Pfizer made a surprise announcement stating that it is buying Array BioPharma Inc.
On Monday, Pfizer, the big drugmaker has announced that it is paying $48 for each share of Array. The amount stated is 63 percent above the closing price of Array on Friday. The total price stated is $11.4 billion.
Shares of Array shot up in early trade on Monday.
With the acquisition, Pfizer hopes to get some good benefits. Braftovi and Mektovi are two promising drugs that have received approval for the treatment of metastatic melanoma. In addition, there are 30 other ongoing clinical trials that have massive potential for expansion.
These two drugs alone had contributed almost $35.1 million in sales for Array during its third fiscal quarter, which is much above expectations from Wall Street analysts. Further, the two drugs have reported positive to treat colorectal BRAF-mutant cancer too.
Also known as Braftovi triplet the drug shows overall survival is good, compared to chemotherapy. Array continues to generate substantial sales and has a massive pipeline.
However, the Array acquisition will not bring in a positive financial difference to Pfizer until 2022 at least, says the company.
Pfizer is still new to the oncology sector. It expects a lot of contribution from the Bavencio and Talzenna drugs from Array. The move to acquire Array was towards long-term growth, says Pfizer.
After the announcement of the acquisition by Pfizer Inc., other cancer-therapy company prices shot up too. Prices of Incyte Corp saw a rise of 5.31 percent. Lovance Biotherapeutics Inc shares went up 13 percent. Turning Point Therapeutics Inc saw a rise of 12.6 percent.
Array CEO Ron Squarer says the company is proud that Pfizer recognizes the role played by Array towards advancing the lives of critical patients.
Pfizer will finance the acquisition through cash payment and the remaining by raising debt. The company intends to advance into the oncology unit through its business acquisition.