Array Slips Under the Wire with $726 Million Year-End Amgen Deal

(MoneyWatch)  Array BioPharma (ARRY) placed a risky bet at the beginning of the year, scaling back research in order to "accelerate partnering initiatives" and promising investors that it would generate $80 million in partnering revenues by year-end.

Biotech companies are often reluctant to set such firm expectations on business development objectives -- after all, no one can really predict how long a deal will take to close, and your pharma partner could always get gobbled up by another pharma at the last minute (it happened to Crucell when Pfizer bough Wyeth).

For a while, it looked like Array might not achieve its goals. The months ticked by with no partnership in sight, and several of the company's top partnering prospects suffered setbacks. Work on p38 inhibitor ARRY-797 was discontinued in chronic inflammatory diseases, while MEK inhibitor ARRY-162 failed to meet its endpoint in a Phase II rheumatoid arthritis trial.

But if there's one thing Array has plenty of, it's compounds to fall back on. The company also has plenty of partnering experience -- enough, apparently, to hold tight to those promised partnering goals rather than backing off.

And not a month too soon, Array got the job done. The firm signed a $726 million deal with Amgen (AMGN) for glucokinase activator ARRY-403, in Phase I for diabetes. The deal includes $60 million up front, and Array reported another $19.4 million in revenues during the first three calendar quarters of 2009. That puts the annual total at $79.4 million, within spitting distance of the $80 million goal before factoring in the fourth quarter.

So Array can breathe a sigh of relief. For two weeks anyway. Then we get to see what the firm is promising for 2010.