Merrimack Pharmaceuticals Inc (NASDAQ:MACK) recently announced that it was selling its oncology assets to Ipsen SA, the French drugmaker. For any Pharma company, selling off its valuable assets is something that can send jitters to its shares. The company made this announcement on Sunday, quoting that it would also sell its pancreatic cancer drug, Onivyde, along with Doxil’s generic version.
About the Transaction
Both the drugs are of paramount importance to Merrimack Pharmaceuticals Inc. Onivyde, along with Doxil’s generic version was off loaded from the company’s portfolio for $1.025 billion. In the transaction, Merrimack will be legible to receive $575 million as cash, as and when the deal comes to closure. The company has also sold off its key oncology assets to French company in return of milestone payments that t shall continue to receive. Merrimack Pharmaceuticals announced that Ipsen SA will pay up to $450 million in the form of additional milestone payments. The transaction can be finished off by Q1 2017.
Why did Merrimack Pharmaceuticals offload company’s oncology assets from the portfolio?
Company CEO and Chairman, Gary Crocker, in this regard said that the company’s agreement to sell of Onivyde and generic Doxil comes after much thinking. At present, he stated, Merrimack Pharmaceuticals is focussed on MM-121, MM-141 and MM-310.
By selling off the two drugs to French company, the company would be able to maximize value to its shareholders and stockholders, as well as, fuelling the R&D and further processes of MM-121, MM-141 and MM-310. The CEO stated, “The process shall strength our technology and the power of systems biology.”
Meetings the ends by product sale and workforce slashing
From what seems as of now, is that the company is trying to meet the ends for further products through this action. Apart from selling its key products, Merrimack Pharmaceuticals has also decided to eliminate approximately 80% workforce, which is massive. This would mean that the head count of company would go from 400 to just about 80.