Merrimack CEO Steps Down as Company Slashes 22% of Jobs
By Alex Keown, BioSpace.com Breaking News Staff
Merrimack said it anticipates saving approximately $200 million in expected costs over a two year period. The cuts are anticipated to impact research and development efficiencies, prioritization and cost containment, the company said. Mulroy’s resignation is effective immediately, Merrimack said in a statement issued this morning. Additionally, the bulk of employees being laid off received their pink slips today and is expected to be completed by Dec. 3.
Taking over the reins of the company is Gary Crocker, who will serve as interim president and chief executive officer.
Merrimack said the restructuring program will allow the company to align its pipeline with its 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,” Crocker said in a statement.
Merrimack currently has five drug candidates in clinical trials, as well as several in preclinical development, according to information on the company’s website. One of its candidates, seribantumab, received Fast Track Designation from the U.S. Food and Drug Administration in August. Seribantumab is being developed for patients with heregulin-positive, locally advanced or metastatic non-small cell lung cancer whose disease has progressed following immunotherapy. Phase II data for seribantumab indicated the drug decreased risk of death by more than 50 percent in HER2-negative, hormone receptor positive breast cancer patients.
While Merrimack has tapped an interim leader, the company board of directors has launched a search for a permanent CEO. John Dineen, former CEO of GE Healthcare and chairman of the Merrimack’s organization and compensation committee, is leading the search process.
In its announcement of Mulroy’s resignation, Merrimack did not heap laurels of accolades on the man who has served as CEO since 1999. The only statement the company provided was a comment from Dineen, who said the company was grateful and “acknowledge his leadership of Merrimack over the years.”
Merrimack said it will provide more information on the restructuring in the Form 8-K it will file Oct. 3 with the U.S. Securities and Exchange Commission. Additionally, Merrimack plans to provide more financial and strategic details regarding the conclusion of this product prioritization process by the end of the fourth quarter.
Shares of Merrimack Pharmaceuticals are down more than 8 percent in premarket trading. The stock closed at $6.35 per share on Friday.