Oncothyreon and Array BioPharma announced today that they have updated their development agreement around a breast cancer drug invented by Array.
Oncothyreon, based in Seattle, will pay Boulder, CO-based Array (NASDAQ: ARRY) a $20 million upfront fee and take full responsibility for the development and commercialization of the drug, known as ONT-380. If it manages to get the drug to market, Oncothyreon will pay double-digit royalty payments.
The deal gives Oncothyreon much more control of ONT-380, a small molecule selective inhibitor of HER2, a growth factor receptor that is over-expressed in multiple cancers, including breast, ovarian, and stomach cancer. Genentech’s trastuzumab (Herceptin) was the first drug to attack cancer cells through the HER2 receptor. The FDA approved it for metastatic breast cancer in 1998.
Herceptin is administered intravenously; ONT-380 is taken as a pill. Currently, Oncothyreon is conducting two Phase-1b dose escalation trials of ONT-380, and The Dana-Farber Cancer Institute in Boston is conducting a separate Phase 1 dose escalation trial.
Under the original version of the deal signed in 2013, Array would have been responsible for worldwide commercialization, and Oncothyreon had a 50 percent co-promotion right in the U.S. The companies would have split the profit evenly.
But Array now has other clinical priorities. On Dec. 3, Array announced it had regained from Novartis worldwide rights to binimetinib, a drug in Phase 3 pivotal trials that could treat melanoma and ovarian cancer. Terms of the deal were favorable to Array, with Novartis agreeing to pay up to $85 million up front and to continue funding studies of binimetinib.
Array CEO Ron Squarer called the deal “potentially transformative” for the company, and investors have boosted the price of Array’s shares about 25 percent since the announcement. Shares traded around $4.90 Friday and showed little change following the latest news.
The companies agreed to split because Novartis (NYSE: NVS) is acquiring similar drugs as the result of its $16 billion purchase of GlaxoSmithKline’s portfolio of cancer drugs.
Should Oncothyreon (NASDAQ: ONTY) sublicense ONT-380, Array will get a “significant portion” of the payments, the companies said in a statement, and it will be eligible for up to $280 million in commercial milestone payments if Oncothyreon is acquired within three years.