Biotech Values

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>> If this is just a straight up commercial decision by NVS not to develop a "second" MEK, then this could be a great opportunity for ARRY. They will have full rights to a drug with financial support through 3 P3s and numerous expansion P2s. They can either keep the entire drug or re-partner on better terms (likely a decent chunk of cash up front along with US 50% profit split and 15+% royalty ex US).

NVS likely has to return MEK162 because of both anti-trust issue and non-competitive provision in the partnership agreement with ARRY.

>> On the other hand, one always must assume a decision to return a drug is at least partly based on data we do not see.

Unlikely in this case. Due to generic Gleevec, NVS paid a LOT for GSK's oncology portfolio for immediate revenues rather than waiting for its own BRAF and MEK162.