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Merrimack Pharmaceuticals, Inc. (MACK) Message Board

  • boogins_00 boogins_00 Jan 15, 2013 2:39 PM Flag

    Valuation

    I'm not sure the market understands this stock. In fact I'm sure it doesn't.

    The story is atypical, for sure, as Merrimack has about twice the pipeline that most early / mid stage biotechs have. So instead of this being the usual 'win big or go bust' scenario that any biotech investor knows all too well, this is more of a pipeline value play. It does seem amazing to me that a company can have six compounds in clinical trials---one in Phase III and one in Phase II(soon to be two in Phase II)---and have a valuation of something around $600M.

    Take a look at Pharmacyclics, for example. Same basic level of advancement, a bit smaller pipeline, and the valuation is seven times as high as Merrimack. No, they don't have any marketed drugs either, the value is based on the pipeline and it's potential only. Reportedly the CEO is a well known and trusted executive, but I hardly think that justifies the difference in valuation between the two companies.

    Personally, I think Merrimack is a huge bargain right now as it's value on a take out would be a multiple of the current market cap. Hopefully as the trials advance and the results come in the gap between PCYC and MACK will close.

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MACK
7.29+0.05(+0.69%)Sep 19 4:00 PMEDT

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