Oncothyreon is going it alone with Array's former breast cancer contender

Moving on from the slow demise of its Merck KGaA-partnered cancer vaccine, Seattle's Oncothyreon ($ONTY) has bought out co-developer Array BioPharma ($ARRY), acquiring exclusive rights to the pair's early-stage breast cancer candidate.

Under the deal, Oncothyreon will pay Array $20 million up front for ONT-380, promising "a significant portion" of any sublicensing revenue and another $280 million in milestone payments if it gets acquired in the next three years. Array is also in line for a double-digit royalty on future sales of the drug.

In exchange, Oncothyreon gets the sole rights to an oral HER2 inhibitor that "demonstrated an acceptable safety profile" in Phase I and has shown tumor-killing promise in preclinical studies, the company said. ONT-380 is in the midst of two Phase Ib trials in combination with other agents in heavily pretreated breast cancer patients, and, in preliminary results unveiled Friday, the drug showed early signs of efficacy.

Oncothyreon is working to expand its pipeline after Merck KGaA finally called it quits on tecemotide, a cancer vaccine plagued by repeat clinical failures that dragged the biotech's shares down for years. The company's only other clinical asset is ONT-10, another cancer vaccine candidate targeting the MUC1 pathway.

Array is handing over ONT-380 just as it regains binimetinib, a cancer treatment formerly licensed to Novartis ($NVS). Through its blockbuster deal with GlaxoSmithKline ($GSK), Novartis is getting getting the MEK-inhibiting Mekinist, which makes binimetinib a pipeline redundancy. So the Swiss drugmaker is returning the drug to its partner, but Novartis is still on the hook to fund three late-stage studies and develop a companion diagnostic, news that sent Array's shares up more than 20% last week.

- read the statement