Cowen Bets on Array BioPharma (ARRY) Ahead of Upcoming PDUFA Date


Array Biopharma (NASDAQ:ARRY) shares started the day lower in the wake of disappointing results from competitor Exelixis (NASDAQ:EXEL). Exelixis announced that its metastatic colorectal cancer (mCRC) treatment did not meet its primary endpoint in the IMblaze370 phase 3 pivotal trial. However, the shares quickly rebounded to around the $14.50 mark.

Cowen analyst Chris Shibutani noted, “Cautious investor sentiment regarding prospects for IO combination studies in MSS CRC has created an especially attractive buying opportunity in ARRY shares in our view. We expect approval of ARRY’s best-in-class MEK/BRAF combination, and see multiple opportunities for upside, particularly from recent depressed levels, regardless of the outcome of competitors’ IMBLAZE370 readout.”

Shibutani continues to see a favorable risk/reward profile on Array heading into the June 30th action date for binimetinib/encorafenib in BRAF-mutant advanced, unresectable or metastatic melanoma.

Shibutani wrote, “Our KOL consultants have viewed bini/enco’s efficacy and tolerability profile as a highly attractive offering within an already strongly growing market, currently annualizing at $400MM in the US and close to $1B run-rate WW. As the third entrant to the BRAF-mutant melanoma market (behind segment leader Novartis, and Roche), management reiterated their prudent admonition to the Street that even with a best-in-class profile, expectations regarding the pace of the initial launch should be realistic. The best-in-class profile, though, has prompted our KOL consultants to see potential for upside to our current 45% peak share estimate for ARRY. We also see potential for COMBO450 to drive market expansion, given the potential for tolerability advantages to drive longer duration of use.”

As such, Shibutani reiterates an Outperform rating on Array shares with a $19.00 price target, which implies about 30% from current levels. (To watch Shibutani’s track record, click here)

Wall Street agrees with Shibutani that this drug maker is one to watch, as TipRanks analytics exhibit ARRY as a Strong Buy. Out of 4 analysts polled in the last 3 months, all 4 are bullish on Array stock. With a return potential of 40%, the stock’s consensus target price stands at $20.33.

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