Pfizer to buy cancer drug developer Array for $10.64B

Henrietta Strickland
June 19, 2019

Shares of Array BioPharma Inc. rocketed 56% toward a record high in premarket trading Monday, after biopharmaceutical company developing cancer treatments agreed to be acquired by Pfizer Inc.in a deal valued at $11.4 billion.

The deal at $48 per share of Array offers a premium of about 62 percent to the stock's close on Friday.

The largest US drugmaker is paying a hefty premium of 62% to get access to Array's approved treatments for skin cancer as well as its other experimental drugs. But those drugs appear poised to become part of a promising triple combination for advanced colorectal cancer.

Its portfolio contains the combination treatment Braftovi (encorafenib) and Mektovi (binimetinib) for the treatment of BRAF or BRAF mutant unresectable or metastatic melanoma.

"There will be ample opportunities to do combinations and build a whole science platform around colorectal cancer", said Dolsten, adding that he believes the Array drugs could eventually tackle colon cancer earlier in the disease process.

Zelboraf has however lost out in the market due to competition with Novartis' MEK/BRAF inhibitor duo Mekinist (trametinib) and Tafinlar (dabrafenib) which grew 31% to $1.12 billion in sales previous year and is now than main competitor to Array's drugs.

Under the new Chief Executive Officer Albert Bourla, Pfizer has been looking into ways to diversify its drug pipeline as its blockbuster pain drug Lyrica loses patent protection and faces increased competition among other generics providers.

The company has been saying for more than a year that it would eschew transformative deals.

Shares of Pfizer were last seen down almost 1% at $42.42, with a 52-week range of $35.73 to $46.47. That knowledge has created an array of targets for drug makers to attack, leading to new tailored therapies often defined by a tumor cell's specific biology rather than its location in the body. The price will also prove to be challenging to Pfizer's financial outlook, as executives estimated it will be 4 to 5 cents dilutive to earnings per share in each year 2019 and 2020, and only begin to be accretive in 2022.

For Pfizer, Array is the second biggest acquisition after the takeover of Medivation for $14 billion, three years ago.

Pfizer said it expects to finance most of the transaction with debt, and the balance with existing cash.

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. Cornerstone Advisors Inc. lifted its position in Array Biopharma by 38.2% during the 1st quarter.

Other reports by Click Lancashire

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