Merrimack Provides Business Update and Reports 2017 Financial Results

CAMBRIDGE, Mass., March 12, 2018 /PRNewswire/ -- Merrimack Pharmaceuticals Inc. (Nasdaq: MACK), a clinical-stage oncology company focused on biomarker-defined cancers, today announced its fourth quarter and full year 2017 financial results for the period ended December 31, 2017.

"2017 was a transformative year for Merrimack, in which we reset the company's foundation to focus on our ten wholly owned clinical and preclinical programs, all targeting biomarker-defined cancers. We are very pleased with the advancements we have made across our pipeline, including today's announcement to expand enrollment in the SHERLOC study, a randomized Phase 2 trial evaluating MM-121 in non-small cell lung cancer, and our recent dosing of the first patient in the SHERBOC study, a randomized Phase 2 trial evaluating MM-121 in post-menopausal metastatic breast cancer," said Richard Peters, M.D., Ph.D., President and Chief Executive Officer. "We are well-positioned to carry this momentum forward, with three clinical readouts expected in 2018, including randomized Phase 2 data from MM-141 and MM-121 and Phase 1 data from MM-310."

Fourth Quarter and Recent Highlights

Key events from the fourth quarter and more recently include:

• As announced separately today, expansion of the enrollment target from 80 to 100 patients in the SHERLOC study, a randomized Phase 2 clinical trial evaluating MM-121 added to standard of care in patients with heregulin-positive non-small cell lung cancer. This augmentation of patient enrollment is driven by the faster than projected enrollment rate seen to date and will result in a strengthened statistical design of the study. Merrimack still expects to report top-line data from this trial in the second half of 2018;
• First patient dosed in the SHERBOC study, a randomized, double-blind, placebo-controlled Phase 2 clinical trial evaluating MM-121 added to standard of care in patients with heregulin-positive, hormone-receptor-positive and HER2-negative post-menopausal metastatic breast cancer;
• Appointment of George Demetri, M.D., to Merrimack's Board of Directors. Dr. Demetri is currently a Senior Vice President for Experimental Therapeutics and Director of the Center for Sarcoma and Bone Oncology at Dana-Farber Cancer Institute, as well as a Professor of Medicine at Harvard Medical School, where he is also Co-Director of the Ludwig Center. He is a world-renowned expert in the clinical translation of innovative treatment strategies for cancer, and replaces John Mendelsohn, M.D., who had served on Merrimack's Board since 2012;
• Formation of a new Scientific Advisory Board (SAB) with extensive expertise in precision oncology, bioengineering, drug discovery and clinical development. Members include: Peter Blume-Jensen, M.D., Ph.D.; George Demetri, M.D.; Douglas Lauffenburger, Ph.D.; Peter Sorger, Ph.D.; and Josep Tabernero, M.D., Ph.D. The SAB will work closely with Merrimack's senior management team to advance the company's pipeline of targeted cancer therapies; and
• Financially, closure of 2017 with $93.4 million in cash and cash equivalents and extinguishment of $60.8 million of convertible debt in the fourth quarter of 2017, resulting in a debt-free balance sheet.

Upcoming Milestones:

Merrimack anticipates the following upcoming clinical milestones:

• Top-line results in the first half of 2018 from the CARRIE study, a randomized Phase 2 clinical trial evaluating MM-141, a bispecific antibody targeting the IGF-1 and HER3 receptors, 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 randomized Phase 2 clinical trial evaluating MM-121, a fully human monoclonal antibody targeting the HER3 receptor, added to standard of care in patients with heregulin positive non-small cell lung cancer; and
• Safety data and maximum tolerated dose in the second half of 2018 from the Phase 1 clinical study of MM-310, an antibody-directed nanotherapeutic (ADN) targeting the EphA2 receptor, in patients with solid tumors.

Fourth Quarter and Full Year 2017 Financial Results

The following summarizes Merrimack's financial results for the three months and year ended December 31, 2017:

• Research and development expenses from continuing operations for the three months ended December 31, 2017 were $12.4 million, compared to $25.6 million for the three months ended December 31, 2016. Research and development expenses from continuing operations for the year ended December 31, 2017 were $67.3 million, compared to $109.6 million for the year ended December 31, 2016. Research and development spending for the three months and year ended December 31, 2017 was less than expenditures over comparable periods in 2016, primarily due to Merrimack's refocused clinical and preclinical pipeline;
• General and administrative expenses for the three months ended December 31, 2017 from continuing operations were $4.7 million, compared to $11.0 million for the three months ended December 31, 2016. General and administrative expenses for the year ended December 31, 2017 from continuing operations were $28.5 million, compared to $32.1 million for the year ended December 31, 2016. General and administrative spending for the three months and year ended December 31, 2017 was less than expenditures over comparable periods in 2016, primarily due to a decrease in corporate expenses related to reduced headcount levels and stock-based compensation following the asset sale to Ipsen S.A.;
• Net loss attributable to Merrimack's continuing operations for the three months ended December 31, 2017 was $11.8 million, or $0.89 per share, compared to a net loss attributable to Merrimack's continuing operations of $40.1 million, or $2.93 per share, for the three months ended December 31, 2016. Net loss attributable to Merrimack's continuing operations for the year ended December 31, 2017 was $74.8 million, or $5.66 per share, compared to a net loss attributable to Merrimack's continuing operations of $154.5 million, or $12.33 per share, for the year ended December 31, 2016; and
• As of December 31, 2017, Merrimack had 13.3 million shares of common stock, $0.01 par value per share, outstanding.

Financial Outlook

Merrimack continues to believe that its cash and cash equivalents of $93.4 million as of December 31, 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, Monday, March 12, 2018 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 8074029. 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.