Array BioPharma has completed both the binimetinib and encorafenib definitive agreements with Novartis. Along with global ownership of both assets, Array will receive an upfront payment of $85 million from Novartis.
Ron Squarer, CEO of Array, said, "With the close of the Novartis-GSK transaction, Array now owns both binimetinib and encorafenib, two innovative oncology products in phase III, with plans for regulatory submissions in 2016. These transformative transactions have accelerated our path to commercialization and provide us with the opportunity to develop two potentially broadly active products in a number of indications."
Array also announced Andrew Robbins, Array's senior vice president of commercial operations, has been appointed chief operating officer, with responsibility for sales, marketing, manufacturing and business development activities at Array. In this expanded role, Robbins will be instrumental in ensuring successful commercialization of binimetinib and encorafenib. Dr. David Snitman, chief operating officer, intends to retire at the end of June 2015. Until that time, Snitman will work as executive vice president of business development.
Effective March 2, Novartis' global, exclusive license to binimetinib terminated with all rights reverting to Array, and Array received global rights to encorafenib. Array will receive an $85 million upfront payment from Novartis and reimbursement for certain transaction-related expenses.
Novartis will provide transitional regulatory, clinical development and manufacturing services as specified below and will assign or license to Array patent and other intellectual property rights it owns to the extent they relate to binimetinib and encorafenib. All clinical trials involving binimetinib and encorafenib currently sponsored by Novartis or Array, including three pivotal trials, COLUMBUS (BRAF-mutant melanoma/NCT01909453), NEMO (NRAS-mutant melanoma/NCT01763164), and MILO (low-grade serous ovarian cancer/NCT01849874), will continue to be conducted as currently contemplated.
Other than a de minimis payment to Novartis from Array, there are no milestone payments or royalties payable between the parties under the encorafenib agreement. As part of the transactions, Array has agreed to obtain an experienced partner for global development and European commercialization of both binimetinib and encorafenib. If Array is unable to find a suitable partner in the prescribed time period, a trustee would have the right to sell such European rights. Array entered into a third party agreement necessary to complete the transactions. Net consideration Array agreed to pay amounts to $25 million.
Novartis will conduct and fund the COLUMBUS trial through the earlier of June 30, 2016 or completion of last patient first visit. At that time, Array will assume responsibility for the trial, while Novartis will reimburse Array's out-of-pocket costs along with 50% of Array's full time equivalent (FTE) costs in connection with completing the COLUMBUS trial. Novartis is responsible for conducting all other encorafenib trials until their completion or transfer to Array for a defined transition period. For all trials transferred to Array, Novartis will reimburse Array for out-of-pocket costs and 50% of FTE costs in connection with completing the trials.
Novartis will reimburse Array for all remaining out-of-pocket expenses and half of all remaining FTE costs associated with MILO, which Array will continue to conduct. For NEMO and all other ongoing and planned clinical trials for binimetinib (other than COLUMBUS, as described above), Novartis will conduct and solely fund each trial, until a mutually agreed-upon transition date to Array. Following this transition, Novartis will reimburse Array for all remaining out-of-pocket expenses and half of all remaining FTE costs required to complete these studies.
Novartis will remain responsible for conducting and funding development of the NRAS melanoma companion diagnostic until premarket approval is received from the FDA. Following approval, Novartis will transfer the product and premarket approval to a diagnostic vendor of Array's designation.
Novartis also retains binimetinib and encorafenib supply obligations for all clinical and commercial needs for up to 30 months after closing and will also assist Array in the technology and manufacturing transfer of binimetinib and encorafenib. Novartis will provide Array continued access to several Novartis pipeline compounds for use in currently ongoing combination studies, and possible future studies, including phase III trials, with encorafenib and binimetinib.