| Nature of the Business | 1. Nature of the Business Merrimack Pharmaceuticals, Inc. (the “Company”) is a biopharmaceutical company based in Cambridge, Massachusetts that is entitled to receive up to $ 225.0 million in contingent milestone payments related to its sale of ONIVYDE® and MM-436 (the “Commercial Business”) to Ipsen S.A. (“Ipsen”) in April 2017 (the “Ipsen Sale”). The Company does not have any ongoing research or development activities. The Company does not have any employees and instead uses external consultants for the operation of the Company. On February 13, 2024, the Company announced that Ipsen S.A. announced it had received approval from the U.S. Food and Drug Administration (“FDA”) to market ONIVYDE as a first-line treatment of metastatic adenocarcinoma on the pancreas. As a result of this approval by the FDA, the Company received a $ 225 million milestone payment from Ipsen under the terms of the Ipsen Sale in March 2024. On May 10, 2024, the Company’s stockholders approved a plan of dissolution (the “Plan of Dissolution”) whereby the Company will cease operations and dissolve in accordance with Delaware law. Stockholders of record on May 10, 2024 will receive a one-time liquidating dividend of $15.10 per share, which dividend is expected to be paid on or around May 17. Thereafter, the Company intends to transfer any remaining rights to any potential future milestone payments, as described below, from Ipsen Pharmaceuticals or Elevation Oncology to a liquidating trust. Currently, the Company has no expectation that any future milestone payments will occur. If any future milestone payments were received, they would be distributed to stockholders of record as of May 10, 2024. Following the stockholders’ meeting, the Company expects to delist from trading on NASDAQ on or around May 15, 2024 and to terminate its registration as a reporting company under the Securities Exchange Act of 1934, as amended. In addition to the $ 225 million milestone that the Company received in March 2024, based upon the approval announced by the FDA on February 13, 2024 of ONIVYDE® for the first-line treatment of metastatic pancreatic ductal adenocarcinoma (“mPDAC”), there are $ 225 million of additional contingent milestone payments which could result from the Ipsen Sale. The Company believes that the probability of receiving these additional milestones is remote based on publicly available information provided by Ipsen. The $225.0 million in contingent milestone payments resulting from the Ipsen Sale consist of: • $ 150.0 million upon approval by the FDA of ONIVYDE ® for the treatment of small-cell lung cancer after failure of first-line chemotherapy; and • $ 75.0 million upon approval by the FDA of ONIVYDE ® for an additional indication unrelated to those described above. On May 30, 2019, the Company announced the completion of its review of strategic alternatives, following which the Company’s board of directors (the “Board”) implemented a series of measures designed to extend the Company’s cash runway and preserve its ability to capture the potential milestone payments resulting from the Ipsen Sale. In connection with that announcement, the Company discontinued the discovery efforts on its remaining preclinical programs: 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’s termination of its executive management team and all other employees was substantially completed by June 28, 2019 and fully completed by July 12, 2019. As of July 12, 2019, the Company no longer had any employees. The Company has engaged external consultants to run the day-to-day operations of the Company. The Company has also entered into consulting agreements with certain former members of its executive management team who are supporting the Company’s relationship with current partners, and assisting with certain legal and regulatory matters and the continued wind-down of operations. On July 12, 2019, the Company completed the sale to Elevation Oncology, Inc. (formerly known as 14ner Oncology, Inc.) (“Elevation”) of its anti-HER3 antibody programs, MM-121 (seribantumab) and MM-111 (the “Elevation Sale”). In connection with the Elevation Sale, the Company received an upfront cash payment of $ 3.5 million. The Company is also eligible to receive up to $ 54.5 million in additional potential development, regulatory approval and commercial-based milestone payments, consisting of: • $ 3.0 million for achievement of the primary endpoint in the first registrational clinical study of either MM-121 or MM-111; • Up to $ 16.5 million in total payments for the achievement of various regulatory approval and reimbursement-based milestones in the United States, Europe and Japan; and • Up to $ 35.0 million in total payments for achieving various cumulative worldwide net sales targets between $100.0 million and $ 300.0 million for MM-121 and MM-111. In January 2023, Elevation announced that it had paused further investment in the clinical development of seribantumab and intends to pursue further development only in collaboration with a partner. In January of 2024 Elevation announced that it is evaluating initiation of a development program utilizing a antibody drug conjugate (ADC) targeting HER3. Elevation has not disclosed if this preclinical program utilizes intellectual property licensed from Merrimack. Elevation has also not provided a timeline indicating when this program could reach clinical trials or regulatory approval, if successful. On January 23, 2023, the Company entered into another Asset Purchase Option Agreement (the “Option Agreement”) with another third party (the “Purchaser”), pursuant to which the Purchaser agreed to obtain an exclusive option (the “Option”) to purchase one of the Company’s preclinical programs with a consideration of $ 0.7 million. Under the terms of the Option Agreement, the Purchaser paid to the Company the Option fee of $ 0.2 million and the Company incurred transaction costs less than $ 0.1 million. A net gain of $ 0.1 million was recognized in January 2023. The Purchaser decided not to exercise the Option in July 2023 . The Company's remaining non-commercial assets, including its clinical and preclinical development programs, and all material other clinical and pre-clinical development programs have been sold with the exception of one program. The Company is subject to risks and uncertainties common to companies in the biopharmaceutical industry, including, among other things, its ability to secure additional capital to fund operations, development by competitors of new technological innovations, protection of proprietary technology and compliance with government regulations. None of the Company’s product candidates sold to others or retained by the Company are approved for any indication by the FDA or any other regulatory agency. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies, among others. In addition, the Company is dependent upon the services of its external consultants for the operation of the Company. In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern , the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. As of March 31, 2024, the Company had an accumulated deficit of $ 347.4 million. During the three months ended March 31, 2024, the Company incurred net loss from continuing operations of $ 0.4 million and used $ 1.3 million of cash in operating activities. The Company expects to continue to generate operating losses for the foreseeable future. The Company expects that its cash and cash equivalents and short-term investments of $ 244.1 million at March 31, 2024 will be sufficient to fund operations for the foreseeable future. |
