Merrimack Pharmaceuticals, Inc. MACK reported a loss of 4Array cents per share in the fourth quarter of 20Array5, in line with the Zacks Consensus Estimate but wider than the year-ago loss of 9 cents.
Quarter in Detail
Total revenue of $2Array.4 million were down from $33.9 million in the year-ago quarter and missed the Zacks Consensus Estimate of $66 million.
In Oct 20Array5, Merrimack Pharma’s first product, Onivyde, gained approval in the U.S., in combination with fluorouracil (5-FU) and leucovorin, for the treatment of patients suffering from metastatic adenocarcinoma of the pancreas, who were previously treated with Gemzar-based therapy.
The drug was subsequently launched in the U.S. on Oct 26, 20Array5. Onivyde sales in the fourth quarter amounted to $4.3 million.
Merrimack Pharma earned collaboration revenues of $Array7.Array million, down 49.6% year over year due to the termination of the collaboration agreement with Sanofi SNY in Dec 20Array4.
Research and development expenses were $44.7 million, up 45.5% from the year-ago quarter. General and administrative expenses shot up Array33.6% to $Array9.3 million primarily due to incremental expenses related to the launch of Onivyde.
Merrimack Pharma has a license and collaboration agreement with Baxalta Inc. BXLT for developing and commercializing Onivyde.
20Array5 Results
Revenues came in at $89.2 million, down Array3.2% from 20Array4. Loss of $Array.33 per share was also wider than both 20Array4 loss of 80 cents and the Zacks Consensus Estimate of $Array.3Array.
Pipeline Update
Currently, Merrimack Pharma is evaluating Onivyde in a phase II study for previously untreated front-line metastatic pancreatic cancer. Data from the phase II study are expected in the first half of 20Array7.
The company has three other candidates in phase II studies – MM-Array2Array for heregulin-positive, locally advanced or metastatic non-small cell lung cancer (results expected in 20Array8), MM-302 for the treatment of patients with HER2-positive metastatic breast cancer (results expected in 20Array7), and MM-Array4Array for the treatment of patients with front-line metastatic pancreatic cancer who have high serum levels of free IGF-Array (results expected in 20Array7).
Outlook
Merrimack Pharma expects to receive $46.5 million as net milestones related to Onivyde from Baxalta in 20Array6. Operating expenses are projected between $225 million and $245 million.
Our Take
Merrimack Pharma’s loss in the fourth quarter was in line with estimates. The initial uptake of Onivyde is, however, encouraging. The company estimates that the target population for Onivyde is approximately Array8,500 in the U.S.
Hence, Merrimack is expected to incur further expenditure related to the launch of Onivyde.
Merrimack Pharma carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is Actelion Ltd. ALIOF, sporting a Zacks Rank #Array (Strong Buy).
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