Analyst Conference Summary

biotechnology

conference date: May 8, 2018 @ 5:30 AM Pacific Time
for quarter ending: March 31, 2018 (Q1, fourth quarter 2018)

Forward-looking statements

Overview: Looking forward to two Phase 2 and one Phase 1 clinical clinical trial results in 2018. Running low on cash.

Basic data (GAAP):

Revenue was $0.0 million, down sequentially from $0.0 million and down from $0.0 million year-earlier.

Net income from continuing operations was negative $17.8 million, up sequentially from negative $11.8 million, and up from negative $29.7 million year-earlier.

EPS was negative $1.33, up sequentially from negative $0.89 and up from negative $2.27 year-earlier.

Guidance:

Cash and anticipated milestones from Shire should be sufficient into the second half of 2019.

[WPM: if Phase 2 results are positive and Phase 3 trials begin, they will need to raise more cash or partner to get to regulatory approval]

Conference Highlights:

Richard Peters, CEO, said "At Merrimack, we set out to design targeted solutions with pharmacological properties to match our team's understanding of cancer pathways and drug metabolism. We have been focused on executing this strategy as we advance the ten wholly-owned programs across our clinical and preclinical pipeline, each addressing biomarker-defined cancers. We look forward to our three upcoming clinical readouts: randomized Phase 2 data for istiratumab (MM-141) in pancreatic cancer and seribantumab (MM-121) in non-small cell lung cancer and Phase 1 data for MM-310 in solid tumors."

A Phase 2 clinical trial of Onivyde for front-line metastatic pancreatic cancer continued enrollment. This could address 46,000 patients annually in the U.S. It could also generate milestone payments from Ipsen if results are positive.

MM-121 (seribantumab) Phase 2 trial (SHERLOC) in non-small cell lung cancer who are heregulin positive continued, with data due in 2H 2018. Retooled the trial into a proof of concept study with a top-line readout in 2H 2018. Received orphan drug designation from the FDA. On March 12, 2018 announced would expand trial from 80 to 100 patients. This was driven by faster-than-expected enrollment, so top line data is still due in 2H 2018.

Phase 2 trial (SHERBOC) of MM-121 plus standard of care (sylvestran) for heregulin positive, hormone receptor positive, HER2 negative breast cancer enrolled its first patient in Q1.

An MM-141 Phase 2 clinical trial completed enrollment in June 2017 for frontline pancreatic cancer who have high serum IGF-1 levels, in combination with existing therapies. It is a bispecific antibody. Blocks two upstream redundant pathways. Expects topline results in late Q2 2018 with progression free survival as the primary endpoint. About 50% of pancreatic cancers display high IGF-1.

MM-310 is an antibody directed nanoliposome targeting the EphA2 receptor, which is present in many major tumor types. Delivers docetaxel as a prodrug. Initiated the Phase 1 trial in a variety of solid tumors with a dosing schedule result expected in 2H 2018. Believes will reduce toxicity.

Merrimack has other compounds in preclinical development. It is a biomarker-driven approach.

Merrimack plans to seek partners for the development of its therapies once proof-of-concept has been established. Merrimack has a total of 10 drugs with clinical or preclinical status.

See also the Merrimack Pipeline.

Cash and equivalents ended at $76.3 million, down sequentially from $93.4 million. No debt.

Costs and expenses were $ million, consisting of: $0.0 million cost of goods sold, $13.1 million for R&D; and $4.3 million for selling, general and administrative expense. Operating profit was negative $ million. Other expenses (mainly interest) were $ million. Income tax . Net loss from continuing operations was $ million.

Q&A:

Pancreatic cancer trial goals? PFA of 8 months v. 5 months for the control arm. Overall survival in this type of population is about 8 months, so an OS better than that would be a win. It is a proof-of-concept trial. In our trial all patients have high IGF1. Both arms include chemotherapy, one with our drug and one with placebo.

Pipeline candidates, any potential partnership talks? We have 6 programs that are preclinical, which are all fully owned by us. We are having ongoing discussions with a number of potential partners with both the clinical candidates and the preclinical ones.

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