Merrimack Pharmaceuticals, Inc, a clinical-stage oncology company focused on biomarker-defined cancers, today announced the closing of a $25 million term loan with Hercules Capital, $15 million of which was funded at closing today. Merrimack’s current cash and cash equivalents, including the $15 millionof loan proceeds received, and certain potential net milestone payments anticipated from Shire are projected to fund the company’s planned operations into the first quarter of 2020.
“This non-dilutive financing strengthens Merrimack’s financial position, allowing us to remain focused on advancing the discovery, clinical and business development efforts for our nine wholly-owned programs in development, including our two clinical readouts expected later this year from MM-121 and MM-310,” said Richard Peters, M.D., Ph.D., President and Chief Executive Officer of Merrimack. “We appreciate the support of Hercules, a well-respected investor known for partnering with attractive companies and promising product candidates in the healthcare sector.”
Under the terms of this loan, in addition to the $15 million received at loan closing, Merrimack is eligible to receive up to an aggregate of $10 million in two equal tranches upon satisfaction of certain conditions, including, for the first tranche, the availability of top-line clinical data supporting the continued development of MM-121, the company’s monoclonal antibody targeting the HER3 (ErbB3) receptor.
“Given Merrimack’s anticipated clinical readouts and potential milestone payments from Shire, Hercules is pleased to enter into this financing partnership with Merrimack as they continue their work to develop novel precision therapies for patients with biomarker-defined cancers,” said Scott Bluestein, Chief Investment Officer of Hercules. “This debt facility demonstrates our ability to finance life sciences companies through multiple stages of development and upcoming value inflection points.”
As a reminder, Merrimack is entitled to receive up to an aggregate of $33.0 million in net milestone payments from Shire as a result of Merrimack’s asset sale to Ipsen in 2017, if certain milestones are met. A portion of these payments is included in the company’s cash runway guidance.
In addition, pursuant to the asset sale to Ipsen, Merrimack is eligible to receive an aggregate of $450 million in milestone payments from Ipsen, which Merrimack has previously said it expects to pass through to stockholders, net of any taxes owed and subject to there being sufficient surplus at that time.