Looks like the market solidly supports 250M valuation on this news. Any idea how this number can be eyeballed?
It's not Array that ended collaboration. What this means is that Amgen does not see good reason to develop AMG151 any further and hands it back to Array. Array already got paid for it and can just as well shelf it for good - they have plenty of drugs in the pipeline. Array needed to trim some fat and uses this hiccup as an excuse to cut 50+ people. There were never 50 people working on this collaboration or any other. Those laid off are undesirables across the board who were let go to make sure that the financials look good. It's a natural life cycle of a biotech company. Not every drug candidate makes it all the way to the market, and when they fail it usually costs people their jobs.
More two-penny advice for you if you are "long" as you say.
"You have not lost anything until you sold at a loss."
"Buy the rumor, sell the news." Works in reverse here, because people rerceive this as "bad" news.
Every drug candidate has a value, regardless of how far it progressed in clinical trials. You can keep developing it yourself and hope that it grows in value as it shows preclinical efficacy, then human safety, then POC, then clinical benefit, then commercial profit. Or you can sell it to another company at any stage and then it is called COLLABORATION - just getting your money's worth for intellectual property created so far, and sharing the risk going forward.
Besides that I think that the troll who started this thread should be ignored, because all he does is unsubstantiated bashing. Go back under the bridge and cover your short positions while you can.
Forget about Amgen collaboration. Array got 75M from them - good return on their investment. And all the good people that toiled for years on making it happen are laid off now. Array is all about MEK , ARRY-614, ARRY-520 and ARRY-502 now.
I think that AMG151 actually failed in the clinic - Amgen cancelled their Phase II trial some time ago. But nobody was counting on it anyway, Array last mentioned it a year ago as a 8.5M milestone source. All Array was touting since then is their oncology/inflammation pipeline. No big deal for Amgen, they bid 75M on it and lost - pocket money for the company. No big deal for Array - this drug was outside of their core competency and a long shot at diabetes market.
Overall, the layoff is a slightly positive news - cuts the burn rate once again, turns the corner towards profitability. Earnings release is also slightly positive - nobody really cares about beating estimates too much, but analysts like to see predictability and sticking to the guidance from the management. I expect ARRY to open tomorrow flat or up from the close price.
As the old saying goes - better one bird in hand, than two ...
If they give you one share of AMGN for ten of your ARRY shares - would you refuse?
These guys do not need five times more - they've got enough already. Their problem now is getting out of the game. They cannot dump their hundreds of thousands of shares and they still have hundreds of thousands in unvested ISOs.
Stop the "smart management" @#$%, all they want is "get rich quick", not becoming a powerhouse. Management has little say in decisions like M&A. BOD and shareholders are pulling strings on that. If there is an offer on the table at reasonable price ( $10/share), they'll take it. Cash in and move on. Management would have nothing to complain about, all their ISOs would vest immediately and they'll become multimillionaires overnight. Enough to retire in Boulder comfortably and sit on the boards of other less fortunate start-ups.
It should fill - not much news here, another Celgene preclinical deal. Expect a run-up before the earnings release - maybe up to $7. Then another drop.
We are entering the era of personalized drugs. Array says 25% patients have Th2 biomarker, 22M asthma patients in USA = 5M have it. Half of them should have improvement equal or better than the statistical average. Let's say conservatively 20% of those would like and adopt the drug. There, you have at least one million patient market.
Look back at the news earlier this year - they announced open market share sales through a broker to raise money. No abrupt secondaries - just careful throttling on days like this. It is likely to close today at $6.10-6.20 with 15-20M volume . That is going to be record volume by far. Someone is feeding a bunch of shares into this rally. By the end of the day the "secondary" would be done with.
Educate yourself on side effects of Singulair - they are not pretty. ARRY-502 so far has very clean profile. It also has absolutely different MOA - therefore may be possibly combined with any other asthma drug.
Array is not worth much more than 1B, maybe 1.5B if they play it out right and get a bidding war. Most any pharma or bigger biotech can buy them. If BMY makes a move, AMGN or CELG can jump in and up the premium in the eleventh hour. That's how Amgen nabbed AMG151 after all - the week before Christmas.
merryshmuck is trying to distract us here. Amgen had a failed attempt at small molecule shop, which became Array. Now Amgen is developing a small molecule which Array discovered and licensed to them - AMG151. Check out the clinical trials dot gov. They just completed Ph 2 two weeks ago. If the results are good then Amgen should gobble up Array before going Ph 3, instead of paying royalties later.
This may be huge. We probably would not know any time soon what this "amendment" contains. But from the looks of it Celgene picked up one of the more promicing preclinical candidates from Array and paid 3M just to put it in tox studies. I have no doubt that "adjustment" of the milestone for IND is upwards, maybe to 20-25M. With good luck see that cash on Array's balance sheet in 6 month.
Not so fast, pal. Watch this inching up by nickel and dime over the next couple of months and we'll be back to 5 or maybe 6. Then some positive catalyst to 8-10 in Q2. Then acquired at 10-12 by the end of 2013. Or if the management screws it up as usual - then sold at 8.
120MM shares is the original max number from the time when ARRY went public with barely over 20MM shares outstanding. Now they are in the 90+ range and need to increase the ceiling. This may mean that they are planning another secondary, or maybe they are hoping to go through the roof and split - either way the number of shares should be authorized. It may also mean neither at all.
I figure that about 1-2 mil shares are used every year for ESPP depending on PPS. This year started really low, therefore the need to bump up the number of shares. This is not really a handout, because they have to PAY for the shares through paycheck deduction. More of a little nice perk.
Buyout is on the horizon. Two of three are founders that would not want to sell the company to Jumbogen. Now they are sidelined and the path is clear.
Buyout is on the horizon. Koch and Snitman are two last founders of Array on board. They would hate to see their brainchild sold. That's why they are being pushed to the sideline. Not that they can block the sale, but they can surely stink a lot. And guess what is the company that they hate most? Amgen, which laid them off. Anyone can put together two and two?