Merrimack Pharmaceuticals Inc (NASDAQ:MACK): Is Breakeven Near?

Merrimack Pharmaceuticals Inc’s (NASDAQ:MACK): Merrimack Pharmaceuticals, Inc., a clinical stage biopharmaceutical company, focuses on biomarker-defined cancers in the United States. With the latest financial year loss of -US$74.84m and a trailing-twelve month of -US$63.89m, the US$128.49m market-cap alleviates its loss by moving closer towards its target of breakeven. The most pressing concern for investors is MACK’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for MACK’s growth and when analysts expect the company to become profitable.

View out our latest analysis for Merrimack Pharmaceuticals

Expectation from Biotechs analysts is MACK is on the verge of breakeven. They anticipate the company to incur a final loss in -1, before generating positive profits of US$0 in . Therefore, MACK is expected to breakeven roughly a couple of months from now! In order to meet this breakeven date, I calculated the rate at which MACK must grow year-on-year. It turns out an average annual growth rate of -3.57% is expected,

NasdaqGM:MACK Past Future Earnings June 22nd 18
NasdaqGM:MACK Past Future Earnings June 22nd 18

I’m not going to go through company-specific developments for MACK given that this is a high-level summary, though, bear in mind that typically a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. So, periods of lower growth in the upcoming years is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one aspect worth mentioning. MACK currently has no debt on its balance sheet, which is rare for a loss-making biotech, which typically has high debt relative to its equity. MACK currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on MACK, so if you are interested in understanding the company at a deeper level, take a look at MACK’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should further examine:

  1. Historical Track Record: What has MACK’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Merrimack Pharmaceuticals’s board and the CEO’s back ground.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.