On November 8, 2017 Merrimack Pharmaceuticals, Inc. (NASDAQ: MACK) reported its third quarter 2017 financial results for the period ended September 30, 2017 (Press release, Merrimack, NOV 8, 2017, View Source [SID1234521746]).

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"The third quarter marked continued execution on our 2017 goals as we delivered on the promise of a refocused Merrimack with a seasoned team built around our efficient, biomarker-driven approach and refined corporate strategy," said Richard Peters, M.D., Ph.D., President and Chief Executive Officer. "With the potential to emerge from the fourth quarter with a clean balance sheet and three upcoming data readouts from our lead clinical candidates, MM-121, MM-141 and MM-310, we look towards 2018 with great anticipation and are poised to deliver on our corporate goals with a strong infrastructure and disciplined approach."

Third Quarter and Recent Highlights

Key events from the third quarter and more recently include:

Received orphan drug designation from the U.S. Food and Drug Administration (FDA) for MM-121 in heregulin positive non-small cell lung cancer, which would potentially provide Merrimack with up to seven years of market exclusivity in this indication, among other benefits, if approved; and
Rounded out executive team with two key additions:
Jean Franchi, a 30-year industry veteran with rich leadership experience in the biotechnology and life sciences sectors, hired as Chief Financial Officer. Most recently, Ms. Franchi served as Chief Financial Officer at Dimension Therapeutics, with time previously spent as Chief Financial Officer at Good Start Genetics and 16 years at Genzyme, including as Senior Vice President of Corporate Finance.
Thomas Needham, an experienced dealmaker with 25 years in corporate strategy and business development, hired as Chief Business Officer. Most recently, Mr. Needham served as Senior Vice President of Business Development at C4 Therapeutics. Previously, he was Managing Director at Synthesis Capital, where he helped manage two healthcare venture funds, a Principal at the global private equity firm Advent International and Vice President of Business Development at both GPC Biotech and Mitotix.
Upcoming Milestones

Merrimack anticipates the following upcoming clinical milestones:

First patient dosed by the end of 2017 in the SHERBOC study, a Phase 2 randomized, double-blind, placebo-controlled clinical trial of MM-121 added to standard of care in patients with heregulin positive, hormone receptor positive, HER2 negative metastatic breast cancer;
Top-line results in the first half of 2018 from the CARRIE study, a Phase 2 randomized clinical trial of MM-141 added to standard of care in patients with front-line metastatic pancreatic cancer who have high serum levels of free IGF-1;
Top-line results in the second half of 2018 from the SHERLOC study, a Phase 2 randomized clinical trial of MM-121 added to standard of care in patients with heregulin positive non-small cell lung cancer; and
Safety data and recommended Phase 2 dose in the second half of 2018 from the Phase 1 clinical study of MM-310 in patients with solid tumors.
Third Quarter 2017 Financial Results

The following summarizes Merrimack’s financial results for the three months ended September 30, 2017:

In October, Merrimack reached a settlement with participating convertible noteholders to resolve litigation associated with the asset sale to Ipsen S.A., agreeing to pay $0.90 per $1.00 of 4.50% convertible senior notes due in 2020 held by the noteholder plaintiffs, plus accrued interest and an amount towards the plaintiffs’ legal fees. In conjunction with the settlement, Merrimack commenced a tender offer, set to expire November 10, 2017, to purchase all remaining convertible notes at the same rate of $0.90 per $1.00 of convertible notes, plus accrued interest, with the potential to eliminate remaining debt if all noteholders participate. Together, the settlement payout, the amount Merrimack expects to pay to acquire the remaining convertible notes and Merrimack’s expenses related to this litigation will approximate the $60.0 million that Merrimack placed into an escrow account as security for the plaintiffs’ claims;
Research and development expenses for the three months ended September 30, 2017 from continuing operations were $13.6 million, compared to $28.2 million for the three months ended September 30, 2016. This represents a decrease of $14.6 million, primarily due to Merrimack’s refocused clinical and preclinical pipeline;
General and administrative expenses for the three months ended September 30, 2017 from continuing operations were $3.4 million, compared to $6.4 million for the three months ended September 30, 2016. This represents a decrease of $3.0 million, primarily due to the transition following the asset sale which led to a decrease in corporate expenses related to headcount and stock-based compensation;
Net loss attributable to Merrimack’s continuing operations for the three months ended September 30, 2017 was $5.4 million, or $0.40 per share, compared to a net loss attributable to Merrimack’s continuing operations of $26.6 million, or $2.06 per share, for the three months ended September 30, 2016;
During the quarter, Merrimack deconsolidated Silver Creek Pharmaceuticals’ financial statements from Merrimack’s consolidated financial statements effective July 14, 2017. As a result of the deconsolidation, Merrimack recognized a non-cash gain of approximately $10.8 million; and
As of September 30, 2017, Merrimack had 13.3 million shares of common stock, $0.01 par value per share, outstanding.
Updated Financial Outlook

Merrimack continues to believe that its unrestricted cash and cash equivalents of $107.2 million as of September 30, 2017 and potential net milestone payments anticipated from Shire will be sufficient to fund its planned operations into the second half of 2019.

Conference Call and Webcast

Merrimack will host a live conference call and webcast today, Wednesday, November 8, 2017 at 8:30 am ET, to provide an update on its operational progress and a summary of these financial results.

Investors and the general public are invited to listen to the call by dialing (877) 564-1301 (domestic) or (224) 357-2394 (international) five minutes prior to the start of the call and providing the passcode 6187659. A listen-only webcast of the call can be accessed in the Investors section of Merrimack’s website, investors.merrimack.com, and a replay of the call will be archived there for six weeks following the call.

Annual Meeting Date

Merrimack will hold its 2018 Annual Meeting of Stockholders on June 12, 2018.