Up-and-coming biotech firm Array Biopharma (ARRY) recently announced earnings for the fourth quarter of its fiscal year 2013. The company notched record revenue for the quarter on the heels of payments from partners, including one from Novartis (NVS -1.64%) for initiating a phase 3 trial with MEK162. Several other developments in a rather healthy pipeline were accompanied by one major setback. What do investors need to know about the company's most recent quarter? Where is Array headed in the near future? Here are three takeaways from earnings.

1. Type 2 diabetes deal ends
I'll preface the multiple positives with the glaring negative, which was tucked away in the earnings press release. I'm not a big fan of hidden disclosures and, the way I see it, if a new collaboration gets its own press release so, too, should one that ends. Amgen (AMGN 0.22%) decided to walk away from a collaboration in which the two companies were developing a suite of type 2 diabetes drugs that included ARRY-403/AMG-151. Amgen will release results from a phase 2a trial at a later date, but it is probably safe to say the data are not too impressive.

Losing Amgen is a big deal for Array, which is exemplified by a 20% reduction in the company's workforce as a result of the dissolution. The silver lining is that Array received a $60 million upfront payment. The bad news is that future milestone and royalty payments just evaporated. Can the rest of the pipeline step it up?

2. New collaboration with industry leader
Array may have lost Amgen, but it inked a new collaboration deal with Celgene (CELG). The two will work on developing drugs to treat a novel inflammation pathway developed by Array, although the program has yet to move out of preclinical work. Still, investors should feel comfortable with the deal for two reasons.

First, Array will receive an upfront payment of $11 million, could receive milestone payments totaling $376 million, and royalties on future sales. Second, Celgene has one of the brightest pipelines in the biotech industry. The company is developing Apremilast and Pomalyst for anti-inflammatory indications, which have shown promise elsewhere in the pipeline. That brings a tremendous amount of development experience to the collaboration. It is very early, but this could lead to great things for investors.

3. Pipeline progress
Most of Array's investing appeal is owed to the potential of its pipeline -- and there was plenty of news to go around. You can read the announcement for a full list of updates, but there was one in particular that caught my eye. Novartis and Array initiated two phase 3 trials evaluating MEK162 for low-grade serous ovarian cancer and NRAS melanoma. Novartis is also looking to start a third phase 3 trial with the drug in BRAF-mutant melanoma by the end of 2013.

According to the FDA, approximately half of all melanomas have a BRAF gene mutation. That is good news for the pair and any potential product revenue will be welcomed by investors should the drug one day gain approval, but the market is certainly competitive. The FDA approved two BRAF-targeting drugs in Tafinlar and Mekinist -- both from GlaxoSmithKline -- in May for metastatic melanoma. Even those drugs have to compete with entrenched therapies such as Zelboraf from Genentech and Yervoy from Bristol-Myers Squibb.  

Foolish bottom line
The fact that Amgen is walking away from the type 2 diabetes collaboration does hurt investors in the long run. Losing a well-established partner with deep pockets and a mastery of clinical development is never good news. However, investors may find solace in Array's pipeline. MEK162 probably has the brightest potential of any drug being pursued, but can it gain approval and then elbow its way to market share in a highly competitive melanoma market? Granted, that is just one indication, but it may be best to wait for more encouraging data to be presented. Do you agree? Let me know in the comments section below.