[Updated 11:02 a.m. See below.] Array BioPharma touted data less than a month ago that could shift the treatment landscape for some patients with metastatic colorectal cancer. The data caught the eye of Pfizer, which just agreed this morning to buy the Boulder, CO, cancer drug maker for $11.4 billion.
Pfizer (NYSE: PFE) will pay $48 per share for Array (NASDAQ: ARRY), getting its hands on a group of targeted cancer drugs. The price represents a roughly 60 percent premium to Array’s $29.59 per share closing price on Friday. The boards of both companies have approved the deal.
Array sells two cancer drugs, encorafenib (Braftovi) and binimetinib (Mektovi), which the FDA approved last June as a combination therapy for melanoma patients whose tumors carry specific genetic mutations. Array is testing both drugs—known as BRAF and MEK inhibitors, respectively—in a variety of different solid tumors.
Array also has developed other experimental targeted cancer drugs that it has either licensed to or partnered with other firms. Among them: larotrectinib (Vitrakvi) and Loxo-292, which were both being developed by Loxo Oncology before Eli Lilly (NYSE: LLY) bought the firm for $8 billion; selumetinib, now owned by AstraZeneca (NYSE: AZN); tucatinib (Seattle Genetics); ipatasertib (Genentech), and more. Many of those drugs are in late-stage testing. Pfizer noted in a statement that these drugs could bring back “significant royalties” over time.
[Paragraph added with details from the conference call.] Mikael Dolsten, Pfizer’s chief scientific officer, told analysts that Array has a “highly productive research engine” that has led to 17 total programs partnered with other companies. He added that Array has the capability to bring one new drug candidate to human testing each year for the foreseeable future, “possibly starting in 2019,” he said.
Primarily, however, Pfizer’s acquisition of Array is a bet on the future of the Braftovi-Mektovi combo. In the statement, it said the Braftovi-Mektovi regimen has “significant potential for long term growth” if it can work in other cancers. The drugs generated $71.8 million in revenue for Array over the first nine months of fiscal 2019.
Among those potential uses is colorectal cancer, the third most common cancer type in the US. About 15 percent of colorectal tumors have a BRAF mutation, and Array’s drugs have shown potential in treating them. In May, Array posted the latest results from a Phase 3 study called BEACON. In the trial, Braftovi and Mektovi, when combined with the Eli Lilly drug cetuximab (Erbitux) beat Erbitux and chemo head to head in BRAF-positive colorectal cancer patients who had failed one or two treatments. The Array combo reduced patients’ risk of death by 48 percent compared to the Erbitux/chemo regimen.
The study was particularly noteworthy because the combo of drugs didn’t include chemotherapy, which would be a first for BRAF-positive colorectal cancer patients. Array plans to file for approval in colorectal cancer later this year, and is testing the same regimen in patients with newly diagnosed metastatic disease as well. The deal “sets the stage to create a potentially industry-leading franchise for colorectal cancer” for Pfizer, CEO Albert Bourla said in a prepared statement.
[Paragraph added with details from the conference call.] Dolsten said that Array intends to submit the BEACON data for FDA review later this year. Pfizer plans to maintain Array’s current structure. The company will operate as a standalone unit working alongside the pharma giant’s other oncology research hubs. The deal is expected to close in the second half of 2019.
Both Braftovi and Mektovi were once in the hands of Swiss pharma giant Novartis (NYSE: NVS). The Swiss firm shed Braftovi when it bought a group of cancer drugs from GlaxoSmithKline in 2015. A year earlier, Novartis ended an alliance with Array to co-develop Mektovi.
Pfizer will hold a conference call this morning to discuss the deal.
Frank Vinluan contributed to this report.