Merrimack ($MACK) is to cut nearly a quarter of its workforce as its chief, Robert Mulroy, also announces he will be leaving the company in a major restructuring drive aimed at saving cash.
The Cambridge, MA-based cancer biotech will cut 22% of its 426-strong staff starting today as its current chair of the board, Gary Crocker, will captain through tumultuous seas on a temporary basis as his team looks for a replacement for Mulroy.
Much of the cuts are already done, with all to be made by the end of the year, the biotech said in a statement.
Crocker said: “The board is committed to focusing our resources. This major restructuring will allow us to strategically align our pipeline with our core capabilities and prioritize ongoing clinical development efforts while improving our financial flexibility.
“We believe this sharper focus will drive efficiency and innovation and promote the interests of not only our shareholders and employees, but also of cancer patients worldwide. The realization of shareholder value will become as intense a focus for Merrimack as our strength in innovation and development. The board is convinced that there is tremendous inherent value within Merrimack that can be unlocked.”
John Dineen, chairman of the Organization and Compensation Committee--and former CEO of GE Healthcare--has been put in charge of finding a new CEO.
This comes a year after the FDA approved the company’s pancreatic cancer med Onivyde (irinotecan liposome injection), although the drug faced setbacks in testing.
Merrimack said however that its cuts will “not impact the commercial team or the execution of Onivyde’s commercial launch and label expansion.”
"This strategic shift is designed to align our resources with the programs that have the greatest potential for disruptive change in the diagnosis and treatment of cancer, as well as to significantly increase our financial flexibility," added Dr. Yasir Al-Wakeel, CFO and head of corporate development.
This should help it save around in $200 million “in expected expenses through research and development efficiencies, prioritization and cost containment over the next two years,” Al-Wakeel said.
Back in July the biotech’s lung cancer candidate seribantumab was given a speedy review tag from the FDA.
Its shares fell by more than 8.7% premarket, with its stock down 31% over the past year.