Array BioPharma, based in Boulder, Colo., has reached a definitive agreement with Novartis Pharma to acquire worldwide rights to encorafenib (LGX818), a BRAF inhibitor currently in phase III development. This agreement is conditional on the closing of transactions announced by Novartis and GlaxoSmithKline on April 22, 2014, which are expected to close in the first half of 2015, and the agreement remains subject to the receipt of regulatory approvals.

Array previously announced a definitive agreement with Novartis to regain global rights to the phase III MEK inhibitor binimetinib, the material terms of which remain in place following this agreement. In order to address competition concerns raised by the European Commission, Array has agreed to obtain an experienced partner for global development and European commercialization of both binimetinib and encorafenib. The E.C. is expected to issue a decision regarding the Novartis-GSK transaction on Jan. 28.

"Acquiring worldwide rights to encorafenib, an innovative late-stage oncology product, represents a tremendous opportunity for Array," said Ron Squarer, CEO, Array BioPharma. "There currently are 11 active encorafenib clinical trials, including the phase III COLUMBUS trial in which encorafenib is being studied in combination with binimetinib for BRAF+ melanoma patients. With rights to both encorafenib and binimetinib, Array would enhance its position to broadly develop and commercialize each product, as well as this MEK/BRAF combination, which may have differentiating advantages when compared to available therapies."

Novartis has agreed to provide transitional regulatory, clinical development and manufacturing services and will assign or license to Array all patent and other intellectual property rights Novartis owns to the extent relating to encorafenib. 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. There are no milestone payments or royalties payable under this agreement by either party.

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 for 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 Array's FTE costs in connection with completing the trials.

Novartis will supply encorafenib for clinical and commercial use for up to 30 months after closing and also will assist Array in the technology and manufacturing transfer of encorafenib. Novartis also 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. The effectiveness of the agreement is subject to the receipt of regulatory approvals and to the consummation of the Novartis-GSK transaction.

In addition, Array agreed to undertake to obtain certain third party consents or waivers necessary for Array to consummate the transactions under the Novartis agreement.