Merrimack Pharmaceuticals: 3 Different Insiders Purchased Shares Last Week

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 |  About: Merrimack Pharmaceuticals (MACK), Includes: IMMU, SNY, THLD
by: Markus Aarnio

In this article, I will feature one biotech company that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.
  2. The stock is sold by no insiders in the month of intensive purchasing.
  3. At least two purchasers increased their holdings by more than 10%.

Merrimack Pharmaceuticals (NASDAQ:MACK) focuses on discovering, developing, and preparing to commercialize medicines paired with companion diagnostics for the treatment of cancer in the United States.

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Insider buying during the last 30 days

Here is a table of Merrimack's insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Purchased Current Ownership Increase In Shares
Gary Crocker Chairman Nov 27 207,000 2,678,271 shares +8.4%
Michael Porter Director Nov 27-29 75,000 352,865 shares +27.0%
William McClements SVP Nov 27-29 7,000 7,000 shares from 0 to 7,000
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There have been 289,000 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of Merrimack's insider-trading activity by calendar month.

Month Insider buying / shares Insider selling / shares
November 2013 289,000 0
October 2013 0 0
September 2013 0 0
August 2013 0 0
July 2013 0 0
June 2013 0 0
May 2013 0 0
April 2013 0 25,483
March 2013 0 0
February 2013 0 0
January 2013 0 0
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There have been 289,000 shares purchased and there have been 25,483 shares sold by insiders this year. The month of November has seen all of the insider buying.

Financials

Merrimack reported the third-quarter financial results on November 7 with the following highlights:

Revenue $6.9 million
Net loss $39.6 million
Cash $182.5 million
Debt $111.3 million
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(Source: Earnings presentation)

Outlook

Merrimack expects its existing unrestricted cash and cash equivalents and available-for-sale securities as of September 30, 2013 of $182.5 million, anticipated interest income and funding under its license and collaboration agreement with Sanofi (NYSE:SNY) related to MM-121 to be sufficient to fund operations into 2015. In the event that Merrimack obtains favorable results from the MM-398 NAPOLI-1 trial, Merrimack expects that anticipated additional expenses in 2014 related to the commercialization of MM-398 will be offset by cash received from potential collaboration opportunities.

Pipeline and upcoming milestones

Merrimack currently has six oncology therapeutics in clinical development, multiple product candidates in preclinical development, and an active Systems Biology-driven discovery effort.

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(Source: Earnings presentation)

Merrimack anticipates the following upcoming milestones:

  • Presentation of data from a Phase 1 clinical trial of MM-302 in the monotherapy and combination settings at the San Antonio Breast Cancer Symposium in December.
  • Announcement in the second quarter of 2014 of top line data for the MM-398 NAPOLI-1 trial.
  • Transition of Phase 1 programs into Phase 2 opportunities to address large, unmet patient needs.

Competition

Merrimack's competitors include Immunomedics (NASDAQ:IMMU), and Threshold Pharmaceuticals (NASDAQ:THLD). Here is a table comparing these companies.

Company MACK IMMU THLD
Market Cap: 429.86M 351.66M 293.16M
Employees: 230 119 48
Qtrly Rev Growth (yoy): -0.40 4.23 0.77
Revenue: 54.15M 9.41M 11.30M
Gross Margin: 0.52 -2.14 1.00
EBITDA: -114.18M -27.44M -22.81M
Operating Margin: -2.16 -3.02 -2.14
Net Income: -122.63M -9.12M 7.56M
EPS: -1.26 -0.12 0.12
P/E: N/A N/A 40.91
P/S: 7.45 38.17 25.83
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Merrimack has the lowest P/S ratio among these three companies.

Here is a table of these competitors' insider-trading activities this year.

Company Insider buying / shares Insider selling / shares
IMMU 0 10,000
THLD 0 1,322,450
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Only Merrimack has seen intensive insider buying during the last 30 days.

Conclusion

There have been three different insiders buying Merrimack and there have not been any insiders selling Merrimack during the last 30 days. Two of these three insiders increased their holdings by more than 10%. Merrimack has an insider ownership of 12.87%.

There are five analyst buy ratings, two neutral ratings, and zero sell ratings with an average price target of $10.08. The insiders purchased their shares around $3.60, which could be a good entry point for the stock.

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(Source: Earnings presentation)

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in MACK over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.