Biopharamaceutical companies Oncothyreon Inc. (ONTY) and Array BioPharma Inc. (ARRY), Thursday said it joined hands to develop and commercialize ARRY-380, a selective small-molecule that have the potential to inhibit HER2 in metastatic breast cancer patients. ARRY-380 is an orally active and reversible compound. In studies, it has demonstrated additive tumor growth inhibition in combination with the standard-of-care therapeutics Herceptin or Taxotere.
HER2, also known as ErbB2, is a receptor tyrosine kinase that is over-expressed in breast cancer and other cancers such as gastric and ovarian cancer.
As per the agreement, Oncothyreon will pay Array a fee of $10 million upon initiation of the collaboration, will fund and conduct the clinical development of ARRY-380 through a defined set of combination proof-of-concept trials. The trials will include patients with brain metastases.
Oncothyreon and Array intend to jointly conduct Phase 3 development supported by the proof-of-concept studies, with each party retaining the right to opt out of further development and commercialization in exchange for a significant royalty. Outside the U.S., Oncothyreon will receive a double-digit royalty on net sales intended to approximate a fifty percent profit share, and the two companies will share equally the proceeds from any sublicense of marketing rights.
Further, in a separate statement the company said that it has agreed to sell 5 million shares of its common stock and warrants to purchase 5 million shares of common stock for gross proceeds of approximately $10 million. The common stock and warrants will be sold in units at an exercise price of $5 per share, and each unit at a price of $2. The net proceeds will be used to fund $10 million upfront fee payable to Array BioPharma Inc.
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