Pfizer will pay roughly $10.6 billion in cash to acquire Array BioPharma, a Boulder, Colorado-based biotech firm with a knack for designing small molecules that target highly specific cancer mutations. The deal brings Pfizer two marketed cancer drugs and a research engine that it hopes will be a growth driver for years to come.
The deal centers on Braftovi and Mektovi, two cancer drugs approved in the US last year for use in combination to treat people whose melanoma features a certain type of mutation in the BRAF gene. Pfizer was motivated to act after recent data showed the drugs could be a new treatment option for colon cancer, an indication the big pharma firm says has blockbuster revenue potential.
Pfizer was also drawn to Array’s unusually productive team of roughly 100 scientists, who mainly discover drugs that get licensed to other companies. Beyond Braftovi and Mektovi, Array invented Vitrakvi, the TRK fusion inhibitor that in January was the centerpiece of Eli Lilly and Company’s $8 billion takeover of Loxo Oncology, an Array spin-off. And Roche markets Ganovo, an Array-discovered NS3/4A protease inhibitor for hepatitis C virus, in China.
According to Pfizer research chief Mikael Dolsten, Array has 17 partnered programs in preclinical or clinical studies, including several in the final stages of development.
One notable early-stage asset is MRTX849, a compound from a partnership between Array and Mirati Therapeutics that inhibits a specific mutation in the infamous oncogene KRAS. Drug hunters have spent decades trying to crack KRAS. During Array's partnership with Mirati, Dolsten pointed out, Array developed a RAS oncogene platform that has given the firm “significant knowledge and ambition” to tackle the many different mutations in the RAS pathway.
Industry watchers wonder if Array can maintain that creative pace once under the umbrella of a big pharma firm.
On a call with investors this morning, Pfizer executives stressed the measures they are taking so the biotech will continue to thrive. Array’s Boulder site will operate as a stand-alone unit within Pfizer, Dolsten said, and Array executives think their team can continue to put one new drug into the clinic each year. At the same time, he argued that Array will benefit from Pfizer’s deep knowledge in oncology.
But history has shown that big pharma is not always successful at neatly integrating smaller, more nimble companies.
“It’s traditionally been hard for a larger company to buy a smaller one and maintain the culture of the smaller one,” says longtime drug discovery researcher Derek Lowe, who maintains the blog “In the Pipeline”. “Some of these have worked out better than others, but overall the track record seems to be that often the acquirer isn’t at all interested in doing anything like that—they clearly just bought the smaller company for its assets, which they will remove as if they’re picking ripe tomatoes off a vine.”
Lowe continues, “Sometimes they actually will want to preserve things about the smaller company, but not all those attempts succeed.” For example, talented chemists might take the buyout as a cue to move to new phase in their careers.
Pfizer tried to quell concerns of a research exodus. “We are taking actions in terms of retention,” Pfizer Oncology President Andy Schmeltz said during the call. “Retaining key talent is critical aspect of the deal.”