Overview
With the equity markets trading at near record valuations, we’ve been actively looking for mispriced idiosyncratic opportunities, with the hope to find equity -like returns without equity risk. We believe that Merrimack Pharmaceuticals is such an investment. If we are right on the science, it should deliver us up to 10x return over the coming years, which is entirely independent from equity valuations and future drug pricing.
The reason why biotechnology companies are very volatile are 3-fold:
- The market might take different views on a drug’s probability of success over time.
- The market might