What happened

Shares of Array BioPharma (ARRY), an oncology-focused biopharmaceutical company, rose 31% in January, according to data from S&P Global Market Intelligence. Last month, Eli Lilly (LLY -0.24%) agreed to pay $8 billion for a few drugs that Array still owns a piece of. Also, a combination therapy Array already markets took a big step toward an important label expansion.

So what 

The new year kicked off with Eli Lilly agreeing to acquire Loxo Oncology (LOXO) for $8 billion in cash. Lilly was drawn to the highly specific kinase inhibitors that Loxo acquired from Array Biopharma. 

Man in a suit flying with a cartoon jetpack, next to an upward-sloping arrow indicating a rising stock.

Image source: Getty Images.

Lilly's interest in drugs Array discovered wasn't the only good news last month. We also learned that Array's combination of Braftovi plus Mektovi for melanoma patients with BRAF mutations could become part of a triplet therapy for patients with advanced-stage colorectal cancer. Braftovi plus Mektovi added to Erbitux extended median overall survival for these patients to 15.3 months. We don't have a comparison group measure the triplet against, but we know a majority of similar patients don't survive more than six months following standard care.

Check out the latest Array BioPharma earnings call transcript.

Now what

According to Array, the FDA appears willing to grant the triplet an accelerated approval based on the overall response rate and durability of those responses. Array anticipates response rate results during an interim analysis scheduled for the first half of 2019. If the results are positive, an approval to treat colorectal cancer patients could happen in 2020.

Array's entitled to another $635 million in commercialization milestones from Eli Lilly, plus royalties on any sales of partnered drug candidates. With Lilly's muscle behind Vitrakvi and LOXO-292, Array has a much better chance to receive those milestone payments and significant royalties. With a handful of growing revenue streams, Array looks like a top biotech stock to buy.