Restructuring, Setbacks

Flailing Merrimack brings out the ax for another big cutback, lopping 60% of a shrinking crew as it hunts options

Things at Merrimack Pharmaceuticals $MACK continue to go from bad to worse for the fast-dwindling band of survivors that now runs the show.

Richard Peters

Just a few weeks after conceding that MM-121 (seribantumab) added to docetaxel did nothing for patients with non-small cell lung cancer, the struggling biotech has decided to kill all its development efforts for the drug, erasing a trial for breast cancer. And in order to conserve cash into 2022, the company is once again slashing its workforce in another in a series of restructurings, eliminating 60% of its staff in a draconian cutback while circling the wagons around MM-310.

And they’re pulling out all stops in an effort to find an alternative — workable — strategy in the new future.

Coming a little more than a year after Merrimack axed MM-141 after it failed a Phase II combo study for pancreatic cancer, Merrimack’s turnaround plan appears to be in tatters now.

Bob Mulroy

Merrimack launched a “major restructuring” 2 years ago, seeing CEO Bob Mulroy hit the exit while lopping scores of workers from what had been a 306-member employee roster. In early 2017 Merrimack sold its one marketed drug — Onivyde, which had a disappointing debut — to Ipsen. At the beginning of this year, it was down to about 80 staffers after cutting 30% of its workers.

Another 60% cut with one drug in the clinic has returned the company to startup status after burning through $482 million by the beginning of 2018 with no profits to report.

Here’s what CEO Richard Peters had to say in the quarterly call with analysts:

In total, this restructuring, together with other restructuring and cost cutting measures that we could implement in the future, provide us with the potential to extend our cash runway into at least the second half of 2022. In parallel, we have retained external advisors to explore strategic alternatives. These advisors will work with me, along with our executive leadership team, as together we will be keenly focused on exploring strategic alternatives for the company in the near term.

A little more than three years ago, the stock was trading at $123. Today, after a 10% boost on Wednesday, the stock opened at $4.75.

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