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Merrimack Pharmaceuticals, Inc. (MACK) Message Board

  • eyesandears51 eyesandears51 Feb 1, 2013 12:56 AM Flag

    Tough Love for an Ailing MACK

    MACK's challenge as a stock is the lack of visible, and measurable catalysts. MACK has under-performed the broader market as represented by the SPY for 1 year, 6 months, 3 months and YTD respectively.The same under-performance is even more pronounced, compared to the IBB Biotech ETF. Management and the Board appear to be pursuing their mission as if they are operating as a grant based research institute pursuing laudable and societaly beneficial goals, albeit without a commercially compensatory outcomes. Attaining well communicated, verifiable, clinical milestones is the mothers milk feeding the passion for firms such as PCYC, SRPT, and perhaps the gold standard REGN. REGN has built a large company by translating clinical performance into an ATM machine for their shareholders.....a win win to be sure.

    I have a meaningful stock position in the company, and wish them success for many tangible and intangible reasons. To use an old sailing analogy, if MACK's stock were in a sailing race it could be perceived as being " in irons ", read that not well positioned relative to the prevailing wind. Exciting and attracting investors requires catalysts!

    Please view this commentary as intended to be encouraging and constructive.

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    • The message boards here outline the need to raise capital in 2013 to fund 2014+. The alternatives raised have focused on the old reliable dilutive secondary. The questions revolve around timing before or after the release of clinical results. This strategy has obvious rewards and risks depending on the prospects for positive data.

      I am personally a fan of the company and have backed this up with a significant but frankly problematic investment. Investors, management, and the board need to accept the reality that the medical problem to be solved is real, the science is promising, but the long and expensive time frame for success has resulted in a stock that without positive momentum for an extended period of time. It may now be the time to sell MACK to a larger Pharma or Bio Pharma company, that will be able to offer a stable and sustainable funding base to support the R&D and subsequent marketing.

      • 1 Reply to eyesandears51
      • They also have a $40MM line of credit, but I don't see that as more than a Band-Aid on the problem. I think institutions see exactly as we do here that there is a need for cash and company's inability or unwillingness to raise it seems like they are gambling the company's future on the results of MM-398 (and unecessarily at that). This kind of bravado by management makes for risky investment opportunity and the institutions see this plainly. Why not raise 40-60 million now with 10 million share secondary to secure the company's post-MM-398 future, then if MM-398 is delayed for any reason they will not be required to take desperate (read expensive to shareholders) measures and if it's perfectly ready for NDA filing they can raise addtional capital at higher share price. I'm concerned that if anything happens even slightly less than expected (i.e. a delay or less than perfect data), then anyone in the stock now will be looking at a 50% pps drop initially while they scramble to get financing in order. I think they could based on the pipeline, but why risk it all on data from MM-398? Am I missing something here or is this a very risky biotech investment.?

        Sentiment: Strong Buy

    • Well articulated analysis. MACK presented without share price impact, MM-111 at the American Society of Clinical Oncology 2013 Gastrointestinal Cancers Symposium, January 24-26, 2013 in San Francisco. A similar opportunity to attract attention was missed at the January 10 widely followed J.P. Morgan Healthcare Conference also in San Francisco, described by Forbes as the
      " Burning Man of biotechnology." As EYES and EARS suggested management and the board need to prioritize communication with Investment Banking Research analysts and their Institutional Clients. MACK has a small % of the outstanding float held by institutions and mutual funds, a high concentration with only four. MACK has little buzz with the folks who move share price in the biotech world.

      • 2 Replies to crkenmore
      • So with all this thread has posted in mind, why invest here at $600M market cap? What are the expected catalysts this year that could drive share price higher? Science, on first blush, looks good, but that's not enough to enusre success. What drove the share price up to $12 last year? And why did it collapse just as fast back to IPO level?

        Sentiment: Hold

      • Feb 20, MACK reports on quarterly performance. As previously discussed, biotech's require catalysts to move the stock price. To date MACK has not participated in the November post election rally that many believe is aging. Meaningful progress against clinical and commercial milestones is necessary for this stock to replace it's neutral and reverse gears, with forward momentum. Failure to articulate and execute on milestones will likely result in the stock being viewed as a " field of dreams ". Bad positioning if the market realizes a pullback.

 
MACK
9.03-0.07(-0.77%)Nov 21 4:00 PMEST

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