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Merrimack (MACK) Buy Rating Reiterated at Cantor Fitzgerald

September 24, 2014 1:23 PM EDT
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Price: $14.77 +0.14%

Rating Summary:
    5 Buy, 2 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Cantor Fitzgerald maintained a Buy rating on Merrimack Pharmaceuticals (NASDAQ: MACK) with a price target of $16.00. Earlier Merrimack and Baxter International Inc. (NYSE: BAX) jointly announced an exclusive license and collaboration agreement for the development and commercialization of MM-398 (nanoliposomal irinotecan injection), also known as ''nal-IRI.''

Analyst Daniel Brims said, "Under the terms of this agreement, in return for the rights to MM-398 ex-US with the exception of Taiwan, MACK will receive $100M upfront, $100M in developmental milestones, a tiered royalty, and $120M in regulatory milestones as well as $250M in sales milestones. MACK was in need of additional capital to get MM-398 across the finish line, and we believe the source of that financing was a major overhang. We expect MACK will now end 2014 with ~$133M in cash and this will fund operations until 3Q:15, allowing MACK to gain approval of MM-398."

"We continue to believe the NDA for MM-398 will be submitted to the FDA for 2nd line pancreatic cancer by YE:14. The deal with Baxter includes $100M in developmental milestones for expansion into two additional indications. We believe Baxter and MACK will likely set up a joint steering committee for development of additional indications, though we expect them to initially pursue front line pancreatic cancer," he continued.

"A network biology based approach has led to the advancement of four antibody candidates in early clinical testing. These assets are wholly owned by MACK, and we would expect that the company is actively seeking partnerships to generate non-dilutive financing. MM-121 is the highest priority of these assets, and MACK has indicated that it is currently talking with the FDA about the regulatory path forward for the drug as well as actively seeking partnering opportunities. MACK is also conducting a phase 2 trial of MM-111 in gastric cancer, which we expect will read out in 2015. We believe MACK will initiate phase 2 studies for MM-141 and MM-151 before YE:14, and any of these assets are opportunities for business development," he added.

For an analyst ratings summary and ratings history on Merrimack Pharmaceuticals click here. For more ratings news on Merrimack Pharmaceuticals click here.

Shares of Merrimack Pharmaceuticals closed at $7.19 yesterday.



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