Merrimack’s lesson in humility

At a time when biotechs are frequently criticised for rewarding failure with lavish C-suite compensation, it’s worth giving credit to Merrimack for having pursued a starkly different path. Amazingly, Merrimack has for the past five years had zero employees, operating as a legal entity administered solely by external consultants. That followed the sale of its liposomal irinotecan Onivyde to Ipsen in 2017, after which Merrimack’s executive team was dismissed and the group went into survival mode, existing solely for the purpose of receiving a $225m milestone payment from Ipsen, due on Onivyde’s US approval for first-line pancreatic ductal adenocarcinoma. The approval came this week, and after banking the $225m Merrimack will seek permission to wind itself up and distribute its cash as a one-off shareholder windfall. Onivyde’s backing is somewhat slender – in the Napoli-3 study Onivyde plus Nalirifox narrowly beat Abraxane plus gemcitabine, with an OS p value of 0.04, and hazard ratio confidence interval upper bound of 0.99 – but pancreatic cancer treatments are desperately needed, and patients now have another choice. Even if Onivyde underwhelms commercially Merrimack should be congratulated for extracting the maximum possible benefit for its investors.

Merrimack's reward

Notes: *external consulting fees only; **pro forma, including the Ipsen milestone. Source: SEC filings.