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Merrimack Pharmaceuticals, Inc. (MACK) Message Board

  • orinda_fellow orinda_fellow Sep 27, 2012 2:20 PM Flag

    Burn and Need

    While some may worry about the overhang of shares, I doubt many will be sold. It will be a traded stock but as Boogins correctly observed, biotech is high risk, high reward. My only question to be answered at the next earnings call is how big is their burn? I think Bob Mulroy an able and smart CEO who does not make the usual biotech mistake, he is never short of capital. I have to believe they will finance again in Q1 2013 if no new collaboration is forthcoming. All their clinical trials are not cheap and I expect two more molecules in the clinic in the next six months.

    I too am a long term MACK owner and believe this company to be the next Genetech.

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    • I believe that your comments about cash burn and the need to secure additional funding combined with an increase of 71 million newly tradable shares this week on a base of 14.3 million IPO shares is providing a significant overhang. Now add in the reasonable likelihood of a secondary to finance their continuing cash burn and the stock may have greater near term risk of trading lower and longer term opportunities for appreciation. Mack shares could trade down to the 50 day SMA of $ 8.10, or even break the August 22 low of $ 7.28 if very promising results are not reported " in a week or so when the Phase I results for two of their lead products are announced at the European Society of Medical Oncology conference." Even if the results are positive the large share overhang and prospect of a near term secondary are existent.

 
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