MERRIMACK PHARMACEUTICALS, INC. (NASDAQ:MACK) Files An 8-K Termination of a Material Definitive Agreement

Item1.02: Termination of a Material Definitive Agreement

On March27, 2017, in connection with the closing of the
transaction contemplated by the Asset Sale Agreement (as defined
and described below), Merrimack Pharmaceuticals, Inc. (the
Company) provided notice to U.S. Bank National Association
as trustee (the Trustee) under the Indenture dated as of
December22, 2015 (the Indenture), of its election to
conditionally redeem all of the $175,000,000 outstanding
aggregate principal amount of its 11.5% senior secured notes due
2022 (the Secured Notes) issued under the Indenture. The
Secured Notes will be redeemed on April27, 2017 (the
Redemption Date) at a redemption price of 111.5% of the
principal amount thereof (the Redemption Price), plus
accrued and unpaid interest on the Secured Notes to, but
excluding, the Redemption Date.

On April3, 2017, the Company irrevocably deposited the aggregate
Redemption Price, plus accrued and unpaid interest, with the
Trustee and irrevocably instructed the Trustee to apply such
amount to the redemption in full of the Secured Notes on the
Redemption Date. The Indenture was satisfied and discharged on
April3, 2017.

A description of the material terms of the Indenture is set forth
in Item1.01 of the Current Report on Form 8-K filed with the
Securities and Exchange Commission (the SEC) by the
Company on December22, 2015, which description is incorporated
herein by reference.

Item2.01: Completion of Acquisition or Disposition of
Assets

On April3, 2017, the Company completed the previously announced
sale of the Companys right, title and interest in the non-cash
assets, equipment, inventory, contracts and intellectual property
primarily related to or used in the Companys business operations
and activities involving or relating to developing, manufacturing
and commercializing ONIVYDE and MM-436 (the Commercial
Business) to Ipsen S.A. (Ipsen). to the previously
disclosed Asset Purchase and Sale Agreement, dated as of
January7, 2017 (the Asset Sale Agreement), between the
Company and Ipsen, Ipsen paid the Company $575,000,000 in cash
(subject to a working capital adjustment as provided in the Asset
Sale Agreement) and assumed certain related liabilities. The
Company may be entitled to up to $450,000,000 in additional
payments based on the achievement by or on behalf of Ipsen of
certain milestone events if the FDA approves ONIVYDE for certain
indications as follows:

The Company used a portion of the net proceeds from the
transaction contemplated by the Asset Sale Agreement to redeem
the outstanding Secured Notes and satisfy and discharge the
Indenture, as described further in Item1.02 of this Current
Report on Form8-K. The Company intends to distribute $140million
of the proceeds to stockholders in the form of a special dividend
and invest $125million from the remaining net proceeds into its
refocused oncology pipeline, targeting the clinical development
of MM-121, MM-141 and MM-310. In connection with a lawsuit filed
by the trustee and certain holders of the 4.50% Convertible
Senior Notes due 2020, in the Court of Chancery in the State of
Delaware, captioned Wells Fargo Bank, National Association,
Wolverine Flagship Fund Trading Limited, Highbridge International
LLC, and Highbridge Tactical Credit Convertibles Master Fund,
L.P. v. Merrimack Pharmaceuticals, Inc. (the Delaware
Action), the Company has agreed to deposit $60 million in
proceeds from the Asset Sale into an escrow agreement within five
business days of the closing of the transaction. The funds will
remain in escrow for the duration of the Delaware Action in order
to provide security to the plaintiffs for their claims in the
Delaware Action. If the Delaware Action, which the Company
believes is without merit, is resolved favorably for the Company,
the Board of Directors intends to declare an additional special
dividend at the conclusion of the Delaware Action to return to
stockholders any remaining escrow funds, assuming that the
Company has sufficient surplus at such time to allow for the
declaration of this dividend.

In connection with the closing of the transaction contemplated by
the Asset Sale Agreement, on April3, 2017, the Company entered
into an IP License Agreement with Ipsen, to which Ipsen is
granting to the Company a perpetual, worldwide, non-exclusive,
royalty-free, fully paid-up license in and to all patents
included in the transferred intellectual property, other than
certain patents relating to generic liposomal technology, with
respect to which the license will be exclusive, in each case for
use outside of the Commercial Business. The Company is granting
to Ipsen a non-exclusive, royalty-free, fully paid up, perpetual,
irrevocable and worldwide license to all patents it owned at the
time of the closing of the transaction contemplated by the Asset
Sale Agreement for use in connection with the Commercial
Business.

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In connection with the closing of the transaction contemplated by
the Asset Sale Agreement, on April3, 2017, the Company entered
into a sublease with Ipsen, to which Ipsen is subleasing from the
Company a portion of the Companys leased space in Cambridge,
Massachusetts.

In connection with the closing of the transaction contemplated by
the Asset Sale Agreement, on April3, 2017, the Company entered
into a Transition Services Agreement with Ipsen, to which the
Company and Ipsen are providing certain services to each other
for a period of 24 months.

The foregoing description of the Asset Sale Agreement is not
complete and is subject to and qualified in its entirety by
reference to the Asset Sale Agreement filed as Exhibit 2.1 to the
Companys Current Report on Form 8-K filed with the SEC on
January9, 2017, and incorporated herein by reference. The
transaction was described in detail in the Companys Definitive
Proxy Statement on Schedule 14A filed with the SEC on February14,
2017, which description is incorporated herein by reference.

The Companys unaudited pro forma condensed consolidated financial
statements giving effect to the sale of the Commercial Business
are filed as Exhibit 99.1 hereto.

Item5.02: Departure of Directors or Principal Officers;
Election of Directors; Appointment of Principal Officers;
Compensatory Arrangements of Certain Officers

Principal Accounting Officer

On March31, 2017, the Board of Directors (the Board) of
the Company appointed Yasir B. Al-Wakeel, the Companys Chief
Financial Officer and Head of Corporate Development, to also be
Principal Accounting Officer and Treasurer. Dr.Al-Wakeel, age 35,
has served as the Companys Chief Financial Officer and Head of
Corporate Development since August 2015. Dr.Al-Wakeel previously
served in various capacities at Credit Suisse, an investment
banking firm, from January 2008 to June 2015. While at Credit
Suisse, Dr.Al-Wakeel was most recently a Director of Healthcare
Investment Banking focused on biotechnology and, prior to that
role, he was an Equity Research Analyst covering the
biotechnology and specialty pharmaceuticals sectors. Before
joining Credit Suisse, Dr.Al-Wakeel was a practicing physician,
holding both clinical and academic medical posts. Dr.Al-Wakeel
holds a BM BCh (Doctor of Medicine) from Oxford University, an
M.A. in theology from Cambridge University and a B.A. from
Cambridge University. William A. Sullivan previously served as
the Companys Principal Accounting Officer and Treasurer.

2016 Cash Bonus Awards

On March30, 2017, the Organization and Compensation Committee
(the Committee) of the Board approved 2016 annual cash
bonus awards for the Companys named executive officers to the
Companys annual cash bonus program, as set forth below:

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Separation Agreements

On April3, 2017, the Company entered into a Separation and
Release of Claims Agreement (the Separation Agreements)
with each of Peter N. Laivins, William M. McClements and Edward
J. Stewart. to the Separation Agreements, in connection with each
such individual resigning from his respective positions with the
Company as of April3, 2017, the Company agreed to:

The Separation Agreements also include a release of claims by
each such individual against the Company.

2017 Base Salary

On March30, 2017, the Committee approved an increase of Yasir B.
Al-Wakeels base salary to $407,000, retroactive to January1,
2017.

Retention Bonus

On March30, 2017, the Committee approved payment of a retention
bonus of $350,000 to Yasir B. Al-Wakeel, contingent upon the
closing of the asset sale, provided that (i)if Dr.Al-Wakeel
terminates his employment with the Company on or before
December31, 2017 without Good Reason (as defined in Dr.Al-Wakeels
Employment Agreement) or the Company terminates Dr.Al-Wakeels
employment on or before December31, 2017 for Cause (as defined in
Dr.Al-Wakeels Employment Agreement), Dr.Al-Wakeel will be
required to repay two-thirds of such amount, minus any applicable
taxes and withholding that Dr.Al-Wakeel was required to pay with
respect to such amount, within 60 days after his termination, and
(ii)if Dr.Al-Wakeel terminates his employment with the Company on
or after January1, 2018 but on or before June30, 2018 without
Good Reason or the Company terminates Dr.Al-Wakeels employment on
or after January1, 2018 but on or before June30, 2018 for Cause,
Dr.Al-Wakeel will be required to repay one-third of such amount,
minus any applicable taxes and withholding that Dr.Al-Wakeel was
required to pay with respect to such amount, within 60 days after
his termination. Dr.Al-Wakeel will not be required to repay any
portion of the retention bonus if he terminates his employment
with the Company at any time for Good Reason or if the Company
terminates his employment at any time without Cause.

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Item8.01 Other Events

On April3, 2017, the Company issued a press release announcing
the closing of the transaction contemplated by the Asset Sale
Agreement. A copy of the press release is attached as Exhibit
99.2 and is incorporated herein by reference.

Item9.01: Financial Statements and Exhibits

(d) Exhibits

Forward Looking Statements

This Form 8-K contains forward-looking statements of the Company
that involve substantial risks and uncertainties. All statements,
other than statements of historical facts, contained in this Form
8-K are forward-looking statements. Forward looking statements
can be identified by the use of the words anticipate, believe,
estimate, expect, intend, may, plan, predict, project, target,
potential, will, would, could, should, continue, and similar
expressions. The Companys forward looking statements include,
among others, statements about the proposed special dividend;
potential milestone payments; the Companys ability to fund its
operations, including continued investment in its research and
development pipeline; and the Companys plans to develop and
commercialize its clinical stage product candidates and
diagnostics. Actual events or results may differ materially from
those described in this Form 8-K due to a number of risks and
uncertainties. Risks and uncertainties include, among other
things, whether the Company receives payments related to the
milestone events under its contract with Shire or under the Asset
Sale Agreement; whether the Companys expenses are as predicted;
whether the Company is able to satisfy the necessary legal tests
required to make the anticipated dividend; negative effects of
the consummation of the transaction on the market price of the
Companys common stock; significant transaction costs; unknown
liabilities; other business effects, including the effects of
industry, market, economic, political or regulatory conditions;
and those risk factors discussed in the Companys Annual Report on
Form 10-K for the year ended December31, 2016 filed with the SEC
on March1, 2017, the Definitive Proxy Statement on Schedule 14A,
filed with the SEC on February14, 2017 and its other filings with
the SEC. The forward-looking statements in this Form 8-K
represent the Companys views as of the date of this Form 8-K. The
Company anticipates that subsequent events and developments will
cause its views to change. However, while it may elect to update
these forward-looking statements at some point in the future, it
has no current intention of doing so except to the extent
required by applicable law. You should, therefore, not rely on
these forward-looking statements as representing the Companys
views as of any date subsequent to the date of this Form 8-K.

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About MERRIMACK PHARMACEUTICALS, INC. (NASDAQ:MACK)

Merrimack Pharmaceuticals, Inc. is a biopharmaceutical company. The Company is engaged in discovering, developing and commercializing medicines consisting of therapeutics paired with companion diagnostics for the treatment of cancer. Its therapeutic oncology candidates in clinical development include MM-398, MM-302, MM-121, MM-141 and MM-151. Its ONIVYDE (irinotecan liposome injection), also known as MM-398, is an encapsulation of the marketed chemotherapy drug irinotecan in a liposomal formulation. MM-302 is an antibody drug conjugated liposomal doxorubicin that targets the ErbB2 (HER2) receptor. MM-121 is a fully human monoclonal antibody that targets Erb-B2 Receptor Tyrosine Kinase 3 (ErbB3). MM-141 is a fully human tetravalent bispecific antibody designed to block tumor survival signals by targeting receptor complexes. MM-151 is an oligoclonal therapeutic designed to bind to non-overlapping epitopes of EGFR (ErbB1).

MERRIMACK PHARMACEUTICALS, INC. (NASDAQ:MACK) Recent Trading Information

MERRIMACK PHARMACEUTICALS, INC. (NASDAQ:MACK) closed its last trading session down -0.11 at 3.13 with 2,799,800 shares trading hands.