Merrimack Pharma Reduces Headcount By 22%; CEO Robert Mulroy Resigns

(RTTNews) - Merrimack Pharmaceuticals, Inc. (MACK) announced a major corporate restructuring, under which the company is immediately implementing a 22% reduction in headcount and eliminating more than $200 million in expected costs over the next two years. In line with the restructuring, the Board of Merrimack Pharma has accepted the resignation of President and CEO Robert Mulroy, effective immediately. The Board has appointed Chairman of the Board Gary Crocker as interim President and CEO.

Merrimack believes the restructuring places the company in a much stronger financial position. Merrimack said the strategic shift is designed to align its resources with the programs that have the greatest potential for disruptive change in the diagnosis and treatment of cancer, as well as to significantly increase financial flexibility.

Yasir Al-Wakeel, CFO, stated: "Merrimack now anticipates aggregate research and development and selling, general and administrative expenses in 2017 of approximately $190 million when calculated in accordance with GAAP, resulting in a cash runway that is expected to fund operations for at least the next 12 months based on cash on hand, anticipated near term milestones and reimbursements and ONIVYDE profits. This corresponds to a non-GAAP financial measure of $165 million of aggregate research and development and selling, general and administrative expenses in 2017 when excluding $25 million of anticipated milestone obligations to PharmaEngine, which are fully offset by corresponding milestone achievement obligations from Shire."