Array BioPharma scores midstage success for asthma drug

Array BioPharma has another asset on deck for a potential partnership. The Boulder, CO-based drug developer has touted upbeat Phase II data for an experimental drug in patients with allergic asthma, and the company ($ARRY) plans to seek a partner to fund further studies of the oral CRTh2 antagonist.

The news jolted the company's shares in premarket trading, sending them up about 12.6% before the bell today.

The midstage results shed light on a potential new oral weapon in the large market for drugs against allergic asthma, which afflicts about 12 million patients in the U.S., with some of them in need of more treatment options to control their disease. Big Pharma outfits have dominated the major market for years, and late-stage studies of asthma therapies typically require thousands of patients and large investments from developers. Array, which already has a number of pharma partners such as Genentech and Novartis ($NVS) for its cancer programs, aims to tie up with another deep-pocketed partner to develop the potential asthma therapy called ARRY-502.

The company's 184-patient study showed that the oral med provided a statistically significant improvement in lung function over placebo, with fewer adverse events in the treatment camp versus those on placebo. Specifically, the Phase II study found a 3.9% improvement in the FEV1 test in those taking 200 mg of ARRY-502 twice a day versus placebo. A 6.8% improvement was found in patients with certain levels of the TH2 biomarker associated with allergic asthma.

"We are not surprised that shares are reacting well pre-market to this encouraging result given that this is a non-core asset that was not previously contributing much (if any) value to the story, in our view, and it's also one that's obviously targeting a very large indication," JPMorgan analyst Cory Kasimov said in a note to investors this morning.

A challenge for new asthma therapies is elbowing into a market with increasing competition from generic drugs. As The Associated Press noted, the U.S patent on Merck's ($MRK) hit asthma drug Singulair expired last year. Array's ARRY-502 is the first oral nonsteroidal therapy since Singulair to show key clinical improvements, according to the company's release.

Yet there are challenges ahead, not only in potential Phase III studies. Payers have been taking a tough stance on reimbursements for new therapies unless they show meaningful improvements over previous drugs.

- here's the release
- check out the AP article

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