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What happened
After Array BioPharma (ARRY +0.00%) updated investors on its progress toward its first commercial-stage medicine at the JP Morgan Healthcare Conference in early January, its stock rose 23.7% higher last month, according to S&P Global Market Intelligence.
So what
Array BioPharma has two therapies that are approaching regulatory review, and management provided a bullish outlook at the conference that suggests that those drugs could have a good shot at winning away market share in what it believes is a $1 billion marketplace.
First up is binimetinib, a MEK inhibitor that will undergo scrutiny by a Food and Drug Administration review committee in the first half of 2017, and that's expected to receive a final go/no-go decision on June 30. If approved, binimetinib will be used in advanced NRAS-mutant cases of melanoma. Array BioPharma estimates that about 20% of melanoma patients have the genetic makeup that is amenable to binimetinib.
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 also plans to submit an application for approval soon for a combination therapy consisting of binimetinib and another one of its drugs, encorafenib.
In patients with advanced BRAF-mutant melanoma, the two drug combination delivered progression-free survival rate of 14.9 months, which exceeded the 7.3-month rate for patients treated with Roche Holdings' Zelboraf, a leading BRAF-melanoma therapy. Management estimates that about half of melanoma patients possess the right genetic makeup to receive this combination therapy, and Zelboraf hauls in annualized sales of about $215 million, at current exchange rates.
Now what
Binimetinib's approval depends a lot on whether the FDA's review committee recommends it. Therefore, when the review date is announced, investors will want to tune in.
Overall, about 76,000 patients are diagnosed with melanoma annually, and because many fail to respond to therapy, or see their disease return, the addressable market for these medicines in America and Europe may exceed 25,000 people.
Because currently approved drugs, including Zelboraf, carry six-figure annual price tags, and these drugs appear to have an edge over existing treatment options, approvals could translate into hundreds of millions in peak annual sales. Having said that, there's no guarantee that the review committee will recommend approval or that if they do, the FDA will follow their advice and approve it.
Also, it's uncertain how much market share an approval might eventually net, because Roche won approval last year for the use of Zelboraf with its MEK-inhibitor, Cotellic, in the larger BRAF-mutant patient population.
