Merrimack Pharmaceuticals Inc., which began 2016 with promise following its first U.S. approval, for Onivyde (irinotecan liposome injection), has instead seen its business meander and its stock price slump this year. Wednesday brought more of the same after the company disclosed that it was halting the phase II HERMIONE study of MM-302 (HER2 antibody-targeted liposomal doxorubicin) in HER2-positive metastatic breast cancer patients previously treated with the Genentech Inc./Roche Holding AG agents trastuzumab (Herceptin), pertuzumab (Perjeta) and ado-trastuzumab emtansine (T-DM1, Kadcyla).

The company based its decision on a recommendation by the independent data and safety monitoring board (DSMB) and a subsequent futility analysis confirming the trial wasn't likely to show a benefit for MM-302 over comparators. HERMIONE was evaluating MM-302 plus trastuzumab vs. physician's choice of various chemotherapy regimens (capecitabine, gemcitabine or vinorelbine) plus trastuzumab in anthracycline-naïve patients with locally advanced/metastatic HER2-positive breast cancer.

Merrimack said both the treatment and control arms showed shorter than expected median progression-free survival – the primary endpoint measure.

Designed as a phase II/III trial, HERMIONE was expected to recruit approximately 250 patients across more than 100 sites in North America and Europe, according to Cortellis Clinical Trials Intelligence. Secondary outcome measures included patient-related outcomes, duration of response and of objective response, objective response rate and response rate, overall survival and time to treatment failure as well as pharmacokinetic exposure, tolerability and safety, based on the number of patients with adverse events (AEs) related to MM-302.

No new or unexpected safety concerns were cited as part of the study. Merrimack said patients enrolled in the trial could choose to continue on their assigned treatment based on discussions with their study physician.

MM-302 is an antibody-drug conjugated liposomal doxorubicin that targets cancer cells overexpressing the HER2 receptor. The agent was designed to allow for selective drug uptake into tumor cells while limiting exposure to healthy tissues.

Merrimack, of Cambridge, Mass., said it will reveal the next steps for MM-302 in January, along with results of an ongoing pipeline review. The company is scheduled to present on Jan. 11 at the 35th annual J.P. Morgan Healthcare Conference in San Francisco.

Showing signs of impatience, however, investors drove shares (NASDAQ:MACK) to a one-year low of $4.35 on Wednesday. The stock closed at $4.38 for a loss of 99 cents, or 18.4 percent, in heavy trading.

Future prospects pinned to strategic review

Onivyde (irinotecan liposome injection), in combination with fluorouracil (5-FU) and leucovorin (LV), was approved by the FDA two days before its October 2015 PDUFA date to treat patients with advanced pancreatic cancer previously treated with gemcitabine, propelling Merrimack into the ranks of commercial biopharmas. (See BioWorld Today, Oct. 23, 2015.)

The green light was tinged with caution, however, due to a black box warning about risks of fatal or severe complications from neutropenia and diarrhea related to use of the study drug with 5-FU and LV. Bob Mulroy, then Merrimack's president and CEO, told BioWorld Today at the time that Onivyde's AE profile was reasonable relative to other pancreatic cancer therapies.

"These are patients who are among the most delicate in all of cancer care," Mulroy said. "They're all diagnosed pretty late stage. We see the tolerability profile of Onivyde as offering a really great option for patients given the other options."

Certainly, pancreatic cancer is an indication looking for better alternatives, and analysts concluded in January that Onivyde was off to a solid start, recording net sales of $4.3 million vs. consensus estimates of $3.4 million in its first two months on the U.S. market. In May, following the company's first quarter earnings report, Onivyde's net revenue of $10 million still was considered in-line with the consensus of $10.4 million.

By August, however, the drug's trajectory had trailed off, with net sales of $12.9 million falling well short of the consensus of $17 million. That gap prompted Cowen and Co. analyst Eric Schmidt to downgrade the stock to market perform, from outperform.

"While we like MACK's pipeline of novel drug candidates, the revenue shortfall is likely to pressure Merrimack to finance ahead of key 2017 readouts," Schmidt wrote.

From there, the company's story line quickly fell apart. In October, amid slowing Onivyde sales and missed regulatory and sales milestones from its pact with Shire plc, of Dublin (originally struck with Baxter International Inc.), Mulroy stepped down and the company shaved its work force by 22 percent. (See BioWorld Today, Sept. 25, 2014, and Oct. 4, 2016.)

In November, Gary Crocker, Merrimack's chairman and interim president and CEO, launched the company's third quarter earnings call by describing his first month at the helm as "remarkably intense," marked by "very deliberate refocusing, with the entire company working around the clock with a renewed sense of direction, a commitment to spending discipline and to project prioritization." He laid out a strategy to boost Onivyde's existing sales and to expand the drug into small cell lung cancer but revealed that data readouts for some studies – including for MM-302 – might slip due to the pipeline review.

The company reported cash of $48.5 million as of Sept. 30, giving it a runway – when combined with Onivyde sales, potential milestone payments from Shire and the ability to access a $25 million loan – to reach 2018.

Cowen and Co.'s Schmidt was unimpressed, calling Onivyde's performance "lackluster" and pinning the company's future prospects on the results of its strategic review, said to include options for sale or licensing of its assets, including Onivyde, or the company.

Merrimack has a raft of additional programs, including the FDA fast-tracked seribantumab (MM-121), a monoclonal antibody that targets the HER3 receptor for the treatment of patients with heregulin-positive, locally advanced or metastatic non-small cell lung cancer whose disease has progressed following immunotherapy, and MM-151, an early stage oligoclonal therapeutic consisting of three fully human monoclonal antibodies designed to bind and inhibit signaling of the epidermal growth factor receptor, which is completing a phase I study in patients with solid tumors.

Additionally, the company is evaluating MM-141 as a follow-on prospect to treat metastatic pancreatic cancer. The monoclonal antibody acts as a tetravalent inhibitor of PI3K/AKT/mTOR, a pro-survival pathway used by tumor cells as a resistance mechanism to anticancer therapies. Merrimack is conducting a phase II trial evaluating MM-141 in combination with nab-paclitaxel and gemcitabine in front-line metastatic pancreatic cancer. The company is prospectively enrolling only patients with a pre-identified IGF-1 high biomarker profile.

Merrimack completed its IPO in 2012, pricing at $7 and raising $100.2 million during a bleak year for biopharma in the U.S. public market, which saw only 11 IPOs get out the door. The company's shares hit a high-water mark of $13.84 on April 27, 2015. A year ago, shares were trading above $8. (See BioWorld Today, March 30, 2012.)