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Nature of the Business
3 Months Ended
Mar. 31, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Nature of the Business

1. Nature of the Business

Merrimack Pharmaceuticals, Inc. (the “Company”) is an early stage biopharmaceutical company based in Cambridge, Massachusetts focused on outthinking cancer by targeting biomarker-defined cancers. The Company’s vision is to ensure that cancer patients and their families live fulfilling lives. The Company’s mission is to transform cancer care through the smart design and development of targeted solutions based on a deep understanding of cancer pathways and biological markers. The Company owns worldwide development and commercial rights to all of its programs.

On April 3, 2017, the Company completed the sale (the “Asset Sale”) to Ipsen S.A. (“Ipsen”) of its right, title and interest in the non-cash assets, equipment, inventory, contracts and intellectual property primarily related to or used in the Company’s business operations and activities involving or relating to developing, manufacturing and commercializing ONIVYDE®, its first commercial product, and MM-436. In connection with the Asset Sale, the Company is eligible to receive up to $450.0 million in additional regulatory approval-based milestone payments. The Company also retained the right to receive net milestone payments that may become payable for the ex-U.S. development and commercialization of ONIVYDE for up to $33.0 million pursuant to a license and collaboration agreement (the “Servier Agreement”) between Ipsen and Les Laboratoires Servier SAS (as assignee from Shire plc). The Company entered into the Servier Agreement in 2014, and on April 3, 2017, the Servier Agreement was assigned to Ipsen in connection with the completion of the Asset Sale. To date, the Company has received $28.0 million of the potential $33.0 million in milestone payments under the Servier Agreement.

On November 7, 2018, the Company announced that it had retained external advisors to explore strategic alternatives.

On April 4, 2019, the Company announced that it is discontinuing development of its sole clinical stage program, MM-310, its antibody-directed nanotherapeutic for the treatment of solid tumors. This decision was the result of a comprehensive review of available safety data from its Phase 1 clinical trial of MM-310. Based on emerging data since the amendment of the clinical protocol in late 2018, the Company concluded that the trial would not be able to reach an optimal therapeutic index for MM-310.

On April 4, 2019, the Company also announced that it expects to initiate a workforce reduction as it closes out clinical activities, reflective of its narrowed preclinical pipeline and in line with prior cost-cutting measures.

On April 4, 2019, the Company also announced that, in light of its ongoing strategic process, the Company intends to continue to prudently advance its preclinical immuno-oncology pipeline: MM-401, an agonistic antibody targeting a novel immuno-oncology target, TNFR2, and MM-201, a highly stabilized agonist-Fc fusion protein targeting death receptors 4 and 5.

The Company is subject to risks and uncertainties common to companies in the biopharmaceutical industry, including, among other things, its ability to secure additional capital to fund operations, success of clinical trials, development by competitors of new technological innovations, dependence on collaborative arrangements, protection of proprietary technology, compliance with government regulations and dependence on key personnel. In addition, the Company is engaged in a process to explore its strategic alternatives, which could result in potential changes to its current business strategy and future operations, but the Company cannot be sure when or if this process will result in any type of transaction or any other specific action by it.

The Company’s product candidates are in preclinical development, and none are approved for any indication by the U.S. Food and Drug Administration (“FDA”) or any other regulatory agency. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained or maintained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies, among others. In addition, the Company is dependent upon the services of its employees and consultants.

In accordance with Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. As of March 31, 2019, the Company had an accumulated deficit of $533.7 million. During the three months ended March 31, 2019, the Company incurred a net loss of $10.5 million and used $13.7 million of cash in operating activities. The Company expects to continue to generate operating losses in the foreseeable future. The Company expects that its cash, cash equivalents and marketable securities of $58.5 million at March 31, 2019 will be sufficient to fund its operating expenses, debt service obligations and capital expenditure requirements for at least the next 12 months from issuance of the financial statements. The future viability of the Company beyond that point is dependent on its ability to raise additional capital to finance its operations.

The Company will ultimately need to seek additional funding through public or private equity or debt financings, through existing or new collaboration arrangements, or through divestitures of its assets. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into additional collaborative arrangements or divest its assets. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. Arrangements with collaborators or others may require the Company to relinquish rights to certain of its technologies or product candidates. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate its research and development programs, which could adversely affect its business prospects.