is Taking Steps In The Right Direction

Baird believes Merrimack Pharmaceuticals Inc (NASDAQ: MACK) is taking steps in the right direction by announcing the sale of its metastatic pancreatic cancer drug Onivyde to French drug maker Ipsen and refocusing on its pipeline assets.

The sale comes after Merrimack announcement in December to stop a Phase 2 study of its treatment to fight breast cancer.

The Asset Sale

Under the agreement, which is expected to close in the first quarter of 2017, Merrimack will receive $575 million upfront and up to $450 million in regulatory milestones from Ipsen.

“Overall, while the sale of Onivyde, the company’s only marketed drug, is surprising, we view the deal as positive considering the disappointing launch and the potential to participate in upside should additional indications be approved,” analyst Michael Ulz wrote in a note.

Further, the sale proceeds are expected to support operations into second half of 2019, and strengthen the capital structure.

Merrimack would then focus on three cancer assets (MM-121, MM-141 and MM-310), which are in the various stages of clinical study.

Transition Year: Rating And Justification

Ulz reiterated his Neutral rating on the shares, but cut the price target by $2 to $5, as he views 2017 as more of a transition year and meaningful data not expected until 2018.

At last check, shares of Merrimack fell 6.54 percent to $3.43.

 

Related Articles (MACK)

View Comments and Join the Discussion!

Posted-In: Analyst Color Biotech News Health Care Price Target Reiteration Asset Sales Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
HYMCBMO CapitalInitiates Coverage On
DEMorgan StanleyMaintains335.0
SBNYRaymond JamesMaintains138.0
CORTHC Wainwright & Co.Maintains32.0
CYBBFCitigroupDowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com