Pfizer, 'never say never' with big M&A, inks $11.4B Array cancer deal

Pfizer sign
Pfizer has agreed to buy Arrary BioPharma for $11.4 billion, shortly after the biotech unveiled positive results for its Mektovi-Braftovi combo in colorectal cancer. (Tracy Staton)

Three years after purchasing Medivation for $14.3 billion, Pfizer is back with another hefty M&A deal. And once again, it's betting on oncology.

In the first big M&A deal under new CEO Albert Bourla, Pfizer has agreed to buy oncology specialist Array BioPharma for a total value of about $11.4 billion, the two companies unveiled Monday. The $48-per-share offer represents a premium of about 62% to Array stock’s closing price on Friday.

With the acquisition, Pfizer will beef up its oncology offerings with two marketed drugs, MEK inhibitor Mektovi and BRAF inhibitor Braftovi, which are approved as a combo treatment for melanoma and recently turned up positive results in colon cancer. 

Webinar This Week

OTC Innovation to Avoid Stagnation: Survey Insights, Expert Advice, and Latest Technologies to Boost Your Product’s Performance

Join us for a complimentary webinar on November 13 at 11am ET / 8am PT. Listen to industry experts as they analyze the critical role of innovation in OTC products, and strategies for achieving it.

The buy will enhance the Pfizer innovative drug business’ “long-term growth trajectory,” Bourla said in a Monday statement, dubbing Mektovi-Braftovi “a potentially industry-leading franchise for colorectal cancer.”

RELATED: Array's ‘extremely compelling’ new colon cancer data spark blockbuster talk

In a recent interim analysis of a trial in BRAF-mutant metastatic colorectal cancer, the pair, used in tandem with Eli Lilly and Merck KGaA's Erbitux, produced a benefit in 26% of patients, versus the 2% that chemotherapy helped. The combo also showed it could reduce the risk of death by 48%. SVB Leerink analysts at that time called the data “extremely compelling.”

Right now, one in every three new patients with mutated metastatic melanoma is getting the combo, despite its third-to-market behind combos from Roche and Novartis, Andy Schmeltz, Pfizer’s oncology global president, said during an investor briefing on Monday.

It is being studied in more than 30 clinical studies across several solid tumor indications. Moving forward, Pfizer believes the combo could potentially be used in the adjuvant setting to prevent tumor recurrence after surgery, Pfizer’s chief scientific officer, Mikael Dolsten, said on the call. The company is also keen to know how it could be paired up with Pfizer’s own investigational PD-1, he said, as the combo is already in studies with other PD-1/L1s.

But as Pfizer execs have previously said, the company's current business development strategy no longer centers on adding revenues “now or soon,” but rather on strengthening Pfizer's pipeline with earlier-stage assets. And Array can help there, too.

“We are very excited by Array’s impressive track record of successfully discovering and developing innovative small-molecules and targeted cancer therapies,” Dolsten said in a statement.

On top of Mektovi and Braftovi, Array has a long list of out-licensed drugs that could generate big royalties over time. For example, Vitrakvi, the first drug to get an initial FDA approval in tumors with a particular molecular feature regardless of their location, was initially licensed to Loxo Oncology—which was itself snapped up by Eli Lilly for $8 billion—but was taken over by pipeline-hungry Bayer. There are other drugs licensed to the likes of AstraZeneca, Roche, Celgene, Ono Pharmaceutical and Seattle Genetics, among others.

Those drugs are also a manifestation of Array’s strong research capabilities. To keep those Array scientists doing what they do best, Pfizer is keeping a 100-person team in Colorado as a standalone research unit alongside Pfizer’s existing hubs, Schmeltz said. 

Pfizer is counting on Array to augment its leadership in breast cancer, an area championed by Ibrance, and prostate cancer, the pharma giant markets Astellas-partnered Xtandi. For 2018, revenues from the Pfizer oncology portfolio jumped to $7.20 billion—up from $6.06 billion in 2017—mainly thanks to those two drugs.

RELATED: Forget megadeals, Pfizer CEO-to-be Bourla says. They're just too distracting

Since taking the reins from predecessor Ian Read, Bourla has tamped down talk of M&A—especially big deals—calling them distractions. But he has also sung the usual “never say never” tune. In pursuing what he called a different M&A dogma, Pfizer is looking at deploying capital “to enhance even further a pipeline to make our growth sustained,” he said during Pfizer’s first-quarter earnings call in January.

Meanwhile, Pfizer has racked up several new cancer drug approvals recently. These include OKs for acute myeloid leukemia therapy Daurismo, EGFR TKI Vizimpro and Xalkori follow-up Lorbrena in ALK-positive non-small cell lung cancer.

Suggested Articles

Intercept presented a data analysis that found treatment with Ocaliva led to "early and consistent improvements" in a range of noninvasive tests.

Days before Amarin faces a pivotal FDA vote on its Vascepa expansion, advisors are set to scrutinize the placebo used in its pivotal outcomes trial.

Both IL-17A inhibitors have rolled out data showing they work in non-radiographic axial spondyloarthritis.