Array Biopharma Inc (ARRY), AstraZeneca plc (ADR) (AZN), GlaxoSmithKline plc (ADR) (GSK): This Cancer Biotech Is Looking for Other Green Pastures

Array Biopharma Inc (NASDAQ:ARRY), a biotech company primarily focused on discovery of drugs for cancer treatment, is making forays into the asthma market. The company recently announced encouraging results – 6.8% improvement in FEV1 versus placebo – of Phase II clinical trials of ARRY-502, an oral medication for management and treatment of asthma. FEV1 (forced expiratory volume in one second) is a measure of lung function and one of the parameters used for classifying asthma. The other two are frequency of symptoms and peak expiratory flow.

Array Biopharma Inc (NASDAQ:ARRY)The study, conducted on 184 patients with mild-to-moderate persistent allergic asthma, achieved both primary and secondary endpoints signaling continuation of development of ARRY-502. Array Biopharma Inc (NASDAQ:ARRY) is now seeking partners for further development of ARRY-502. With 12 million patients of mild-to-moderate asthma in the US alone there should not be any dearth of pharmaceutical companies wanting to partner with Array.

Potential partners

AstraZeneca plc (ADR) (NYSE:AZN), which already partners Array Biopharma Inc (NASDAQ:ARRY) in a cancer drug, could be one of them. AstraZeneca plc (ADR) (NYSE:AZN), whose treatment for COPD, Symbicort, is under threat from a new class of LAMA/LABA drugs, and needs to secure its position in the market. It was probably for this purpose that it acquired Pearl Synthetics, a specialist in respiratory drugs, for $1.15 billion. More recently, the company announced a partnership with FibroGen for an anemia drug committing $350 million cash and another $465 million in milestone payments.

75% of AstraZeneca plc (ADR) (NYSE:AZN)’s $28 billion revenue is contributed by its top ten drugs. With the threat of patent expirations and a pipeline that is not so great, the company is under pressure to maintain regular dividend payments. At CMP of $50.74 a share, the company has a dividend yield of 5.5%.

COPD (Chronic Obstructive Pulmonary Disease) and asthma have similar symptoms but have different pathophysiology. Both are results of inflammation of one of the components of the immune system, white blood cells, but of different types. While in COPD, it is due to inflammation of the microphages and neutrophils, in asthma it is from eosinophils. There are other differences as well – FEV1 decreases between asthma episodes but is irreversible in COPD. Asthma often progresses into COPD.

GlaxoSmithKline plc (ADR) (NYSE:GSK) is another company that could evince interest in ARRY-502. The company has a major presence in the respiratory drug market. Advair, a combination drug for management of asthma and COPD is the company’s top selling drug with 20% of its pharmaceutical sales.

Array’s ARRY-502 would indeed be a welcome asset in the company’s respiratory candidates under development while it awaits approval of Brio/Revlar, which combines the corticosteroid (fluticasone: inhalable) with a LABA (vilanterol). Breo/Revlar is being considered as the next generation treatment of asthma/COPD even as Advair’s first quarter sales increased by 2% to $1.92 billion.

It’s not about asthma alone

Coming back to Array Biopharma Inc (NASDAQ:ARRY), the company’s primary focus is on discovery and development of targeted small molecule drugs for treatment of cancer and ARRY-502 is just one of the five candidates in the company’s pipeline – one each for multiple myeloma, MDS (myelodysplastic syndrome), pain and diabetes.

In preclinical trials, ARRY-520, the company’s candidate for multiple myeloma currently in mid-stage trials, demonstrated rapid onset of death of tumor cells whose survival depends upon MCL – 1 protein. Early July, the company achieved a $5 million milestone when it initiated Phase III clinical evaluation of MEK 162 in patients with low grade serious ovarian cancer who have “progressed to cytotoxics and have no other proven therapeutic options.