Merrimack Pharmaceuticals, Inc. (MACK) recently announced the pricing of its concurrent underwritten public offerings of convertible senior notes and shares of its common stock. The company is looking to issue 5 million shares of its common stock at $5 per share.
The convertible senior notes with an annual interest rate of 4.5% will mature on Jul 15, 2020. The interest will be paid semiannually, Jan 15 and Jul 15 being the interest payment dates, starting from Jan 15, 2014.
The underwriters have been granted an option to purchase additional 750,000 shares of Merrimack’s common stock and an option of purchasing up to an additional $18.75 million in aggregate principal amount of the Notes.
Net proceeds from these offerings will be used by the company to advance the development of its oncology candidate, MM-398, as well as other pipeline candidates. MM-398 is a phase III candidate being developed for the second-line treatment of pancreatic cancer patients, whose disease has progressed after treatment with Eli Lilly and Company’s (LLY) Gemzar (gemcitabine).
MM-398 was granted orphan drug designation by the European Medicines Agency (:EMA) and US Food and Drug Administration in 2011, for the treatment of pancreatic cancer. MM-398 is being studied in several phase I and phase II studies for cancer indications other than pancreatic cancer.
Merrimack currently carries a Zacks Rank #4 (Sell). At present, in the biopharma space, companies like Jazz Pharmaceuticals (JAZZ) and Sarepta Therapeutics, Inc. (SRPT) look well positioned with a Zacks Rank #1 (Strong Buy).
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