Oppenheimer analyst Ling Wang reiterated an Outperform rating and boosted her price target on Merrimack Pharmaceuticals (NASDAQ: MACK) to $15.00 (from $13.00) after the FDA approved Onivyde (irinotecan liposome injection, or MM-398) in combination with fluorouracil (5-FU) and leucovorin (5-FU/LV) for the treatment of metastatic pancreatic cancer after disease progression following gemcitabine-based therapy, making it the first and only FDA-approved treatment option in this setting.

Wang said the broad “post-gem” label is consistent with their expectation. The label has a box warning of neutropenia and diarrhea.

"We believe oncologists are familiar with such warnings, which should not have much impact on drug uptake, in our view," Wang said. "We continue to view post-gem pancreatic cancer as a large unmet medical need and expect Onivyde+5-FU/LV to obtain significant market share (project peak sales of $440M in the US alone). We are reiterating our Outperform rating and raising PT to $15 from $13."

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Shares of Merrimack Pharmaceuticals closed at $9.59 yesterday.