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Subsequent Events
3 Months Ended
Mar. 31, 2017
Subsequent Events [Abstract]  
Subsequent Events

13. Subsequent Events

 

On April 3, 2017, the Company completed the sale of the Commercial Business to Ipsen, which is outlined more fully in Note 3, “Sale of Commercial Business.”

In connection with the closing of the Asset Sale, on April 3, 2017, the Company entered into a transition services agreement with Ipsen pursuant to which the Company and Ipsen are providing certain services to each other for a period of 24 months following the closing, including Ipsen’s agreement to manufacture MM-310 and to perform certain quality related services in accordance with a manufacturing services agreement being negotiated by the parties.

In connection with the completion of the Asset Sale, on April 3, 2017, the Company irrevocably deposited the redemption price of the 2022 Notes of $175.0 million outstanding aggregate principal amount, interest through the redemption date and an additional make-whole premium payment of approximately $20.1 million with U.S. Bank National Association as trustee (the “Trustee”) under the Indenture dated as of December 22, 2015 (the “Indenture”) and irrevocably instructed the Trustee to apply such amount to the redemption in full of the 2022 Notes on the redemption date of April 27, 2017. The Indenture was satisfied and discharged on April 3, 2017.

In connection with the completion of the Asset Sale, on April 3, 2017, the Company entered into a sublease with Ipsen, pursuant to which Ipsen is subleasing from the Company approximately 70,237 square feet of leased space in the Company’s Cambridge, Massachusetts facility through the end of the term of the lease on June 30, 2019.

In connection with the completion of the Asset Sale, on April 3, 2017, the Company entered into an intellectual property license agreement with Ipsen, pursuant to which Ipsen granted to the Company a perpetual, worldwide, non-exclusive, royalty-free, fully paid-up license in and to all patents included in the transferred intellectual property, other than certain patents relating to generic liposomal technology, with respect to which the license will be exclusive, in each case for use outside of the Commercial Business. The Company granted to Ipsen a non-exclusive, royalty-free, fully paid up, perpetual, irrevocable and worldwide license to all patents it owned at the time of the closing of the transaction contemplated by the Asset Sale Agreement for use in connection with the Commercial Business.

On April 3, 2017, the Company entered into an amendment to its facility lease. This lease amendment reduces the final date of the term for approximately 29,157 square feet of leased space at the Company’s current facility in Cambridge, Massachusetts from June 30, 2019 to May 15, 2018 or earlier upon landlord’s election. As a result of this amendment, the Company’s lease payments through 2019 will be reduced by approximately $1.7 million.

In connection with the completion of the Asset Sale and the completion of our strategic pipeline review, on April 3, 2017, the Company reduced its headcount by approximately 30%. Upon the closing of the Asset Sale, the Company had approximately 80 employees.

On April 5, 2017, the Company’s board of directors authorized and declared a special cash dividend of $140.0 million on the Company's common stock. The special dividend is payable on May 26, 2017 to stockholders of record as of the close of business on May 17, 2017. The ex-dividend date for the special dividend will be May 30, 2017, the first trading day following the payment date.

On April 7, 2017, the previously disclosed Loan and Security Agreement (the “Credit Agreement”) between the Company and BioPharma Credit Investments IV Sub, LP expired. No amounts were borrowed under the Credit Agreement.

In connection with a lawsuit filed by the trustee and certain holders of the Convertible Notes in the Court of Chancery in the State of Delaware, captioned Wells Fargo Bank, National Association, Wolverine Flagship Fund Trading Limited, Highbridge International LLC, and Highbridge Tactical Credit & Convertibles Master Fund, L.P. v. Merrimack Pharmaceuticals, Inc. (the “Delaware Action”), the Company has agreed to deposit, and in April 2017 did deposit, $60.0 million in proceeds from the Asset Sale into an escrow account. The funds will remain in escrow for the duration of the Delaware Action in order to provide security to the plaintiffs for their claims in the Delaware Action.