Merrimack Pharmaceuticals, Inc. (MACK) has recently announced it entered into an asset purchase agreement with Ipsen (OTCPK:IPSEY) for approximately a $1 billion. Under the agreement MACK will sell to Ipsen its first commercial product ONIVYDE, including U.S. commercialization and licensing rights with Shire (SHPG), and generic DOXIL, licensing and supply agreement with Activis LLC.
MACK restructuring with an extended cash runway and cost cutting seems to be designed to improve its financial outlook, savings are estimated to be about $200 million over the next two years. Although the pipeline will suffer the loss of ONIVYDE's approximate 15 million per quarter in sales at a growth rate estimated to be between 15 and 20%, there is a $33 million royalty income to be gained from future sales that includes an expansion into Europe. In October 2016, MACK announced it had received FDA ANDA approval for DOXIL, with a growing trend in sales due to drug shortages.
The company unveiled its new clinical pipeline focus in January 2016. It evaluated its candidates with regard to chances of greatest success and determined that MM-121, MM-141, and MM-310 are the programs with highest potential return on investment. This reflects a greater trend in cutting edge cancer treatment to refocus efforts away from toxic chemotherapies (developed in the 1950s) for less toxic alternatives including biosimilars and biobetters.
The writing may be on the wall for doxorubicin hydrocholoride liposome injection (generic DOXIL), with multiple safety concerns notably including cardiotoxicity, and new antibody therapies and drugs showing great promise in late stage clinical trials. Because future pipeline candidates MM-121, MM-141, MM-151, MM-161, and MM-310 are antibody and biobetter therapy approaches, it does make sense to cut loose the older technologies as they start to obsolesce.
As mentioned in the bullet points, a special dividend was declared for
