Array BioPharma has completed its acquisitions of two Phase III oncology drug candidates—the MEK inhibitor binimetinib (MEK 162) and the BRAF inhibitor encorafenib (LGX818)—from Novartis, receiving $85 million upfront.

Array had been co-developing binimetinib, which it invented, with Novartis until Novartis agreed to return rights to the drug.

Novartis’ sell-off of the drugs was required by the Federal Trade Commission (FTC) last week in return for agency approval of the pharma giant’s acquisition of GlaxoSmithKline (GSK)’s cancer business.

Array CEO Ron Squarer said the company plans to file regulatory submissions for marketing approvals in 2016.

“These transformative transactions have accelerated our path to commercialization and provide us with the opportunity to develop two potentially broadly active products in a number of indications,” Squarer said.

Novartis was set to acquire the two drugs when it agreed last year to buy GSK’s cancer business for up-to-$16 billion. That transaction was completed Monday.

A week earlier on February 23, the FTC required Novartis to give up the two cancer compounds, citing anticompetitiveness concerns. In an administrative complaint, the FTC concluded that the pharma giant would likely delay or terminate development of its BRAF and MEK inhibitors if it were allowed to hold onto binimetinib and encorafenib since:

  • Only two BRAF inhibitors have been approved by the FDA, Roche’s Zelboraf® and GSK’s Tafinlar®.
  • Only one MEK inhibitor, GSK’s Mekinist®, is FDA-approved, though Roche and Novartis had products in late-stage development
  • Only one BRAF/MEK combination (Tafinlar plus Mekinist) is FDA-approved. Only Roche and Novartis could conceivably compete, the FTC found, because they have had BRAF/MEK combinations in clinical phases.

The FTC directive came about a month after Array said it reached agreement with Novartis to acquire worldwide rights to encorafenib as well as regain global rights to binimetinib. Under the encorafenib agreement, Array said it agreed to pay net consideration of $25 million: “Other than a de minimis payment to Novartis from Array, there are no milestone payments or royalties payable between the parties.”

Separately, the European Commission has raised anticompetitiveness concerns that Array has addressed by agreeing to seek an experienced partner for both global development and European commercialization of binimetinib and encorafenib. Array has said that if it is unable to find a suitable partner within a prescribed but undisclosed timeframe, a trustee would have the right to sell European rights to the compounds.

Successful commercialization of binimetinib and encorafenib will be among the responsibilities of Array’s new COO Andrew Robbins, who is now the company’s svp of commercial operations. Robbins will succeed David L. Snitman, Ph.D., who will retire at the end of June, Array said. Until that time, Dr. Snitman will serve as evp of business development.

In addition to the $85 million upfront, Array will receive reimbursement for transaction-related expenses. In return, Novartis agreed to provide transitional regulatory, clinical development, and manufacturing services and will assign or license to Array patent and other IP rights related to binimetinib and encorafenib.

Novartis agreed to continue carrying out all clinical trials involving binimetinib and encorafenib currently sponsored by itself or Array—including three pivotal trials, COLUMBUS (BRAF-mutant melanoma / NCT01909453), NEMO (NRAS-mutant melanoma / NCT01763164), and MILO (low-grade serous ovarian cancer / NCT01849874).

Novartis agreed to conduct and fund COLUMBUS through either the completion of the last patient’s first visit, or June 30, 2016, whichever is earlier. At that time, Array will assume responsibility for the trial, while Novartis will reimburse Array's out-of-pocket costs along with 50% of Array's full time equivalent (FTE) costs in connection with completing the trial.

For NEMO and all other ongoing and planned clinical trials for binimetinib other than COLUMBUS, Novartis will conduct and solely fund each trial, until a mutually agreed-upon transition date to Array.  Following the transition, Novartis agreed to reimburse Array for all remaining out-of-pocket expenses and half of all remaining FTE costs required to complete these studies.

Novartis also agreed to oversee all other encorafenib trials until their completion or transfer to Array for a defined transition period. For all trials transferred to Array, Novartis will reimburse Array for out-of-pocket costs and 50% of FTE costs toward completing the trials, Array said.

Array will also be reimbursed by Novartis for all remaining out-of-pocket expenses and half of all remaining FTE costs associated with MILO, which Array agreed to continue conducting.

Novartis also agreed to remain responsible for conducting and funding development of the NRAS melanoma companion diagnostic until Premarket Approval is received from the U.S. FDA. Following approval, Novartis will transfer the product and Premarket Approval to a diagnostic vendor of Array's designation.

Novartis also retains binimetinib and encorafenib supply obligations for all clinical and commercial needs for up to 30 months after closing and will also assist Array in the technology and manufacturing transfer of binimetinib and encorafenib. Novartis will also provide Array continued access to several Novartis pipeline compounds for use in currently ongoing combination studies, and possible future studies, including Phase III trials, with encorafenib and binimetinib.

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