Merrimack Pharmaceuticals Announces Closure Following $225 Million FDA Approval Milestone
CAMBRIDGE, Mass. — In a significant development for the pharmaceutical industry, Merrimack Pharmaceuticals Inc. (NASDAQ:MACK) has declared its intent to dissolve after receiving a milestone payment of $225 million. This substantial sum, awarded by Ipsen SA, comes after the U.S. Food and Drug Administration (FDA) greenlit Onivyde for the first-line treatment of metastatic pancreatic ductal adenocarcinoma.
The milestone payment, a critical component of the 2017 asset purchase agreement between Merrimack and Ipsen, is scheduled to be paid by March 29, 2024. The FDA's endorsement of Onivyde, enhanced with other chemotherapy agents, marks the culmination of years of clinical trials and regulatory endeavors led by Ipsen following its acquisition of the technology from Merrimack. This pivotal approval has activated the substantial milestone payment as outlined in the original agreement.
Gary Crocker, Chairman of Merrimack's Board of Directors, outlined the company's forward motion, specifying that a Special Meeting of Stockholders is to be convened by May 2024. The agenda of this meeting will be to sanction a corporate dissolution plan, post which Merrimack anticipates distributing a liquidating dividend to its shareholders. These disbursements are projected to range between $14.65 and $15.35 per share, slated for late spring or early summer.
Further assessments by Merrimack's board, considering the agreements with Ipsen and Elevation Oncology, have led to the anticipation that no additional payments will be forthcoming. The company is thus gearing up for dissolution, which entails establishing a liquidating trust for shareholders in the unlikely scenario of future payments.
This epochal announcement underscores the closure of a significant chapter in Merrimack's history and delineates the roadmap for the distribution of accrued assets to its shareholders in the aftermath of the FDA's approval.
Analyst comment
Positive news.
As an analyst, the closure of Merrimack Pharmaceuticals following the FDA approval milestone and subsequent liquidation will result in the distribution of a liquidating dividend to shareholders. This is projected to range between $14.65 and $15.35 per share and is expected to take place in late spring or early summer.
