Merrimack CEO and CFO Resign
A month after beleaguered Merrimack Pharmaceuticals announced it was terminating its staff and leadership team, the company’s chief executive officer and chief financial officer have resigned their positions. But, they are both remaining with the company as high-paid consultants.
In a Monday filing with the U.S. Securities and Exchange Commission, Merrimack said company president and CEO Richard Peters and CFO Jean Franchi signed separation agreements with the company. Both agreements were dated June 28, according to the filing. Peters will receive a lump severance of $743,746.21, which is his annual base salary. Peters will also receive a pro-rated bonus of $294,891.15.
While Peters has resigned from his executive role at Merrimack, the company said he did sign a consulting agreement to assist Merrimack with its on-going reporting obligations and the administration of the Company’s remaining assets. Peters will be compensated at a rate of $30,989.43 per month for his services under the agreement, which will be paid quarterly. The term of the “Peters Consulting Agreement” continues until June 29, 2021.
Franchi will receive a lump sum severance of $415,002.7, which is equal to her base salary. Additionally, Franchi will receive a pro-rated bonus of $77,544.30. Like Peters, Franchi also signed a consulting agreement to help steer the company in its remaining days. Franchi will be compensated at a rate of $17,291.78 per month and her agreement terms expire the same time as Peters.
In other leadership news at Merrimack, Chairman of the Board Gary Crocker, who formerly served as president and CEO of the company, was named president and treasurer of the company. The 67-year-old Crocker has had extensive leadership experience, having held numerous C-suite roles and board positions throughout his career. Crocker will not receive any additional compensation for these roles with Merrimack, the company noted in the filing.
At the end of May Merrimack announced the termination of its entire staff and its decision to sell off its assets following a strategic review. The decision came after years of struggle as it saw multiple trial failures, including its Phase II non-small cell lung cancer trial, as well as its experimental solid tumor treatment, MM-310, which was not showing much progress in early studies. The company planned to discontinue development of that asset last month. Last year, the company saw a pancreatic cancer asset, MM-141, fail to hit its primary or secondary efficacy endpoints.
As a result of continued failures, the company is selling off its assets. Merrimack struck deals for its anti-Her3 monoclonal antibody programs, MM-121 and MM-111, with startup 14ner Oncology, Inc.
While Merrimack is conducting a fire sale of its assets and culling employees, the company will remain in a pseudo-state of operation in order to benefit from potential milestone payments from a 2017 sale of some oncology assets, including pancreatic cancer drug Onivyde, to France-based Ipsen in a deal that was worth up to $1.025 billion. Merrimack could potentially remain in its limbo-like state through 2027, which is when the company estimates the longest-term potential Ipsen milestone may be achieved.
Shares of Merrimack closed at $6.03 on Monday.