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What: Shares of Array BioPharma (NASDAQ:ARRY), a biopharmaceutical company that's focused on developing novel drugs to fight cancer, skyrocketed by 51% in January, based on data from S&P Capital IQ, after announcing a pipeline acquisition from Novartis (NYSE:NVS) and landing a key price target hike from Stifel Nicolaus.

So what: Without question, the bulk of Array BioPharma's gains last month are tied to its acquisition of encorafenib, a BRAF-inhibitor designed to treat a deadly form of skin cancer known as melanoma. What makes the deal so intriguing for Array shareholders is that the company acquired encorafenib from Novarits for a "de minimis payment" with no milestone or royalty payments. In other words, Novartis practically handed Array a late-stage experimental melanoma drug for hardly any cost. Furthermore, Novartis has agreed to pick up the tab on a substantial amount of the remaining costs of its multiple phase 3 studies.

The other exciting aspect here is with the reacquisition of global rights to binimetinib in December, Array could have a potentially potent melanoma-fighting combo in encorafenib, a BRAF-inhibitor, and binimetinib, a MEK inhibitor.

Following this announcement research firm Stifel Nicolaus announced that it was boosting its price target on Array by 50%, to $9 from $6. 

Source: Novartis.

Now what: There's really no way Array BioPharma shareholders can't like what they're getting here from Novartis. For pennies on the dollar they've landed a late-stage cancer compound that they could potentially combine with other developing products in their pipeline. Best of all, Novartis is still covering a substantial amount of phase 3 trial costs.

Of course, it's worth keeping in mind that encorafenib is still a few years away from hitting pharmacy shelves if it's approved. Also, the melanoma market is getting incredibly crowded with a handful of drug approvals over the last two years and a few more currently under review by the Food and Drug Administration. It could be tough for encorafenib to really stand out in such a crowded field.

Looking ahead I'd opine that most of the positive news from this announcement has already been baked into Array BioPharma's share price, meaning further upside could be limited until we get fresh study data.