Cantor Now Sees Bigger Market Opportunity for Array Biopharma Inc’s (ARRY) Binimetinib/Encorafenib Following ESMO Presentation

Forecasting a potential $500 million yearly sales opportunity ahead, the analyst lifts price target on Array.

Array Biopharma Inc (NASDAQ:ARRY) investors were happy campers this past Friday, sending shares on a nice 7% upturn following compelling safety results and initial clinical activity posted from the safety lead-in of the firm’s Phase 3 BEACON in BRAF-mutant metastatic colorectal (CRC) patients.

Specifically, the trial evaluated binimetinib, a MEK inhibitor, encorafenib, a BRAF inhibitor, as well as Erbitux (cetuximab), an anti-EGFR antibody, and the indication of BRAF-mutant CRC affects 10% to 15% of patients with CRC- one that is a subtype of colorectal cancer that presents difficulty in treatment.

Therefore, when Array delivered an e-poster presentation at last Friday’s 2017 European Society for Medical Oncology (ESMO) Congress in Madrid, Spain, investors were pleased to see the BEACON trial’s safety lead-in data revealed the firm’s safety objective had been attained, favorable tolerability was in tow, and hints of efficacy were peeking through.

Cantor analyst Mara Goldstein now pinpoints “a bigger market” for binimetinib and encorafenib following the success of the safety lead-in data, which she believes reveals “encouraging signs of the potential to widen the market potential for binimetinib and encorafenib,” adding, “these data lend additional support for the drugs as best-in-class for the treatment of advanced melanoma.”

In reaction, the analyst reiterates an Overweight rating on ARRY stock with a $15 price target, which represents a 42% increase from where the shares last closed. (To watch Goldstein’s track record, click here)

First, Goldstein highlights that the Phase III combination trial data exhibits “a favorable tolerability vs. prior studies of other treatment regimens,” elaborating: “The data (n=29) showed modest side effects compared with other treatment regimens, with 73% of the patients staying on treatment, with no Grade 3/4 adversities occurring with greater than 10% frequency, and dose-limiting toxicities primarily attributable to known adverse events.”

Efficacy is another point of Goldstein’s bullish praise for the stock, as she believes that though the data set was of merely 30 patients, the BEACON trial “revealed compelling glimpses of efficacy with an overall response rate (ORR) of 41%, and 59% in a subset of patients that had one prior line of therapy […]” Notably, both of these ORRs outclassed past benchmarks when combining cetuximab with chemotherapy, cetuximab with encorafenib as well as other pairings of BRAF with MEK inhibitors and even triplet combinations.

So “What’s the opportunity?” asks the analyst, who answers that “BRAF-mutant CRC is a subset of CRC, but with the mutation claiming roughly 10% of the 130,000+ new diagnoses per year, the opportunity is incremental to ARRY, we think.” This bodes well for Array, as if the drug maker can bring about a “successful” trial, it stands to reap another $500 million yearly in sales. Though “the data are very early,” Goldstein is certainly positive on Array’s future opportunity.

Looking ahead, the firm will appear at Cantor’s Global Health Conference at the end of this month.

Wall Street echoes Goldstein’s bullish praise for Array, as TipRanks analytics exhibit ARRY as a Strong Buy. Based on 6 analysts polled by TipRanks in the last 3 months, all 6 rate a Buy on Array stock. The 12-month average price target stands at $13.50, marking a 28% upside from where the stock is currently trading.

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