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Merrimack Reports First Quarter 2013 Financial Results

Cautionary Note on Forward-Looking Statements

To the extent that statements contained in this press release are not descriptions of historical facts, they are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements include any statements about Merrimack's strategy, future operations, future financial position and future expectations and plans and prospects for Merrimack, and any other statements containing the words "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue," and similar expressions. In this press release, Merrimack's forward-looking statements include statements about Merrimack's anticipated milestones over the next 12 months, Merrimack's presentations at upcoming investor and scientific conferences and expectations regarding the sufficiency of Merrimack's cash balance to fund operating expenses and capital expenditures. Such forward-looking statements involve substantial risks and uncertainties that could cause Merrimack's clinical development programs, future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the uncertainties inherent in the initiation of future clinical trials, availability of data from ongoing clinical trials, expectations for regulatory approvals, development progress of Merrimack's companion diagnostics, availability of funding sufficient for Merrimack's foreseeable and unforeseeable operating expenses and capital expenditure requirements, and other matters that could affect the availability or commercial potential of Merrimack's drug candidates or companion diagnostics. Merrimack undertakes no obligation to update or revise any forward-looking statements. Forward-looking statements should not be relied upon as representing Merrimack's views as of any date subsequent to the date hereof. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to Merrimack's business in general, see the "Risk Factors" section of Merrimack's Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on March 20, 2013 and other reports Merrimack files with the SEC.
Merrimack Pharmaceuticals, Inc.          
Unaudited Condensed Consolidated Statements of Comprehensive Loss  
(in thousands, except per share amounts)        
  Three Months Ended March 31,  
  2012 2013  
Collaboration revenues $11,344 $14,655    
Operating expenses:        
Research and development 31,651 36,989    
General and administrative 3,728 4,932    
Total operating expenses 35,379 41,921    
         
Loss from operations (24,035) (27,266)    
         
Other income and expenses, net 633 (1,057)    
         
Net loss $(23,402) $(28,323)    
         
Less net loss attributable to non-controlling interest (118) (170)    
         
Net loss attributable to Merrimack $(23,284) $(28,153)    
         
Other comprehensive income -- 18    
         
Comprehensive loss $(23,284) $(28,135)    
         
Net loss per share available to stockholders - basic and diluted $(2.14) $(0.29)    
         
Weighted-average common shares used in computing net loss per share available to common stockholders - basic and diluted (1) 11,846 95,879    
(1 ) In April 2012, Merrimack closed the initial public offering of its common stock pursuant to a registration statement on Form S-1, as amended. Merrimack sold an aggregate of 15,042,459 shares of common stock under the registration statement at a public offering price of $7.00 per share, including 742,459 shares pursuant to the exercise by the underwriters of an over-allotment option. Net proceeds were approximately $98.1 million, after deducting underwriting discounts and commissions and other offering expenses payable by Merrimack but prior to the payment of accrued dividends on Merrimack's Series B convertible preferred stock. Upon closing the initial public offering, all outstanding shares of Merrimack's convertible preferred stock were converted into 66,255,529 shares of common stock, all outstanding warrants to purchase shares of convertible preferred stock were converted into warrants to purchase shares of common stock and approximately $4.3 million of cash dividends became payable to the holders of Series B convertible preferred stock.        
   
   
Merrimack Pharmaceuticals, Inc.  
Unaudited Condensed Consolidated Balance Sheets  
(in thousands)    
Assets As of December 31, 2012 As of March 31, 2013
Cash and cash equivalents $37,714 $28,435
Available-for-sale securities 72,238 58,252
Restricted cash 100 100
Accounts receivable 9,267 9,798
Prepaid expenses and other current assets 8,982 10,167
Total current assets 128,301 106,752
     
Restricted cash 528 528
Property and equipment, net 6,297 7,307
Other assets 1,068 34
Intangible assets, net 2,165 2,085
In-process research and development 7,010 7,010
Goodwill 3,605 3,605
Total assets $148,974 $127,321
     
Liabilities, Non-Controlling Interest (Deficit) and Stockholders' Deficit    
Accounts payable, accrued expenses and other $24,936 $31,184
Deferred revenues 9,350 8,890
Deferred rent 1,153 1,243
Deferred tax incentives 512 512
Derivative liability 196 231
Loans payable 2,373 6,254
Total current liabilities 38,520 48,314
     
Deferred revenues 71,114 68,509
Deferred rent 6,323 6,735
Deferred tax incentives 755 627
Loans payable 37,482 34,076
Accrued interest 1,200 1,200
Total liabilities 155,394 159,461
     
Non-controlling interest (deficit) 97 (73)
Total stockholders' deficit (6,517) (32,067)
Total liabilities, non-controlling interest (deficit) and stockholders' deficit $148,974 $127,321
CONTACT: Investor & Media Contact:
         Kathleen Petrozzelli Gallagher
         Corporate Communications
         Merrimack
         617-441-1043
         kgallagher@merrimackpharma.com

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