Shares in Merrimack Pharmaceuticals Inc (NASDAQ:MACK) were already another pressure after the announcement of a massive retrenchment and the departure of its CEO on October 3.
On Friday, shares were cut another 8.36% and closed at $5.48 after an analyst downgrade.
Merrimack is an integrated biopharmaceutical company that is building a pipeline of drugs in oncology.
Merrimack Pharmaceuticals Inc (NASDAQ:MACK) down after JP Morgan’s downgrade
Shares of Merrimack took it on the chin after analysts at JP Morgan reduced their rating from Overweight to Neutral and their price target from $8 to $7.
According to TheStreet, JP Morgan felt the shares are likely to remain locked in a trading range in the absence of any catalysts until Q2 of 2017, or even later.
JP Morgan also said that the company’s 2016 estimates are likely to be met and may not be meaningfully beatable.
Merrimack Pharmaceuticals Inc (NASDAQ:MACK) to save $200 million in costs
Merrimack announced October 3 that it was embarking on a major corporate restructuring designed to save $200 million in costs over the coming two years.
As a first step, president and CEO Robert Mulroy put in his papers, to be followed by layoffs amounting 22% of the employee count. That could be about 90 employees.
Chairman Gary Crocker will be the interim replacement for Mulroy.
According to the company, the rejig will allow Merrimack to concentrate on its key product pipeline developments.
Merrimack Pharmaceuticals Inc (NASDAQ:MACK) Q2 results
Merrimack reported Q2 EPS of $-0.40 which missed by $0.07, and revenue of $33.68 million which beat by $2.71 million but was down 7.9% year on year.
That includes $12.9 million of net product revenues from sales of Onivyde, representing an approximate 30% increase compared to Q1 2016. The rise is encouraging, because Onivyde is the company’s successful metastatic pancreatic cancer treatment.
Technically, however, investors should look to enter the stock if it is able to take out the 200-day moving average around $6.50.