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Merrimack's (MACK) Q4 Loss In-Line With Estimates

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Cambridge, MA-based Merrimack Pharmaceuticals, Inc. (MACK - Free Report) is a biopharmaceutical company focused on the discovery, development and commercialization of innovative therapies in combination with companion diagnostics for the treatment of cancer.

Merrimack currently has one marketed product, Onivyde, in its portfolio. Onivyde is approved in the U.S. and the EU, for use in combination with fluorouracil (5-FU) and leucovorin (LV), for the treatment of patients with metastatic adenocarcinoma of the pancreas after disease progression following Gemzar (gemcitabine)-based therapy. However, in Jan 2017, the company entered into a definitive asset purchase and sale agreement to sell Onivyde to Ipsen for $1 billion.

Merrimack will now focus its resources on the development of its three pipeline candidates – MM-121/seribantumab (heregulin-positive, locally advanced or metastatic non-small cell lung cancer (NSCLC), MM-141/istiratumab (pancreatic cancer) and MM-310 (solid tumor).

Merrimack’s track record has been decent so far with a four-quarter average positive earnings surprise of 5.27%. The company has beaten estimates twice in the last four trailing quarters while meeting in one and missing in the other quarter.

Currently, Merrimack has a Zacks Rank #3 (Hold), but that could definitely change following the company’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: Merrimack reported a fourth-quarter loss in-line with the estimates. The company reported a loss of 22 cents, in line with our consensus estimate of 22 cents.

Revenues: Revenues came in above expectations. Merrimack posted revenues of $61.2 million compared to our consensus estimate of $47.7 million.

Key Stats: Product revenues from Onivyde were $15.8 million for the reported quarter, an increase of $1.3 million over the prior quarter;.

2017 Guidance: Merrimack expects to receive a $575.0 million upfront cash payment from Ipsen upon the closing of the asset sale. The company intends to use these proceeds to pay a special cash dividend of at least $200.0 million to stockholders and use an additional $195.1 million to redeem its senior secured notes.

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