Biotech Values

[mcbio]

ARRY - notes on 1Q11 CC

1. Selumetinib (fka AZD6244), the 1st gen MEK inhibitor partnered with AZN for cancer, is the most advanced MEK inhibitor in the clinic. ARRY is potentially due double-digit royalties depending on sales levels. There are two ongoing Phase 2 trials, one testing selumetinib plus DTIC vs. DTIC alone in 1st line melanoma patients with BRAF mutation and another testing selumetinib + Taxotere vs. Taxotere alone in 2nd line NSCLC patients with KRAS mutation, that will report data in 2011. This data is "potentially a big value-creating event for ARRY." This data could drive confidence not only in selumetinib but also in ARRY-162, the 2nd gen MEK inhibitor that was recently partnered with NVS.

2. ARRY-520, the KSP inhibitor for multiple myeloma - ARRY will report Phase 1 data for the single agent trial with 520 in MM patients in the first week in December (apparently some patients have been on 520 for 12 - 14 months). ARRY has seen "startling data" pre-clinically when combining 520 with Velcade in MM patients. ARRY is now initiating a Phase 1b combo trial of 520 and Velcade in MM patients.

3. A caller asked during Q&A how a KSP inhibitor such as 520 works to enhance Velcade. Kevin Koch said ARRY has done extensive work looking at survival factors and which tumors depend on which survival factors. It is believed that MCL1 is important in MM patients. Proteasome inhibitors (like Velcade) regulate the half-life of certain survival factors. 520 is highly dependent on the ratio of MCL1 and other proteins that stabilize its activity and existence. Since Velcade controls the half-life of some survival proteins, the combo of 520 and Velcade is highly productive (at least in the pre-clinic so far).

4. Clinical strategy for 520: An increasing number of patients are failing Velcade and Revlimid. The numbers are "kind of piling up" according to Kevin Koch. ARRY intends to look at Velcade-refractory patients first and look to go after this patient population with a controlled trial.

5. Of its proprietary drugs, ARRY considers 520 as more of a key focus compared to its other drugs because it has the potential for significant near-term value creation with potential PoC data. (ARRY is in discussions with potential partners for the other drugs in the pipeline while also advancing some alone; I'm guessing 380 is the subject of partnering discussions given the potential but the large amount of resources that will be needed to advance the drug.)