The pending $16 billion deal that would see GlaxoSmithKline sell its cancer drugs to Novartis continues to pay dividends for an unlikely beneficiary—Boulder, CO-based Array BioPharma.
Array (NASDAQ: ARRY) announced Friday that it has reached a definitive agreement with Novartis to acquire worldwide rights to encorafenib, a drug candidate to treat melanoma and colorectal cancer. The drug is in Phase 3 clinical testing. According to a release, Array only owes Novartis “a de minimis payment,” and the Swiss pharmaceutical giant will pick up much of the bill to continue the 11 clinical trials that are underway.
The deal is contingent on the blockbuster deal between GlaxoSmithKline and Novartis being approved by regulators. Array said the European Commission is expected to make a decision about the deal on Jan. 28.
This is the second deal between Novartis and Array that has resulted from Novartis’s need to shed cancer drug candidates it had been developing, following the GSK deal. In December, Array and Novartis terminated their agreement to jointly develop binimetinib, a drug candidate initially developed by Array to treat melanoma and ovarian cancer.
Array CEO Ron Squarer called that deal “potentially transformative” for Array, and its terms look highly favorable for his company. It came with an upfront payment of as much as $85 million from Novartis, which also agreed to fund planned and ongoing studies of binimetinib. That includes three Phase 3 pivotal trials that are underway and more than 20 Phase 1 or 2 exploratory studies and investigator-sponsored trials.
Encorafenib is a small molecule drug (a BRAF inhibitor) that could treat melanoma, colorectal, and thyroid cancers. The drug is taken orally, and could potentially be used alongside binimetinib, which has a different mechanism (it’s a MEK inhibitor).
“With rights to both encorafenib and binimetinib, Array would enhance its position to broadly develop and commercialize each product, as well as this MEK/BRAF combination, which may have differentiating advantages when compared to available therapies,” Squarer said in the release.
As part of the latest deal, European regulators are requiring Array to obtain an experienced partner for global development and European commercialization of both binimetinib and encorafenib.