Array BioPharma, Inc. (ARRY) and Loxo Oncology, Inc recently announced a license and collaboration agreement. The agreement involves a multi-year licensing and collaboration deal for a preclinical development candidate (discovered by Array) and related intellectual property. Loxo and Array will also collaborate for the discovery and development of small molecule drugs targeting novel oncology indications.
Array's preclinical research activities under the deal will be funded by Loxo. Loxo will select targets and carry out studies. The agreement makes Array eligible for milestone payments up to $434 million as well as royalties on sales of any drugs developed and commercialized under this deal. Array also received shares in Loxo.
This deal is in line with Array's strategy of focusing on oncology. Array has entered into several collaborations with big companies and amassed a total of $577.9 million in research funding and up-front and milestone payments from collaboration partners from inception till Jun 30, 2012.
The company has also been quite active in collaboration activities this year. In May 2013, Array entered into a collaboration agreement with Oncothyreon Inc. (ONTY) to develop and commercialize ARRY-380, which is being developed for the treatment of breast cancer. According to the agreement, Array will receive an upfront fee of $10 million on the initiation of the collaboration. Similar to the collaboration with Loxo, this agreement also includes the funding of clinical development by Oncothyreon.
Array is focused mainly on the development and commercialization of targeted small molecule drugs for the treatment of cancer patients. We note that it has graduated into a late-stage development company with a few candidates approaching phase III by the end of 2013.
The company recently initiated a phase III study (MILO: n=300) on MEK162 in patients suffering from low-grade serous ovarian cancer (LGSOC). It consequently received a $5 million milestone payment ! from partner, Novartis AG (NVS), following the initiation of the study.
Currently, Array BioPharma carries a Zacks Rank #2 (Buy). However, biopharma stocks such as Jazz Pharmaceuticals Public Limited Company (JAZZ) look more attractive with a Zacks Rank #1 (Strong Buy).
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