MARKET UNDER-REACTS TO ARRAY BIOPHARMA’S GROUNDBREAKING CRC DATA


Summary:

  • Array Biopharma is presenting data this weekend at the European Society for Medical Oncology (ESMO) on its lead drug candidates, encorafenib (ENCO) and binimetinib (BINI).

  • Initial colorectal cancer (CRC) data for BINI and ENCO along with cetuxumab (CETUX) presented by Array looks extremely promising.

  • Even if the positive data does not drive the ARRY stock price much higher after investors have more of a chance to digest it, the stock is likely to continue to move up between now and the likely FDA approval of BINI and ENCO in BRAF-mutant melanoma.

Investment Thesis:

Despite regaining some of its valuation lost during Q2, 2017, Array Biopharma’s current price does not appear to factor in the CRC opportunity for its lead drugs BINI and ENCO. This weekend at ESMO, Array is presenting more data not only on its phase 3 COLUMBUS registration trial for BRAF-mutant melanoma, but more importantly from our view, on the lead-in stage of its phase 3 BEACON registration trial for BRAF-mutant CRC. Although it is hard to predict whether there will be a large upward movement in the stock after the data presentation, it is likely that the data will be positive and there does not appear to be a lot of downside risk at this point. Therefore, the possibility of some upward movement with a low likelihood of downside risk, plus a possible run up to approval for BINI and ENCO in BRAF-mutant melanoma in the first half of next year, make ARRY an attractive long-term investment.

Company Overview:

Array Biopharma has been a prolific drug development company over the last decade discovering a host of small molecule drug candidates for the treatment of cancer and other indications. However, Array has not yet commercialized any of its compounds to date.

Read the rest of our ARRAY report.


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