Post by Deleted on Aug 21, 2017 13:47:35 GMT
Array BioPharma: Making The Transition To Commercial-Stage
Aug. 21, 2017 7:31 AM ET -- Jonathan Faison
Summary
•Shares are trading flat year to date and the stock remains solidly in value territory, even in the absence of near-term drivers.
•Clinical trial collaborations with Merck and Bristol-Myers Squibb bode well for future development of binimetinib.
•Monetization of rights in Japan and Korea was merely the next step in management's successful plan to partner rights for territories outside the United States.
•Data to be presented at ESMO in September is an important catalyst, while the company's multi-asset pipeline should not be overlooked.
•Risks to thesis include disappointing data for pivotal and early stage trials, clinical and regulatory setbacks, competition from other approved BRAF/MEK inhibitors and dilution in the medium term.
Shares of Array BioPharma (ARRY) are trading flat year to date. However, shares have more than doubled over the past three years.
Earlier this year in March the company's withdrawal of their New Drug Application for binimetinib in NRAS-mutant melanoma came as a disappointment to investors, as the FDA apparently did not find the clinical benefit demonstrated in the pivotal NEMO study to be sufficient to support approval. While the unlucky change of events was obviously a negative development, shares appeared oversold as the withdrawal did not affect chances of the drug candidate finding success as a treatment for BRAF melanoma (a much larger setting).
As the year progressed other positive signs pointed to continued upside in shares. The firm announced a clinical trial collaboration with Merck (NYSE:MRK) to investigate the combination of binimetinib with anti-PD-1 treatment Keytruda in metastatic colorectal cancer patients with microsatellite stable tumors. This came as a result of preclinical data suggesting that immune activity of the latter could be enhanced when combined with a MEK inhibitor, with the hypothesis in this case to be tested with binimetinib. As if that weren't enough, Array announced another clinical research collaboration, this time with Bristol-Myers Squibb (NYSE:BMY), to investigate the combination of binimetinib with Opdivo (and Opdivo+Yervoy) as a potential treatment for metastatic colorectal cancer in patients with microsatellite stable tumors. Results from this phase 1/2 trial would be utilized to determine next steps for clinical development of the combinations, with the two companies jointly supporting the study.
Array was able to monetize rights in Japan and South Korea by licensing both of its late stage drug candidates to Ono Pharmaceutical in exchange for $31.6 million upfront and an additional $156 million in potential milestone payments (not to mention double-digit royalties).
While Array's July-inked deal with Amgen (AMGN) might not have brought in much cash, the agreement to discover and develop drugs for autoimmune disorders is another noteworthy partnering success that lends credibility to the name. Amgen will take care of clinical development, with upfront and milestone payments in addition to royalties on sales to be provided on any therapies that come as a result.
In early May Array released data from part 2 of its pivotal COLOMBUS study in patients with BRAF-mutant advanced, unresectable or metastatic melanoma. Median progression-free survival for patients treated with 45mg of binimetinib twice daily along with encorafenib 300mg was 12.9 months, which compared favorably to 9.2 months for patients treated solely with the latter drug. In July Array announced the submission of two New Drug Applications to the FDA to support use of the combination of binimetinib and encorafenib for the treatment of patients with BRAF-mutant advanced, unresectable or metastatic melanoma supported by strong data from the pivotal COLOMBUS trial. With treated patients experiencing significantly longer progression free survival compared to those receiving vemurafenib, management appears convinced the totality of the data provides a strong rationale for approval.
Final Thoughts
For the most recent quarter the company reported cash and equivalents of $235.1 million, compared to a fourth quarter net loss of $29.6 million. BEACON CRC phase 3 safety lead-in and COLUMBUS Phase 3 part 2 data to be presented at ESMO in September is an important near term catalyst.
While there may be an absence of near-term catalysts aside from ESMO data, considering the size of markets being targeted and management's partnering prowess, the stock appears to be trading in value territory. Consider that the global melanoma market for MEK/BRAF inhibitors is an opportunity in excess of $1 billion. Lastly, the company's vast pipeline and the potential to further monetize other assets should not be overlooked.
Readers looking for stocks with more near term upside might want to take a look at the ROTY model account, while those with a medium to long term time horizon could do well by establishing a pilot position in shares of Array.
Risks to thesis include disappointing data for pivotal and early stage trials, clinical setbacks and dilution in the medium term. Regulatory risk and competition with other approved BRAF/MEK inhibitors are also a key concern.
Author's note: My goal is to bring to readers' attention to undervalued stocks with catalysts that could propel shares higher, as well as provide a fresh perspective on stocks you may already be aware of. I also touch on planning trades and risk management, as those are two areas I feel are often neglected. If you found value in the above article, consider clicking the orange "follow" button and getting email alerts to receive my latest content. My sincere appreciation for readers who add value and join the discussion in the comments section, as well as those who share my work with others who could benefit from it.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
======================================
C L
Aug. 21, 2017 7:31 AM ET -- Jonathan Faison
Summary
•Shares are trading flat year to date and the stock remains solidly in value territory, even in the absence of near-term drivers.
•Clinical trial collaborations with Merck and Bristol-Myers Squibb bode well for future development of binimetinib.
•Monetization of rights in Japan and Korea was merely the next step in management's successful plan to partner rights for territories outside the United States.
•Data to be presented at ESMO in September is an important catalyst, while the company's multi-asset pipeline should not be overlooked.
•Risks to thesis include disappointing data for pivotal and early stage trials, clinical and regulatory setbacks, competition from other approved BRAF/MEK inhibitors and dilution in the medium term.
Shares of Array BioPharma (ARRY) are trading flat year to date. However, shares have more than doubled over the past three years.
Earlier this year in March the company's withdrawal of their New Drug Application for binimetinib in NRAS-mutant melanoma came as a disappointment to investors, as the FDA apparently did not find the clinical benefit demonstrated in the pivotal NEMO study to be sufficient to support approval. While the unlucky change of events was obviously a negative development, shares appeared oversold as the withdrawal did not affect chances of the drug candidate finding success as a treatment for BRAF melanoma (a much larger setting).
As the year progressed other positive signs pointed to continued upside in shares. The firm announced a clinical trial collaboration with Merck (NYSE:MRK) to investigate the combination of binimetinib with anti-PD-1 treatment Keytruda in metastatic colorectal cancer patients with microsatellite stable tumors. This came as a result of preclinical data suggesting that immune activity of the latter could be enhanced when combined with a MEK inhibitor, with the hypothesis in this case to be tested with binimetinib. As if that weren't enough, Array announced another clinical research collaboration, this time with Bristol-Myers Squibb (NYSE:BMY), to investigate the combination of binimetinib with Opdivo (and Opdivo+Yervoy) as a potential treatment for metastatic colorectal cancer in patients with microsatellite stable tumors. Results from this phase 1/2 trial would be utilized to determine next steps for clinical development of the combinations, with the two companies jointly supporting the study.
Array was able to monetize rights in Japan and South Korea by licensing both of its late stage drug candidates to Ono Pharmaceutical in exchange for $31.6 million upfront and an additional $156 million in potential milestone payments (not to mention double-digit royalties).
While Array's July-inked deal with Amgen (AMGN) might not have brought in much cash, the agreement to discover and develop drugs for autoimmune disorders is another noteworthy partnering success that lends credibility to the name. Amgen will take care of clinical development, with upfront and milestone payments in addition to royalties on sales to be provided on any therapies that come as a result.
In early May Array released data from part 2 of its pivotal COLOMBUS study in patients with BRAF-mutant advanced, unresectable or metastatic melanoma. Median progression-free survival for patients treated with 45mg of binimetinib twice daily along with encorafenib 300mg was 12.9 months, which compared favorably to 9.2 months for patients treated solely with the latter drug. In July Array announced the submission of two New Drug Applications to the FDA to support use of the combination of binimetinib and encorafenib for the treatment of patients with BRAF-mutant advanced, unresectable or metastatic melanoma supported by strong data from the pivotal COLOMBUS trial. With treated patients experiencing significantly longer progression free survival compared to those receiving vemurafenib, management appears convinced the totality of the data provides a strong rationale for approval.
Final Thoughts
For the most recent quarter the company reported cash and equivalents of $235.1 million, compared to a fourth quarter net loss of $29.6 million. BEACON CRC phase 3 safety lead-in and COLUMBUS Phase 3 part 2 data to be presented at ESMO in September is an important near term catalyst.
While there may be an absence of near-term catalysts aside from ESMO data, considering the size of markets being targeted and management's partnering prowess, the stock appears to be trading in value territory. Consider that the global melanoma market for MEK/BRAF inhibitors is an opportunity in excess of $1 billion. Lastly, the company's vast pipeline and the potential to further monetize other assets should not be overlooked.
Readers looking for stocks with more near term upside might want to take a look at the ROTY model account, while those with a medium to long term time horizon could do well by establishing a pilot position in shares of Array.
Risks to thesis include disappointing data for pivotal and early stage trials, clinical setbacks and dilution in the medium term. Regulatory risk and competition with other approved BRAF/MEK inhibitors are also a key concern.
Author's note: My goal is to bring to readers' attention to undervalued stocks with catalysts that could propel shares higher, as well as provide a fresh perspective on stocks you may already be aware of. I also touch on planning trades and risk management, as those are two areas I feel are often neglected. If you found value in the above article, consider clicking the orange "follow" button and getting email alerts to receive my latest content. My sincere appreciation for readers who add value and join the discussion in the comments section, as well as those who share my work with others who could benefit from it.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
======================================
C L