Merrimack Pharmaceuticals Extends Section 382 Net Operating Loss Rights Plan

Merrimack Pharmaceuticals, Inc. (Nasdaq: MACK) (the “Company” or “Merrimack”), announced today that its Board of Directors (the “Board”) has extended the Section 382 net operating loss rights plan (the “Plan”) that was adopted in 2019. The Plan is designed to protect the Company’s ability to use its valuable net operating loss (“NOL”) carryforwards and certain other valuable tax attributes.

“Preservation of our NOL carryforwards is a key element of our strategic plan and may be used to reduce potential corporate tax payments which would otherwise arise if the Company receives potential future milestone payments. Any use of these NOL carryforwards would allow the Company to increase the amount of any future distributions to shareholders,” said Gary Crocker, CEO of the Company. “This extension of the plan that has been in place since 2019 is intended to reduce the risk that Merrimack’s existing NOL carryforwards or other tax attributes become limited under Section 382 of the Internal Revenue Code.”

The extension is effective through December 2, 2025 but would terminate at the time of the Company’s 2023 annual meeting if the extension is not approved by the Company’s shareholders at that annual meeting.

Details of the extension agreement will be contained in a Current Report on Form 8-K that the Company will file with the Securities and Exchange Commission.

About Merrimack Pharmaceuticals, Inc.

Merrimack Pharmaceuticals, Inc. is a biopharmaceutical company based in Cambridge, Massachusetts that is entitled to receive up to $450.0 million in contingent milestone payments related to its sale of ONIVYDE to Ipsen S.A. in April 2017. These milestone payments would be payable by Ipsen upon approval by the U.S. Food and Drug Administration (“FDA”) of ONIVYDE for certain additional clinical indications. ONIVYDE is already approved by the FDA in combination with fluorouracil (5-FU) and leucovorin (LV) for the treatment of patients with metastatic adenocarcinoma of the pancreas after disease progression following gemcitabine-based therapy. This existing approval is unrelated to any future potential milestone payments. Merrimack’s agreement with Ipsen does not require Ipsen to provide Merrimack with any information on the progress of ONIVYDE clinical trials that is not publicly available. Merrimack is also entitled to receive up to $54.5 million in contingent milestone payments related to its sale of anti-HER3 programs to Elevation Oncology (formerly 14ner Oncology, Inc.) in July 2019.