Thursday, December 20, 2007

Array: Read Between the Lines!

Many are reeling from today’s near 28% plunge in Array’s (NASDAQ: ARRY) stock price based upon the news of a failed Phase II for ARRY-886…ummm, is the street calling it failure…people please, hold on there for a moment! What exactly happened in the Mek inhibitor molecule study of this first in class novel therapy used as first-line treatment for advanced melanoma? From my unsophisticated perspective what happened, as announced by AstraZeneca (NYSE: AZN), Array’s partner in development, was that ARRY-886 demonstrated the same efficacy of standard of care and that result is paralleling activity of Schering-Plough’s (NYSE: SGP) Temodar® (Temozolomide), a compound that sold $459M in 2004, $588M in 2005 and $703M in 2006 and thus the ARRY-886 compound appears to be showing great promise as a drug for oncology. I am not attempting to make lemonade from lemons here, from what I understand is that ARRY-886 is demonstrating the equivalent efficacy to a near billion dollar a year drug, so yes, the compound did not delay disease progression but did show equivalency. Is that data worthy of a 28% pull-back? Going forward the guess is that ARRY-886 may be aggressively examined in combination therapy studies. The take away from today’s jolt for me was that this is an irrational reaction to misinterpreted news. The silver lining is that an attractive entry point or opportunity to add to a position has been created…not that this is investment advice of any kind. I would be curious to hear what folks at Array, AstraZeneca and/or Schering make of this news. Please leave a comment below or contact me directly at to maintain anonymity.

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