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What happened?

After reporting that the FDA has accepted its application for approval of binimetinib and delivering positive trial results from a study of binimetinib and encorafenib combination therapy, shares in Array BioPharma (NASDAQ:ARRY) soared 91.8% last month, according to S&P Global Market Intelligence.

So what?

September was a busy month for Array BioPharma's management. The company announced early in the month that the FDA had accepted its application for approval of binimetinib in patients with advanced NRAS-mutant melanoma and later in the month, the company reported solid results from a trial evaluating the use of binimetinib alongside another one of its drugs, encorafenib.

According to the company a FDA go/no-go decision on binimetinib will be made on June 30, 2017.

While there's no guarantee of a regulatory green light, efficacy and safety in this tough-to-treat patient population appears solid. 

In trials, patients given binimetinib every three weeks saw progression free survival of 2.8 months versus 1.5 months for patients receiving the chemotherapy dacarbazine. Patients who had previously been treated with an immunotherapy, such as Opdivo, saw progression-free survival of 5.5 months on binimetinib versus 1.6 months for dacabarzine.

The company's combination therapy trial results also appear encouraging. Combining binimetinib with encorafenib resulted in progression-free survival in BRAF-mutant melanoma patients of 14.9 months. That was much better than the 7.3 months for patients being treated with Zelboraf, a BRAF-melanoma therapy with $225 million in annualized sales.

Now what?

An approval of binimetinib next June could be meaningful because roughly 20% of melanoma patients have NRAS mutation. Last year, roughly 76,000 patients were diagnosed with melanoma, suggesting an addressable patient population of up to 15,000 annually.

The company plans to file for approval of its binimetinib and encorafenib combination therapy next year and if that duo wins a FDA greenlight too it could further increase the company's opportunity in the indication. Since Array BioPharma owns the U.S. rights to both binimetinib and encorafenib and net sales of drugs that work similarly to these drugs already approaches $250 million per year, the peak sales potential for Array BioPharma is significant.

 

Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. Like this article? Follow him on Twitter where he goes by the handle @ebcapital to see more articles like this. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.