Biotech Values

[mcbio]

ARRY - 2Q11 CC notes

1. Judging by management's tone, the biggest near-term focus for ARRY is clearly in their two MEK inhibitors (selumetinib partnered with AZN and MEK-162 partnered with NVS). Phase 2 melanoma and NSCLC data on selumetinib will be reported by AZN later this year. There will also be Phase 1 dose escalation and biliary tract cancer expansion results reported on MEK-162 later this year.

2. The key MEK patient population targets are as follows:
Colorectal KRAS mutation - 170,000 patients
Biliary tract - 90,000 patients
Lung KRAS mutation - 70,000 patients
Melanoma BRAF mutation - 15,000 patients

3. 50% of melanoma patients have BRAF mutation. MEK and BRAF inhibitors have activity here. The Plexxicon BRAF inhibitor has gotten a lot of buzz but it was noted that a MEK inhibitor may have utility in patients that are resistant to a BRAF inhibitor. A MEK inhibitor may also have utility when combined with a BRAF inhibitor or otherwise in combo with DTIC.

4. MEK drugs are believed to be active in KRAS mutation patient populations. KRAS mutations are apparently present in 40% of colorectal cancer patients and 20% of NSCLC patients.

5. ARRY sees the greatest excitement in the industry in MEK + chemo in KRAS mutation patient population or MEK in combo with targeted agents in the AKT/PI3K/mTOR family. (AZN is focused on the former approach with selumetinib whereas NVS/ARRY jointly are focused on the latter approach as NVS already has a number of its own drugs in the PI3K/mTOR pathway.)

6. Regarding the Phase 2 trial for selumetinib in NSCLC, ARRY is hoping the trial will show the drug to be stat sig for the secondary endpoint of PFS but the trial is not powered to detect stat sig for OS.

7. Aside from the two MEK inhibitors, ARRY identified ARRY-520 and ARRY-403 (the glucokinase activator partnered with AMGN) as two additional key programs for the company. ARRY believes that AMGN will move 403 into Phase 2 later this year. ARRY does not plan to partner 520 in the near-term but will instead develop the drug further.

8. Regarding the rest of the pipeline, there was no specific guidance set forth for calendar 2011 for partnering. With respect to ARRY-380 (the HER2 inhibitor), ARRY said they expect to complete the Phase 1 expansion cohort in breast cancer patients but apparently will only move the drug forward into expensive randomized Phase 2 trials if a partner is involved. Given that there wasn't a lot of buzz about any near-term partner for the drug (perhaps due to the expense of these trials) and the fact that 380 wasn't identified as one of the key focus programs for the company, I think I have to temper my expectations for the drug even though it appears to be a very novel project.