Array Technologies Inc (ARRY)

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Amgen, Inc, Celgene Corporation Can Find Array Biopharma Inc Attractive
Array Biopharma can be a strategic takeover target for cancer-focused biotech companies

By Aliya Kaleem on Dec 21, 2015 at 11:52 am Est

Array Biopharma Inc (NASDAQ:ARRY) is a small biopharmaceutical company worth just over $630 million, currently involved in research and development of cancer-based treatments.The drug-maker shot over 20% in trade on Wednesday after reporting positive Phase 3 trial data of its lead cancer drug candidate, binimetinib, in patients suffering from a particularly fatal type of cancer. Array Biopharma now plans to file the drug for approval by the first half of next year.

The company has at least three other cancer products in mid-to-late stage testing. Cancer expenditure touched the $100 billion mark last year, and IMS Health expects it to reach $147 billion by 2018. Average prices of new cancer medications are crossing $100,000 per year, making the disease area a particularly lucrative market for drug-makers. Array Biopharma’s latest trial success, hence, makes it a very attractive takeover target for cancer-focused giants like Amgen, Inc. and Celgene Corporation.

The MEK inhibitor Binimetinib was tested among 402 people suffering from advanced NRAS-mutant melanoma, a deadly type of skin cancer. The group receiving the drug demonstrated progression-free survival (PFS) rate of 2.8 months, against 1.5 months for those currently taking dacarbazine treatment. The company estimates 74,000 new cases of melanoma and 10,000 deaths from the disease this year. Of these the NRAS-mutant disease type represents 15-20% and has no approved therapies in market. Additionally, binimetinib is in Phase 3 trials for BRAF-mutant melanoma – the most common type (40-60%) of skin cancer- and in low-grade serous ovarian cancer (LGSOC). Ovarian cancer is the fifth leading cause of cancer death among women worldwide, and the serous type represents the largest group. LGSOC accounts for up to 10% of these cases. Additionally, binimetinib is also being tested in early-stage trials for several other cancer types.

Another key drug in Array Biopharma’s pipeline, encorafenib, is currently in Phase 3 testing for the treatment of BRAF 600 mutant melanoma. Another MEK-inhibitor Selumetinib is in late-stage testing for the most common type of non-small cell lung cancer, KRAS-mutant, affecting approximately 415,000 patients worldwide. The drug is also in Phase 3 trials for thyroid cancer, and is being developed in partnership with AstraZeneca plc (ADR) (NYSE:AZN). Another important drug candidate of Array Biopharma is filanesib, currently in mid-stage trials for relapsed/refractory multiple myeloma, the second most common hematological malignancy.

Biotech giant Amgen, Inc. (NASDAQ:AMGN) is seeking out small, strategic acquisitions to fill the sales gap soon to be left by patent expiry of some of its key cancer blockbusters. Neupogen faced its first biosimilar in the US, Zarxio, this September. Its sales are now expected to fall 15% year-over-year to $987 million this year, with a decline continuing through 2019. The company’s top-selling med, Enbrel, which pulled in $4.50 billion in sales last year, also faces a biosimilar threat from Novartis. Another best-seller, Neulasta, which generated $4.60 billion in revenue last year, lost US patent protection this October, with European patent expiry expected in 2017. Epogen, a $2 billion-in-peak sales drug, is expected to begin its eventual sales decline this year. The drug lost its US patent protection back in 2013. Currently, the drug-maker seeks companies with mid-to-late stage products in pipeline that can help boost its pipelines.

Amgen has seven cancer/hematology products in Phase 3 testing, 4 in Phase 2 testing and 12 in early-stage trials. The company recently received FDA approval for a melanoma drug, Imlygic/T-Vex, a first-in-class genetically engineered cold sore virus. The drug will be sold at an average price of $65,000. Array Biopharma’s pipeline can provide a strategic boost to Amgen’s melanoma portfolio. Additionally, the giant’s cash flow-to-payable debt position makes an Array Biopharma-sized acquisition exceedingly affordable.



Celgene Corporation (NASDAQ:CELG) is another large biotech with seven oncology/ immunology products in its portfolio including Revlimid, Abraxane, Istodax, Pomalyst and Otezla. The company has a robust pipeline, with experimental products, CC-122 in lymphoma/myeloma, lustapatercept in MDS/beta-thalassemia and CC-90009 in acute myeloid Leukemia (AML), being the most significant. Array Biopharma can be a suitable fit to Celgene’s cancer pipeline, and the biotech giant has more than enough cash to finance the transaction.

http://www.bidnessetc.com/59758-amgen-celgene-can-find-array-biopharma-attractive/