Pfizer Inc. announced on June 17 that it would acquire Array Biopharma Inc. in cash for a sum of $10.64 billion, with the hope that this deal will help revolutionize Pfizer’s oncology drugs pipeline.
A hefty premium of 62% was agreed upon by the largest U.S. drug maker for Array, which manufactures Braftovi and Mektovi, a combination treatment for melanoma. But these drugs are also slated to become a part of a triple combination for advanced colorectal cancer.
Pfizer began pursuing Array last month after the trials of Braftovi and Mektovi in combination with Eli Lilly and Co’s Erbitux for colorectal cancer started showing positive results. This combination was reported to be successful in reducing colorectal cancer mortality risk by 48% in patients diagnosed with a BRAF V600E gene mutation.
Braftovi and Mektovi was launched last July at a price of $22,000 per month, for the treatment of melanoma. The company garnered a revenue of $72 million over the period of first nine months, and it also generates revenue from licensing and royalty deals. Each share of Array which earlier cost $48 to Pfizer, saw an increment of 57%, leading to Pfizer’s shares rising by almost 0.3%.
Oncology has become one of the highest revenue-generating domains for drug companies, as groundbreaking discoveries in therapeutics are leading to improved survival rates and rising costs of drugs.
Under new Chief Executive Albert Bourla, Array has been Pfizer’s first major purchase. It is Pfizer’s biggest acquisition after 2016’s $14 billion purchase of Medivation, which gave Pfizer the rights to the prostate cancer drug, Xtandi, which is expected to gain $1 billion in revenue next year.
As mentioned by Pfizer, the deal is expected to be completed in the second half of 2019. This transaction is expected to add to company’s earnings from the beginning of 2022.