Merrimack Pharmaceuticals, Inc. incurred a loss of 97 cents per share for the fourth quarter of 2018, narrower than the Zacks Consensus Estimate of a loss of $1.01 per share but wider than the year-ago quarter’s loss of 89 cents.
Merrimack sold its only marketed product, Onivyde, to Ipsen in 2017. As a result, the company could not generate any revenues in the reported quarter in want of a marketed product in its portfolio.
Shares of Merrimack were almost 6.5% up following its release of fourth-quarter 2018 results on Wednesday. In fact, the stock has soared 66.3% so far this year, outperforming the industry’s rally of 14.5%.
In the reported quarter, research and development expenses decreased 17.7% year over year to $10.2 million owing to the phasing of certain clinical studies.
General and administrative expenses declined 14.9% year over year to $4 million on the back of reduced corporate expenses.
Merrimack completed its streamlining of operations by reducing 60% workforce as part of its corporate restructuring plan.
With the sale of Onivyde, Merrimack is back to being a development-stage biopharmaceutical company.
Merrimack suffered a string of pipeline setbacks in 2018 when it decided to stall the development of MM-141 following dismal results from the phase II study. The company also stopped developing another candidate, MM-121, evaluated in two phase II programs, namely SHERLOC and SHERBOC. Merrimack expects these close-out efforts to continue during the first half of 2019.
The company now focuses on developing its only pipeline candidate, MM-310 (solid tumor). Last November, the company amended the phase I program on MM-310 to evaluate the candidate’s safety in patients with solid tumors and increased the dosing interval of MM-310 (360 mg) from every three weeks to four.
The study is progressing well with no instances of grade 3 peripheral neuropathy reported by the patients enrolled. If successful, Merrimack plans to begin enrolling in next dose-escalation cohort with 420 mg of MM-310 every four weeks.
Merrimack intends to advance its two preclinical candidates — an immuno-oncology program, namely MM-401 (an agonistic antibody targeting a novel immuno-oncology target, TNFR2) and MM-201 (a highly stabilized agonist-Fc fusion protein targeting death receptors 4 and 5). The company will make a presentation at the American Association for Cancer Research (AACR) Annual Meeting on the two preclinical candidates.
Merrimack had cash, cash equivalents and marketable securities of $71.3 million as of Dec 31, 2018. The company is eligible to receive an additional $5-million milestone from Servier, triggered by the decision to advance the ongoing multi-part clinical study on Onivyde for the treatment of small cell lung cancer (SCLC).
Additionally, Merrimack is eligible to receive an aggregate of $450 million as milestone payments from Ipsen, subject to stockholders’ approval. Onivyde is currently under review in the United States for treating various oncological and other indications.
Merrimack Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Zacks Rank & Stocks to Consider
Merrimack currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the biotech sector include Celgene Corporation (CELG - Free Report) , Kamada Ltd. (KMDA - Free Report) and Compugen Ltd. (CGEN - Free Report) , all sporting a Zacks Rank #1(Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Celgene’s earnings estimates have been revised 7.8% upward for 2019 over the past 60 days. The stock has surged 35.1% so far this year.
Kamada’s earnings estimates have moved 34.3% north for 2019 over the past 60 days. The stock has rallied 20.4% so far this year.
Compugen’s loss per share estimates have been narrowed 24% for 2019 in the last 60 days. The stock has soared 59.9% so far this year.
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