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Array BioPharma Inc released its financial results for the third quarter of fiscal 2010, reporting $18.4 million in total revenue for the period but a net loss of $15.2 million, or $0.30 per share. The numbers are an improvement over the third quarter of fiscal year 2009, when Array posted revenue of $6.0 million and had a net loss of $29.6 million, or $0.62 per share. At the close of the third quarter, Array had $100.3 million in cash, cash equivalents, and marketable securities, a figure that excludes the $45 million Array will receive during the fourth quarter from its recent partnership with Novartis International AG.
The agreement licensed Array’s cancer drug ARRY-162, along with similar drugs, to Novartis for a potential $467 million in payments and royalties. News of the partnership initially caused Array shares to spike 35%; however, the increase retreated after Swiss bank UBS downgraded Array’s stock from a rating of “Buy” to “Neutral.” UBS based its assessment on the early development stage of most of Array’s pipeline and Array’s deals with Novartis and Amgen (ARRY-403 for type 2 diabetes) limiting the company’s need for additional partnerships.
Robert E. Conway, CEO of Array, disagrees with UBS’ value assessment. “Based on our current assumptions, our analysis of the estimated risk-adjusted net present value of [the] potential income from our partnered drugs alone significantly exceeds the current market capitalization of the company,” he said. He pointed out that the recent deals with Novartis and Amgen would “provide Array with $105 million in initial payments, over $1 billion in potential milestone payments, double-digit royalties, and commercial co-detailing rights.” In addition to the substantial benefit Array derives from its multiple partnerships, Conway noted that the company’s primary asset is its proprietary pipeline, which has numerous compounds owned 100% by Array.
Array’s oncology pipeline includes inhibitors of HER2, EGFR, KSP, p38, and Tie-2. Eight abstracts disclosing data from studies of several of these anticancer drugs were presented at the American Association for Cancer Research 101st Annual Meeting, held from April 17 to 21, 2010, in Washington, DC.
Array is working with Novartis to develop MEK162 (ARRY-162) and MEK300 (ARRY-300), and other MEK inhibitors. With the maximum tolerated dose of MEK162 now established, Array is proceeding with expansion of a phase I trial in patients with biliary tract cancer, which is taking place at 10 trial locations in North America. The expansion study will be evaluating the pharmacokinetics and pharmacodynamics of the drug, along with tolerability. Array hopes MEK162 will prove successful in multiple indications.
ARRY-520, a kinesin spindle protein inhibitor, is in phase I trials in patients with solid tumors and in phase I/II trials for patients with acute myeloid leukemia and multiple myeloma. Array hopes to complete these trials in the current fiscal year. In a proof-of-concept study, investigators are evaluating the activity and safety of the p38/Tie-2 inhibitor ARRY-614 in a phase Ib/II trial of patients with myelodysplastic syndromes.
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