Array Biopharma lands $685 million deal to develop cancer drug Print E-mail
By M.E.Garza   
Monday, 08 August 2011 15:51
Not everyone had bad news on Monday, although it wasn't until after the markets closed before some in healthcare experienced any traction.
After hours, Array BioPharma said it signed a deal worth up to $685 million with Genentech, a unit of Roche Holding AG , to develop cancer compounds, sending Array's shares to 2.23 up 0.18 (8.78%) in post-market trading.

Company officials said that Array will get an upfront payment of $28 million and will be eligible to receive clinical and milestone payments of up to $685 million and up to double-digit royalties on sales.

At the same time, the firm reported results for the fourth quarter and full year of fiscal 2011. It was during this fourth quarter that Array narrowed its proprietary development focus to four core clinical programs including two hematology drugs: ARRY-520 for multiple myeloma (MM) and ARRY-614 for myelodysplastic syndromes (MDS).  The re-newed focus as well as some insider buying caused us to take notice of the stock in late June. Shares climbed for a couple of sessions after we noted the bounce from previous bottoms, but they did not hold up. They had been trading higher again in recent days, but then market conditions pulled everyone down. 

It will be interesting to see how the market reacts to this partnership news going forward since all of  Array's core drugs are both novel therapies addressing significant unmet medical needs with large market opportunities. Array said it plans to advance their development both as single agents and in combinations.

Our FDA Trade Catalyst Calendar, which tracks thousands of companies in the healthcare/biotech space for trading opprotunities and upcoming regulatory milestones, shows more than a handful of upcoming catalysts, including some clinical trial results which could spur buying.  Recently. Array initiated new clinical trials for two proprietary anti-inflammatory drugs: ARRY-797 for pain and ARRY-502 for asthma. ARRY-797 is being tested in a 150-patient Phase 2 chronic pain trial in osteoarthritis (OA) patients with top-line results expected in the first quarter of calendar 2012. ARRY-502 is completing a Phase 1 multiple ascending dose trial which Array plans to follow with a 28-day Phase 2 trial in patients with persistent asthma.

In addition, Array has 11 partnered programs consisting of 14 drugs in clinical development, which are currently funded by Array’s partners. During the past 24 months, Array has raised $160 million of non-dilutive financing from up-front payments on new partnerships with Amgen, Novartis and Genentech, and milestones from existing partnerships. The most advanced partnered programs are Array’s two MEK inhibitors: selumetinib with AstraZeneca and MEK162 with Novartis. Array anticipates AstraZeneca reporting data on two Phase 2 combination trials in melanoma and non-small cell lung cancer in the coming months.

Array reported revenue of $19.0 million for the fourth quarter of fiscal 2011, compared to revenue of $18.0 million for the same period in fiscal 2010. The Company recorded expenses of $19.3 million on proprietary research and development for the quarter to advance its clinical development and discovery programs, compared to $16.5 million during the same period last year. Array reported a net loss of $21.8 million, or ($0.38) per share, for the fourth quarter, compared to a net loss of $15.8 million, or ($0.30) per share, for the same period last year.

Here is a snapshot of some of the other market movers in healthcare for Monday, August 8, 2011-- the same day in which the Dow Jones industrials fell 634.76 points. The day marked the sixth worst point decline for the Dow in the last 112 years and the worst one-day drop since December 2008. Every stock in the Standard & Poor's 500 index declined Monday.

Gainers (% price change) Last Trade Change Mkt Cap
ZIOPHARM Oncology Inc. ZIOP 5.09 +0.39 (8.30%) 348.17M
Medicis Pharmaceutical MRX 33.63 +1.54 (4.80%) 2.08B
Chindex Intl., Inc. CHDX 8.40 +0.25 (3.07%) 138.48M
Stereotaxis, Inc. STXS 2.85 +0.08 (2.89%) 157.71M
LeMaitre Vascular, Inc. LMAT 6.68 +0.16 (2.45%) 103.30M

Losers (% price change)
ZOLL Medical Corporation ZOLL 44.46 -16.47 (-27.03%) 974.31M
Hansen Medical, Inc. HNSN 2.68 -0.68 (-20.24%) 146.19M
Delcath Systems, Inc. DCTH 3.09 -0.66 (-17.60%) 133.35M
Dendreon Corporation DNDN 10.37 -2.19 (-17.44%) 1.54B
Exactech, Inc. EXAC 14.07 -2.87 (-16.94%) 184.03M

Most Actives (dollar volume)
Pfizer Inc. PFE 16.66 -0.83 (-4.75%) 131.63B
Johnson & Johnson JNJ 61.12 -1.59 (-2.54%) 167.54B
Merck & Co., Inc. MRK 29.94 -1.77 (-5.58%) 92.41B
Abbott Laboratories ABT 48.06 -2.17 (-4.32%) 74.81B
Bristol Myers Squibb Co. BMY 26.38 -1.05 (-3.83%) 45.00B

Disclosure: None

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