Pfizer has agreed to acquire Array BioPharma for approximately $11.4 billion, the companies said, in a deal intended to expand the buyer’s oncology presence and pipeline—starting with an approved combination therapy for melanoma that is now in a Phase III trial for a form of metastatic colorectal cancer.
Array’s portfolio includes the combination of Braftovi® (encorafenib) and Mektovi® (binimetinib) for BRAFV600E or BRAFV600K mutant unresectable or metastatic melanoma. The combination is currently being investigated in the Phase III BEACON trial (NCT02928224) in patients with BRAF–mutant metastatic colorectal cancer (mCRC), one of more than 30 clinical trials assessing Braftovi-Mektovi across several solid tumor indications.
Last month, Array trumpeted positive results from an interim analysis of BEACON trial data showing that second-or-third-line treatment with the combination of Braftovi+Mektovi, plus Eli Lilly’s Erbitux® (cetuximab) showed statistically significant improvement in overall response rate and overall survival compared to the control group, reducing the risk of death by 48%.
Array said it intended to submit the data for regulatory review in the United States in the second half of this year for the triple combination, which the company said could be the first chemotherapy-free, targeted regimen for patients with BRAF-mutant mCRC.
BRAF mutations are estimated to occur in up to 15% of colorectal cancer cases, investigators for the BEACON trial stated in a presentation of positive study results last year at the 2018 Gastrointestinal Cancers Symposium (ASCO GI) in San Francisco. BEACON was active but not recruiting patients as of January 28, the date of the most recent update on ClinicalTrials.gov.
“The proposed acquisition of Array strengthens our innovative biopharmaceutical business, is expected to enhance its long-term growth trajectory, and sets the stage to create a potentially industry-leading franchise for colorectal cancer alongside Pfizer’s existing expertise in breast and prostate cancers,” Pfizer CEO Albert Bourla said Monday in a statement.
In addition to the Braftovi-Mektovi combination, Array has built a pipeline of more than a dozen cancer treatments, as well as a portfolio of out-licensed potentially best-in-class and/or first-in-class medicines, which Array and Pfizer reason is expected to generate significant royalties over time.
“Impressive track record”
“We are very excited by Array’s impressive track record of successfully discovering and developing innovative small-molecules and targeted cancer therapies,” added Mikael Dolsten, Pfizer CSO and president, worldwide research, development and medical. “With Array’s exceptional scientific talent and innovative pipeline, combined with Pfizer’s leading research and development capabilities, we reinforce our commitment to advancing the most promising science, regardless of whether it is found inside or outside of our labs.”
The boards of both Pfizer and Array have approved the acquisition, which is expected to be completed in the second half of this year—subject to customary closing conditions that include regulatory approvals and the tender of a majority of the outstanding shares of Array common stock on a fully-diluted basis.
A subsidiary of Pfizer will commence a cash tender offer to purchase all outstanding shares of Array common stock for $48 per share cash. The merger agreement contemplates that Pfizer will acquire any shares of Array that are not tendered into the offer through a second-step merger, which will be completed promptly following the closing of the tender offer.
Pfizer said it expects to finance most of the transaction with debt, and the balance with existing cash. The transaction is expected to reduce Pfizer’s adjusted diluted earnings per share (EPS) by $0.04 to $0.05 this year, and another $0.04 to $0.05 in 2020, then be neutral in 2021, and begin adding to EPS in 2022 and afterward.
In reporting first-quarter earnings on April 30, Pfizer raised by $0.01 a share its 2019 “adjusted” diluted EPS guidance range to investors, to between $2.83 and $2.93.
Adjusted diluted EPS excludes purchase accounting adjustments, acquisition-related costs, discontinued operations, and certain significant items. The increase primarily reflected a $0.03 per share operational improvement, primarily due to an increase to adjusted other income, partially offset by a $0.02 a share decrease reflecting unfavorable changes in foreign exchange rates since mid-January 2019.
Upon closing of the deal, Array’s employees will join Pfizer and continue to be located in Cambridge, MA, and Morrisville, NC, as well as Boulder, CO. Those sites will join Pfizer’s Oncology Research & Development network, in addition to its current sites in La Jolla, CA, and Pearl River, NY, some 31 miles northwest of Pfizer’s headquarters in New York City.
