Array shares crater as pain drug disappoints in PhII

Array BioPharma ($ARRY) touted its latest mid-stage study of a key pain drug as an unqualified success, beating a placebo and hitting its primary endpoint when tested in patients suffering from osteoarthritis. But when investors dug down into the release and found that its experimental med did no better than a standard treatment, its shares slid more than 11%.

ARRY-797 is an oral p38 inhibitor. There was a statistically superior reduction in pain over 28 days of treatment when compared to a sugar pill. But oxycodone ER, used as the active control in the study, did just as well. The oxycodone group, though, experienced a far higher washout rate due to adverse events--34%--compared to the experimental drug's 6% drop out rate.

"The study results with ARRY-797 showed promising benefit in the management of pain in osteoarthritis patients who are refractory to NSAIDS," said Alan Kivitz, M.D., founder of the Altoona Arthritis and Osteoporosis Center and an investigator on the study. "This study was designed with a high hurdle in mind, which this drug was able to overcome."

Investors clearly have a different idea about which hurdles the biotech needs to clear. While placebo comparisons may win approvals, insurers are more interested in the best bang for the buck. And when new meds fail to outperform old ones, sales suffer. Array shares have risen sharply over the last few months.

- here's the press release
- read the Reuters report

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