Filing Details

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934*

 

 

Merrimack Pharmaceuticals, Inc.

(Name of Issuer)

Common Stock, $0.01 par value per share

(Title of Class of Securities)

590328209

(CUSIP Number)

Noah G Levy

Newtyn Management, LLC

60 East 42nd St, 9^th Floor

New York, NY 10165

(212) 446-2460

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

September 13, 2019

(Date of Event which Requires Filing of this Statement)

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-l(f) or 240.13d-l(g), check the following box.  ☒

 

 

Note Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

 

 

 

*	The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

1		NAMES OF REPORTING PERSONS   Newtyn Management, LLC
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)  ☒        (b)  ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS (SEE INSTRUCTIONS)   AF
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)   ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION   New York
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH				7		SOLE VOTING POWER   1,173,166
				8		SHARED VOTING POWER   0
				9		SOLE DISPOSITIVE POWER   1,173,166
				10		SHARED DISPOSITIVE POWER   0
11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   1,173,166
12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)   ☐
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   8.8%
14		TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)   IA

 

1

1		NAMES OF REPORTING PERSONS   Noah G. Levy
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)  ☒        (b)  ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS (SEE INSTRUCTIONS)   AF
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)   ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION   United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH				7		SOLE VOTING POWER   1,173,166
				8		SHARED VOTING POWER   0
				9		SOLE DISPOSITIVE POWER   1,173,166
				10		SHARED DISPOSITIVE POWER   0
11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   1,173,166
12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)   ☐
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   8.8%
14		TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)   IN, HC

 

2

1		NAMES OF REPORTING PERSONS   Newtyn Partners, LP
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)  ☒        (b)  ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS (SEE INSTRUCTIONS)   WC
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)   ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION   Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH				7		SOLE VOTING POWER   677,546
				8		SHARED VOTING POWER   0
				9		SOLE DISPOSITIVE POWER   677,546
				10		SHARED DISPOSITIVE POWER   0
11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   677,546
12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)   ☐
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   5.8%
14		TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)   PN

 

3

1		NAMES OF REPORTING PERSONS   Newtyn Capital Partners, LP
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)  ☒        (b)  ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS (SEE INSTRUCTIONS)   AF
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)   ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION   Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH				7		SOLE VOTING POWER   1,173,166
				8		SHARED VOTING POWER   0
				9		SOLE DISPOSITIVE POWER   1,173,166
				10		SHARED DISPOSITIVE POWER   0
11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   1,173,166
12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)   ☐
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   8.8%
14		TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)   PN

 

4

1		NAMES OF REPORTING PERSONS   Ledo Capital, LLC
2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)  ☒        (b)  ☐
3		SEC USE ONLY
4		SOURCE OF FUNDS (SEE INSTRUCTIONS)   AF
5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(D) OR 2(E)   ☐
6		CITIZENSHIP OR PLACE OF ORGANIZATION   New York
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH				7		SOLE VOTING POWER   1,173,166
				8		SHARED VOTING POWER   0
				9		SOLE DISPOSITIVE POWER   1,173,166
				10		SHARED DISPOSITIVE POWER   0
11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   1,173,166
12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)   ☐
13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)   8.8%
14		TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)   OO

 

5

Item 1.

Security and Issuer

This statement on Schedule 13D (the Schedule 13D) relates to the common stock, $0.01 par value per share (the Common Stock) of Merrimack Pharmaceuticals, Inc., a Delaware corporation (the Issuer). The principal executive office of the Issuer is located at One Broadway, 14th Floor, Cambridge, Massachusetts 02142.

 

Item 2.

Identity and Background

This Schedule 13D is being filed jointly and on behalf of the following persons:

(a) The term Reporting Persons collectively refers to:

 

Newtyn Management, LLC (Newtyn Management), a New York limited liability company;

 

Noah G. Levy, a citizen of the United States of America;

 

Newtyn Partners, LP (Newtyn Partners), a Delaware limited partnership;

 

Newtyn Capital Partners, LP (NCP), a Delaware limited partnership; and

 

Ledo Capital, LLC (Ledo), a New York limited liability company.

(b) The business address of each Reporting Person and Covered Person is 60 East 42nd Street, 9th Floor, New York, NY 10165.

(c) Newtyn Management is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC) and its principal business is acting as the investment manager to Newtyn Partners and Newtyn TE Partners, LP (each, a Fund and collectively with Mr. Levy and Newtyn Management, the Newtyn Parties). The Funds directly own the reported shares; however, only Newtyn Partners holds more than 5% of the Issuers Common Stock.

The principal occupation of Mr. Levy is acting as the Managing Member of Newtyn Management and Ledo and as the portfolio manager to the Funds.

The principal business of Newtyn Partners is investing in securities. NCP is the general partner of the Funds, and Ledo is the general partner of NCP.

(d) During the last five years, none of the Reporting Persons have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) During the last five years, none of the Reporting Persons have been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

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(f) The citizenship or place of organization for each of the Reporting Persons is set forth in Section 2(a) of this Schedule 13D and is incorporated herein by reference.

 

Item 3.

Source and Amount of Funds or Other Consideration

The Reporting Persons used working capital of the Funds to purchase the 1,173,166 shares of the Issuers Common Stock reported herein (the Shares) in open market transactions. The total purchase price for the Shares was approximately $5,311,744, including brokerage commissions, based on the average net purchase price per share of the Shares.

The Reporting Persons primarily effect purchases of securities through margin accounts maintained for them with brokers, which may extend margin credit as and when required to open or carry positions in their margin accounts, subject to applicable federal margin regulations, stock exchange rules and such firms credit policies. Positions in the Issuers securities may be held in margin accounts and may be pledged as collateral security for the repayment of debit balances in such accounts. Such margin accounts may from time to time have debit balances. In addition, since other securities may be held in such margin accounts, it may not be possible to determine the amounts, if any, of margin used to purchase shares of the Common Stock. To the extent required by Item 3 of Schedule 13D, the information set forth in Item 6 of this Schedule 13D is incorporated herein by reference.

 

Item 4.

Purpose of Transaction

The Reporting Persons purchased the Shares based on their belief that the Shares, when purchased, were undervalued and represented an attractive investment opportunity. The acquisitions of the Shares by the Reporting Persons were made in the ordinary course of business and were not made for the purpose of acquiring control of the Issuer.

Agreement in Principle

On September 13, 2019, after engaging in certain preliminary discussions with representatives of the Issuer, Mr. Levy and Eric D. Andersen, the managing member of Western Standard, LLC (Western Standard) and portfolio manager of Western Standard Partners, LP and Western Standard Partners QP, LP (collectively with Mr. Andersen and Western Standard, the Western Standard Parties), reached an agreement in principle with the Issuer in which (i) the Newtyn Parties and the Western Standard Parties agreed to vote their respective shares of Common Stock in support of the Issuers slate of nominees and proposals at the 2019 Annual Meeting of Stockholders of the Issuer (the Annual Meeting) and at each annual or special meeting of the Issuers stockholders, subject to certain conditions and exceptions; (ii) Mr. Levy and Mr. Andersen (each, a New Director) agreed to join the Issuers Board of Directors (the Board) as independent directors and join the Issuers slate of director nominees for election to the Board at the Annual Meeting; and (iii) the Issuer agreed to increase the size of the Board and appoint the New Directors to the Board, and to set the size of the Board at five (5) members effective as of the Annual Meeting and add the New Directors to its slate of nominees for election to the Board for a one-year term until the 2020 Annual Meeting of Stockholders.

 

7

Cooperation Agreement

On September 18, 2019, the Newtyn Parties and the Western Standard Parties (each such affiliated group, a Shareholder Party) entered into a cooperation agreement with the Issuer (the Cooperation Agreement), a copy of which is attached to this Schedule 13D as Exhibit 99.1 and is incorporated in its entirety into this Item 4. In the Cooperation Agreement, the parties set out the binding terms and provisions of the agreement in principle described above and agreed to certain other terms and provisions, including:

Replacement Director. Each Shareholder Party has the right to replace its designated New Director with another qualified independent director, subject to conditions described in the Cooperation Agreement, including that such replacement director be approved by the Boards nominating committee, and the designating Shareholder Party owns at least 2.5% of the Issuers then outstanding voting securities.

New Committee. The Board agreed to form a new committee (the Strategy and Expense Committee), which will consist of three (3) members, including the New Directors, to consider, among other matters, the Issuers current strategy and expenses and evaluate any requests for consideration or feedback, including from shareholders of the Issuer, with a focus on cost containment, continued NOL safeguarding and milestone payment, and shareholder distribution maximization.

Non-Disparagement. Each party agreed not to, directly or indirectly, in any capacity or manner communicate in a way that could reasonably be construed to be derogatory or critical of, or negative toward, the other parties or that maligns, harms, disparages, defames or damages the reputation or good name of the other parties.

Standstill. Each Shareholder Party agreed to comply, and cause its representatives to comply, with certain standstill obligations described in the Cooperation Agreement during its term, including, among others, (a) not to purchase Common Stock or any other securities of the Issuer and as a result become the holder of more than 20.0% of the Issuers then outstanding voting securities, and (b) not to sell Common Stock to a person that the Shareholder Party (i) knows has filed (or threatened to file) a proxy statement in opposition to the Issuers recommendations, nominees or proposals within a certain period of time prior the sale or (ii) has reasonable cause to believe intends to engage in a proxy campaign in opposition to the Issuers recommendations, nominees or proposals. The standstill obligations of the Shareholder Parties are subject to certain conditions and exceptions described in the Cooperation Agreement. Each Shareholder Party has agreed to the standstill restrictions from the date of the Cooperation Agreement until the termination of the Cooperation Agreement.

Termination. The Cooperation Agreement will be terminated as to a Shareholder Party upon the earliest to occur of (a) the Shareholder Party owns less than 2.5% of the Issuers then outstanding voting securities, (b) the New Director designated by the Shareholder Party is not re-nominated for election to the Board or is not re-elected at an annual meeting, (c) the Issuers breach of its obligations with respect to the Strategy and Expense Committee, and (d) the consummation of an Extraordinary Transaction (as defined in the Cooperation Agreement).

 

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The foregoing description of the Cooperation Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Cooperation Agreement. The Cooperation Agreement has been included to provide investors with information regarding their terms. It is not intended to provide any other factual information about the Reporting Persons, the Western Standard Parties, the Issuer or their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the Cooperation Agreement were made only for purposes thereof and as of specific dates, were solely for the benefit of the parties thereto, may be subject to limitations agreed upon by the parties, and may be subject to standards of materiality applicable to the parties that differ from those applicable to other investors in the Issuer. Investors in the Issuer are not third-party beneficiaries under the Cooperation Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Cooperation Agreement, which subsequent information may or may not be fully reflected in the Issuers public disclosures.

Other Plans or Proposals of the Reporting Persons

Subject to the terms and provisions of the Cooperation Agreement, the Reporting Persons may communicate with the Board, members of management and/or other stockholders from time to time with respect to operational, strategic, financial, governance, or other matters and otherwise work with management and the Board with a view to maximizing stockholder value. The Cooperation Agreement does not grant the Reporting Persons any additional or unique rights to communicate with the Board or the Issuer.

Prior to entering into the Cooperation Agreement, the Reporting Persons engaged in discussions with the Board and members of management regarding the possibility and potential benefits to the stockholders of the Issuer of various corporate actions and strategic opportunities. Mr. Levy as a New Director and member of the new Strategy and Expense Committee may further consider and evaluate the benefits of such actions and opportunities to the Issuer and its stockholders.

Subject to the terms and provisions of the Cooperation Agreement, the Reporting Persons may seek to acquire additional securities of the Issuer (which may include securities rights and securities exercisable or convertible into securities of Issuer), to dispose of all or a portion of the securities of the Issuer owned by them, or otherwise to engage in hedging or similar transactions with respect to securities of Issuer. In reaching any decision as to their course of action (as well as to the specific elements thereof), the Reporting Persons expect that they would take into consideration a variety of factors, including, but not limited to, the following: the Issuers business and prospects; other developments concerning the Issuer and its businesses generally; other business opportunities available to the Reporting Persons; developments with respect to the business of the Reporting Persons; changes in law and government regulations; general economic conditions; and money and stock market conditions, including the market price of the securities of the Issuer.

 

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Except as otherwise set forth in this Schedule 13D, none of the Reporting Persons have any present plans or proposals that relate to or would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D, although the Reporting Persons, at any time and from time to time, may review, reconsider and change their position and/or change their purpose and/or develop such plans and may seek to influence the Board or management of the Issuer with respect to the business and affairs of the Issuer and may from time to time consider pursuing or proposing such matters with advisors, the Issuer or other persons.

To the extent required by Item 4 of Schedule 13D, the information set forth in Item 6 of this Schedule 13D is incorporated herein by reference.

 

Item 5.

Interest in Securities of the Issuer

Group Status

As a result of their agreement to vote their respective shares of Common Stock to support the Issuers slate of director nominees and proposals in connection with the Annual Meeting as described in Item 4 and by entering into the Cooperation Agreement, the Reporting Persons may be deemed to have formed a group for purposes of Section 13(d)(1) of the Exchange Act and the rules promulgated thereunder with Mr. Andersen and Western Standard (collectively, the Western Standard Reporting Persons), each of whom as of the date of this Schedule 13D also beneficially owns more than 5% of the Issuers Common Stock. As members of a group, the Reporting Persons and the Western Standard Reporting Persons may be deemed to beneficially own the aggregate amount of the Common Stock that each of them beneficially owns. The Western Standard Reporting Persons have filed a Schedule 13D on the same date as this Schedule 13D (the Western Standard Schedule 13D), a copy of which is attached to this Schedule 13D as Exhibit 99.2, to report their ownership of, and transactions in, the Common Stock and the interactions and agreements of the Western Standard Reporting Persons with the Board, members of management and the Reporting Persons substantially as described in this Schedule 13D.

(a) & (b) The information relating to the beneficial ownership of Common Stock by each of the Reporting Persons set forth in Rows 7 through 13 of the cover pages hereto is incorporated by reference. The Reporting Persons are the beneficial owners of 1,173,166 shares of Common Stock. Such number of shares of Common Stock represent 8.8% of the shares of Common Stock outstanding based on 13,349,821 shares of Common Stock outstanding as of July 10, 2019, which number the Issuer reported in its Form 10-Q for the quarterly period ended June 30, 2019 filed with the U.S. Securities and Exchange Commission on July 17, 2019.

To the extent required as a result of the group status of the Reporting Persons and the Western Standard Reporting Persons, the information relating to the beneficial ownership of Common Stock by each of the Western Standard Reporting Persons set forth in Rows 7 through 13 of the cover pages thereof is incorporated by reference into this Item 5(a) and (b).

(c) Information with respect to all transactions in the securities which were effected during the past sixty days by each of the Reporting Persons is set forth on Schedule A annexed hereto and incorporated herein by reference.

 

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To the extent required as a result of the group status of the Reporting Persons and the Western Standard Reporting Persons, the information relating to the transactions in the securities which were effected during the past sixty days by each of the Western Standard Reporting Persons set forth on Schedule A of the Western Standard Schedule 13D is incorporated by reference into this Section 5(c).

 

(d)	Not applicable.

 

(e)	Not applicable.

 

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

To the extent required by this Item 6 of Schedule 13D, the information set forth in Items 4 and 5 of this Schedule 13D is incorporated herein by reference.

Pursuant to Rule 13d-1(k) promulgated under the Act, the Reporting Persons have entered into an agreement with respect to the joint filing of this Schedule 13D and any amendment or amendments thereto, a copy of which is attached here as Exhibit 99.3 and incorporated herein by reference.

Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer.

 

Item 7.

Material to be Filed as Exhibits

Exhibit 99.1: Cooperation Agreement of the Issuer, Newtyn Management and Western Standard, dated as of September 18, 2019 (filed herewith).

Exhibit 99.2: Schedule 13D of the Western Standard Reporting Persons, as filed with the SEC on September 19, 2019 (filed herewith).

Exhibit 99.3: Joint Filing Agreement of the Reporting Persons, dated as of September 19, 2019, among the Reporting Persons (filed herewith).

 

11

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: September 19, 2019.

 

 

12

SCHEDULE A

Transactions by the Reporting Persons in the securities of the Issuer during the preceding 60 days:

 

Fund		Trade Date		Number of Shares Bought (Sold)		Price Per Share (excluding Commission)
Newtyn Partners, LP		7/15/2019		(723)		5.62
Newtyn TE Partners, LP		7/15/2019		(527)		5.62
Newtyn Partners, LP		7/16/2019		(2,141)		5.65
Newtyn TE Partners, LP		7/16/2019		(1,563)		5.65
Newtyn Partners, LP		8/23/2019		(315)		7.01
Newtyn TE Partners, LP		8/23/2019		(231)		7.01
Newtyn Partners, LP		9/5/2019		(400)		7.02
Newtyn Partners, LP		9/11/2019		(888)		6.10