Merrimack Pharmaceuticals Inc. (NASDAQ: MACK) has announced that it will be discontinuing one of its cancer drugs, as well as conducting layoffs. Specifically, the firm is discontinuing MM-310 for the treatment of solid tumors. Shares dipped early Friday on the news.

This decision was the result of a comprehensive review of available safety data from its Phase 1 study. Based on emerging data since the recent amendment of the clinical protocol, the company has concluded that the study would not be able to reach an optimal therapeutic index for MM-310.

Merrimack has terminated the study and expects to initiate a workforce reduction as it closes out clinical activities, reflective of its narrowed preclinical pipeline and in line with prior cost-cutting measures.

Richard Peters, M.D., Ph.D., president and CEO of Merrimack, commented:

Due to our ongoing exploration of strategic alternatives and given these unfortunate challenges in identifying a clinically meaningful safety profile for MM-310, we have decided to halt further development of the program. Additionally, as we have narrowed the scope of our pipeline to our two most promising preclinical programs, MM-401 and MM-201, we are initiating steps to close out remaining clinical activities in order to further preserve our resources. We continue to prudently advance these programs as we work expeditiously to bring our ongoing strategic process to conclusion.

The firm plans to work swiftly to close out clinical activities and carry out associated cost-cutting measures and expects to provide an update on these efforts with its first-quarter 2019 financial results.

Shares of Merrimack closed Thursday at $7.18, in a 52-week range of $3.34 to $10.53. The consensus price target is $4.00. Following the announcement, the stock was down over 15% at $6.05 in early trading indications Friday.

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