Array Biopharma's 12% Drop, Explained

Shares of Array Biopharma Inc (NASDAQ: ARRY), a biopharmaceutical company that focuses on drugs to treat patients suffering from cancer, lost more than 12 percent early Monday morning after announcing a disappointing update to one of its therapies.

Array Biopharma announced in a press release that the new drug application (NDA) for its binimetinib monotherapy for the treatment of a rare subset of skin cancer has been withdrawn from the U.S. Food and Drug Administration's (FDA) Division of Oncology Products 2 (DOP2).

Array BioPharma saw its stock soar more than 80 percent in one day in September of 2016 after announcing encouraging results from its late-stage skin cancer drug. Specifically, the median PFS for patients treated with a combination of encorafenib plus binimetinib was 14.9 months versus 7.3 months for patients treated with vemurafenib.

Withdrawing NDA

Array Biopharma's press release on Monday noted that its decision to withdraw its NDA was based on discussions and communications with the FDA, including a late cycle review meeting which was held on Friday.

Based on the discussions with the FDA, Array BioPharma's management concluded that the benefits demonstrated in an ongoing Phase 3 clinical trial called NEMO isn't strong enough to support approval of the therapy.

Nevertheless, ongoing clinical trials for the aforementioned binimetinib in combination with encorafenib will proceed as planned with Phase 3 results on track to be delivered in mid-2017.

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