Array BioPharma, Inc. (ARRY) and Celgene Corporation (CELG) recently announced a strategic worldwide research & development collaboration. The agreement is for a preclinical program (discovered by Array BioPharma) aimed at a novel inflammation pathway.
As per the terms of the agreement, Array BioPharma will receive an $11 million upfront payment from Celgene while the latter will have the option to license several clinical development candidates. Moreover Array BioPharma is eligible to receive up to $376 million on the achievement of specified development, regulatory and sales milestones.
The company is also eligible for royalties on sales of any drugs developed and commercialized under this deal. Array BioPharma will reserve all the rights under the program if Celgene does not exercise the granted option.
Array BioPharma has been quite active in collaboration activities this year. Earlier this month, the company entered into a multi-year licensing and collaboration deal with Loxo Oncology for a preclinical development candidate (discovered by Array BioPharma) and related intellectual property.
Furthermore, in May 2013, Array BioPharma 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.
We note that Array BioPharma has entered into several collaborations with big companies and amassed a total of $577.9 million in research funding and upfront and milestone payments from collaboration partners from inception till Jun 30, 2012.
The company is focused mainly on the development and commercialization of targeted small molecule drugs for the treatment of cancer patients. We also note that the company has a few candidates approaching phase III by the end of 2013.
Currently, Array BioPharma carries a Zacks Rank #2 (Buy). However, biopharma stocks such as Actelion Ltd. (ALIOF) look more attractive with a Zacks Rank #1 (Strong Buy).
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