Merrimack plans $75 million seven-year convertibles to yield 4.25%-4.75%, up 22.5%-27.5%

By Rebecca Melvin

New York, July 10 - Merrimack Pharmaceuticals Inc. planned to price $75 million of seven-year convertible senior notes after the market close Thursday to yield 4.25% to 4.75% with an initial conversion premium of 22.5% to 27.5%, according to market sources.

The registered, off-the-shelf deal has a greenshoe of $11.25 million and was being priced by joint bookrunners J.P. Morgan Securities LLC and BofA Merrill Lynch. Cowen & Co. LLC is acting as co-manager of the notes offering.

The bonds are non-callable for life with no puts. There is takeover and dividend protection.

Merrimack is also pricing $50 million of common stock with a $7.5 million greenshoe.

Proceeds from both offerings will be used to fund research and clinical development and seek marketing approval for MM-398 for the treatment of metastatic pancreatic cancer.

The Cambridge, Mass.-based biopharmaceutical company is focused on cancer treatments.

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