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Array BioPharma's NDA for Cancer Drug Withdrawn; Shares Down

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Shares of Array BioPharma Inc. slipped 2.30% after the company announced that it has withdrawn its new drug application (NDA) for its pipeline candidate, binimetinib, from the FDA’s Division of Oncology Products 2. The candidate was being evaluated as a monotherapy for the treatment of NRAS-mutant melanoma, a rare, mutationally-driven subset of skin cancer.

Array’s shares have underperformed the Zacks classified Medical-Biomed/Genetics industry so far this year. Shares of the company gained 3.9% while the industry registered an increase of 8.2%.

The NDA was submitted in Jun 2016 based on positive results from the phase III trial, NEMO, which compared binimetinib with dacarbazine in unresectable or metastatic NRAS-mutant melanoma patients. The study met its primary endpoint of improving progression-free survival (PFS) versus dacarbazine treatment.

We note that the decision to withdraw the NDA was based on thorough discussions with the FDA, following late cycle review meeting held with agency. According to the feedback received from the FDA, the clinical benefit demonstrated in the phase III NEMO study was not sufficient to support the NDA.

Nonetheless, the action will not impact the other ongoing trial on the drug.

Array is evaluating binimetinib in several other oncology trials. A phase III trial, COLUMBUS, is evaluating encorafenib, in combination with binimetinib, in patients with BRAF-mutant melanoma. It has also initiated the BEACON trial to study encorafenib, in combination with binimetinib and cetuximab, in patients with BRAFV600E-mutant colorectal cancer. In Nov 2016, the company announced positive results from the COLUMBUS study, which met its primary end points. The company plans to submit the NDA in mid-2017.
We remind investors that Array regained development and commercialization rights to binimetinib from Novartis Pharma AG (NVS - Free Report) in Mar 2015.

Thereafter, the company entered into an agreement with Pierre Fabre Medicament SAS, whereby the latter was granted rights to commercialize binimetinib and encorafenib in all countries except the U.S., Canada, Japan, Korea and Israel, where Array retained rights. The agreement became effective in Dec 2015.

Array BioPharma is focused on the discovery, development and commercialization of targeted small-molecule drugs to treat patients suffering from cancer. Several registration studies on three cancer candidates – binimetinib (MEK162), encorafenib (LGX818) and selumetinib – are currently underway at the company.

Zacks Rank & Key Picks

Arraycurrently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the health care sector include Addus HomeCare Corporation (ADUS - Free Report) and The Advisory Board Company . Each of these stocks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Addus HomeCare’s earnings per share estimates increased from $1.38 to $1.41 for 2017 over the last 30 days. The company posted positive earnings surprises in two of the four trailing quarters, with an average beat of 10.10%.

The Advisory Board’s earnings per share estimates increased from $1.41 to $1.49 for 2017 over the last 30 days. The company posted positive earnings surprises in three of the four trailing quarters with an average beat of 33.41%.

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