Party time at Array as Novartis bows out of PhIII binimetinib cancer program

Usually, when a biotech company loses a Big Pharma development partner, the executives wind up circling the wagons in a vain attempt to defend the value of their drug. But for Boulder, CO-based Array BioPharma ($ARRY) and its backers, Novartis' exit from its late-stage program for the MEK inhibitor binimetinib was a good occasion to throw a party.

Novartis ($NVS) is gaining an approved MEK inhibitor--Mekinist--in its big asset swap with GlaxoSmithKline ($GSK). And as a result, the pharma giant is handing back worldwide rights and walking away from a $467 million deal (after paying $60 million of that), gaining an upfront payment of up to $85 million and continued support for three ongoing pivotal studies: COLUMBUS, NEMO and MILO. Novartis remains on the hook to develop a companion diagnostic, continue its manufacturing responsibilities for 30 months and maintain steady access of two of its drugs--LEE011 (CDK 4/6 inhibitor) and BYL719 (α-PI3K inhibitor)--for clinical trials.

Array's shares shot up 23% in overnight trading as investors got a chance to signal their approval of a deal that continues to provide a rich level of development support while Array alone will benefit from any success.

Array CEO Ron Squarer

"Regaining full worldwide rights to binimetinib, an innovative late-stage oncology product, represents a tremendous opportunity for Array," said Array CEO Ron Squarer. "Binimetinib is currently advancing in three Phase III clinical trials and, we expect to file for our first regulatory approval during the first half of 2016. With this agreement, we are in a strong position to successfully develop and commercialize binimetinib to the benefit of cancer patients."

Back in the summer of 2013 Array lost its diabetes drug partner Amgen ($AMGN). But it has another partnership for the MEK inhibitor selumetinib with AstraZeneca ($AZN), a late-stage program for filanesib (ARRY-520) and a mid-stage program for ARRY-797 and oral inhibitor of the p38 mitogen activated protein kinase.

- here's the release