Business & Finance
Merrimack Receives USD 5m Milestone Payment from Ipsen
6 December 2019 - - US-based drugmaker Merrimack Pharmaceuticals, Inc. (NASDAQ: MACK) has received a USD 5m milestone payment from French drugmaker Ipsen (OTC: IPSEF), triggered by Ipsen's decision to progress the ongoing multi-part clinical trial evaluating Onivyde in patients with small-cell lung cancer into the second randomized portion of the trial focused on efficacy assessment, the company said.

As a result of this milestone payment, Merrimack's board of directors has authorised and declared a special cash dividend of USD 6.7m on the company's common stock.

The special dividend is payable on December 23, 2019 to stockholders of record as of the close of business on December 16, 2019. The ex-dividend date for the special dividend will be December 13, 2019, the first business day preceding the record date.

Stockholders of record on the record date who sell their shares prior to the ex-dividend date will not receive the special dividend.

Based on the current number of shares outstanding, the special dividend will be approximately USD 0.50 per common share; this amount may vary based on the number of outstanding shares as of the record date.

Merrimack currently estimates that, for US federal tax purposes, 100% of the Special Dividend (or approximately USD 0.50 per share) will likely be first treated as a return of capital to stockholders to the extent of their basis in Merrimack common stock, and then as capital gain.

The tax treatment of the special dividend will be based on Merrimack's current and accumulated earnings and profits for Merrimack's 2019 fiscal year ending December 31, 2019.

The process of determining current and accumulated earnings and profits requires a final determination of Merrimack's financial results for FY19 and a review of certain other factors.

The determination will be based in part on factors that are outside of the control of Merrimack and which cannot be ascertained at this time.

Merrimack does not expect the calculation of the portion that will be treated as a taxable dividend for federal tax purposes to be finalised until after the completion of FY19.

Accordingly, the portion of the Special Dividend estimated to be a taxable dividend provided in this release is based upon currently available information and is subject to change.

The precise tax impact of the special dividend to specific stockholders depends upon the stockholder's individual tax situation. Stockholders are advised to consult with their personal tax advisors.

Merrimack Pharmaceuticals, Inc. is a biopharmaceutical company based in Cambridge, Massachusetts that is entitled to receive up to USD 450m in contingent milestone payments related to its sale of ONIVYDE to Ipsen S.A. in April 2017 and up to USD 54.5m in contingent milestone payments related to its sale of anti-HER3 programs to 14ner Oncology, Inc. in July 2019.

The company is seeking potential acquirers for its remaining preclinical and clinical assets.