BoA likes Array

Based on expected clinical progress of ARRY-543 driving partnering success...

'543 is a combo EGFR + ErbB2 small molecule inhibitor in a Phase 1 started a year ago, so data is due soon, but I think it's premature to boost this stock until ARRY publishes results. (Which I'm guessing pharma is waiting on as well.)

If effective, '543 would be a blockbuster, unless you're in the crowd that believes that medicine will demand single-target inhibitors to provide the most custom tailored treatment (versus multi-kinase inhibitors with potentially negative ON-target effects), but this debate is really a few years off.

ARRY is valued ~$510M, with about $100M in cash on hand.

Quick, back of the envelope calculations suggest ARRY's pipeline is worth the $410M difference.
Interestingly, ARRY's value didn't really change following DNA's partnering with EXEL on XL-518 (MEK) (deal: $40M @ IND, suggesting ARRY's product - now in phase II for melanoma - is probably two years ahead and worth an additional ~$100M, depending on a number of factors. I would have guessed that the endorsement and imputed value from the DNA deal would have goosed the stock $25-50M or 5-10%.

ARRY's most recent corporate summary.

Are EGFR Inhibitors Only Useful in Certain Patient Groups?

It's becoming more clear that some targeted therapies can be even more finely targeted, as highlighted in this summary of EGFR inhibitors.

Consider these findings from Iressa trials:
"EGFR inhibition response rate to Iressa was 27% in Japanese patients compared with only 10% in non-Japanese patients, but that this difference was not as significant as the differences in response rate favoring women over men, patients with adenocarcinomas over squamous carcinomas, and healthier patients over less healthy ones (“performance status”, or the ability to perform the activities of daily living without assistance or significant symptoms). The US-based IDEAL-2 trial also showed women receiving iressa to be more likely to have symptomatic improvement (50% vs. 31%) and significant tumor shrinkage (19% vs. 3%) compared with men, and also that patients with adenocarcinomas were more likely to have symptomatic improvement (43% vs. 30%) and tumor shrinkage (13% vs. 4%) compared with those who had squamous tumors. "

Good news (in terms of tumor shrinkage, but NOT survival) if you're a non-smoking Japanese woman with an adenocarcinoma, bad news if not.

Kind of amazing that this sort of knowledge is only coming to light ~3 years post-FDA approval. (I'm not suggesting that approval be delayed, just that with any approval, there's still many important outstanding questions.)

This also brings to mind the question of who is likely to sponsor the development of the relevant intelligence and diagnostics to further segment patients. You might guess that the makers of EGFR inhibitors would, but is it in their best interest to EXCLUDE potential customers? (Plus, there's enough competitors among EGFR inhibitors that no one is likely to want to pay to develop this market for the benefit of their competition.

(That being said, I'm pretty sure that I've seen press releases announcing that AZ has sponsored EGFR biomarker development, with CST, I think.)

Tykerb: $2B in rev @ peak?

GSK's Tykerb just received priority FDA review, meaning that if everything goes right, it will be on the market in about 6 months - initially for breast cancer.

The linked article suggests Tykerb will peak at $2B in annual revenue, which seems a bit large.

A small molecule dual EGFR + Her2/neu inhibitor, Tykerb could supplant Herceptin (~$750M in 2005 sales) and potentially Tarceva, meaning that Genentech is solidly in GSK's cross hairs (not to mention other EGFR product makes like ImClone/BMS, and Amgen.)

IMHO, DNA needs to rev up Tarceva marketing ASAP.