Insider Weekends: Strange Cluster of Purchases At A Microcap Company

We decided to continue our recent tradition of looking beyond the top five insider purchases and sales this week after seeing some interesting purchases at a tiny company that saw its stock jump up more than 200% in a single day a few weeks ago. Three different insiders of the company purchased $3 million worth of shares after this big run up in the stock.

Merrimack Pharmaceuticals (MACK) is a biopharmaceutical company located in Cambridge, Massachusetts that does not have any ongoing research and development nor does it have any employees. The reason for the big jump in the stock price and the considerable insider buying given the small size of the company is the pancreatic cancer treating drug Onivyde, which was sold to Ipsen on April 3, 2017.

As part of this sale, Merrimack Pharmaceuticals was entitled to receive up to $450 million in the form of contingent milestone payments from Ipsen, broken up into:

• $225.0 million upon approval by the U.S. Food and Drug Administration, or FDA, of Onivyde for the first-line treatment of metastatic adenocarcinoma of the pancreas, subject to certain conditions;
• $150.0 million upon approval by the FDA of Onivyde for the treatment of small-cell lung cancer after failure of first-line chemotherapy; and
• $75.0 million upon approval by the FDA of Onivyde for an additional indication unrelated to those described above.

Merrimack is also entitled to receive up to $54.5 million in contingent milestone payments from Elevation Oncology following the sale of their anti-HER3 antibody programs in June 2019, but this number is nowhere as significant as the $450 million possible payment from Ipsen. Moreover, Merrimack is looking for acquirers for the rest of its preclinical and clinical assets.

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