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Array BioPharma Reports Financial Results for the Second Quarter of Fiscal 2009

BOULDER, Colo.--(BUSINESS WIRE)-- Array BioPharma Inc. (NASDAQ: ARRY) today reported financial results for the second quarter of the Company’s 2009 fiscal year ending December 31, 2008.

FINANCIAL RESULTS

Array reported revenue of $7.7 million for the second quarter of fiscal 2009, compared to revenue of $8.4 million for the same period in fiscal 2008. Array invested $23.7 million in research and development for the quarter to advance its eight wholly-owned drugs in clinical development and select discovery programs. This compares to $20.5 million invested in research and development during the same quarter of fiscal 2008. Array reported a net loss of $37.8 million, or ($0.79) per share, for the second quarter, compared to a net loss of $20.4 million, or ($0.43) per share, for the same quarter in fiscal 2008. The second quarter of fiscal 2009 loss included $10.5 million or $0.22 per share loss due to a mark-to-market write-down of auction rate securities. Array ended the second quarter of fiscal 2009 with $100.0 million in cash, cash equivalents and marketable securities.

Array reported revenue of $13.4 million for the six-month period ended December 31, 2008, compared to revenue of $15.0 million for the same period in fiscal 2008. Net loss for the six months ended December 31, 2008, was $71.5 million, or ($1.50) per share, compared to a net loss of $39.4 million, or ($0.84) per share, reported in the same six-month period in fiscal 2008.

SUMMARY OF RECENT PROGRESS

“Over the past month, we put in place multiple measures to conserve capital and focus our resources on advancing eight promising clinical programs in cancer, inflammation and diabetes through clinical proof of concept,” said Robert E. Conway, Chief Executive Officer. “We anticipate having proof of concept or Phase 1 clinical results on all eight of our clinical programs in 2009. We also announced three exciting discovery programs, one or more of which could advance into clinical development this year.”

Initiating clinical development of a novel glucokinase activator for Type II diabetes

During the first quarter of calendar 2009, Array plans to initiate Phase 1 clinical development with ARRY-403, a novel glucokinase activator. At a recent scientific meeting, Array reported that ARRY-403 demonstrates potent, highly glucose-blood-level dependent control of both fasting and non-fasting glucose concentrations.

Advancing programs for the treatment of chronic inflammatory disease and pain

Array initiated a worldwide, 170-patient, 12-week Phase 2 clinical trial with ARRY-797, a p38 inhibitor, in patients with ankylosing spondylitis and continued a dose escalation trial with ARRY-797 to test tolerability of up to 1200 mg daily in a sub-chronic setting for 7 days. Array is also on track with recruitment of a 28-day Phase 1b trial of ARRY-797 in patients with stable rheumatoid arthritis taking methotrexate. Array announced the achievement of both the primary and secondary endpoints from a 250-patient Phase 2 acute inflammatory dental pain study evaluating the analgesic efficacy of ARRY-797 at the 2008 ACR/ARHP Annual Scientific Meeting.

Array’s MEK inhibitor for inflammation, ARRY-162, continued a worldwide, 200-patient, 12-week Phase 2 trial with ARRY-162 added to methotrexate in patients with rheumatoid arthritis. Over 100 patients have been enrolled to date and complete enrollment is expected in the first quarter of calendar 2009.

Array initiated dosing ARRY-300, a targeted small molecule MEK inhibitor, in a Phase 1 clinical trial. The Phase 1 clinical trial is a randomized, single-blind, placebo-controlled, single-ascending dose study to evaluate the safety, pharmacokinetics and pharmacodynamics of ARRY-300 in healthy volunteers.

Progressing four novel clinical candidates for cancer

Array is in the process of initiating sites in a Phase 1b/2 trial of ARRY-520, a novel KSP inhibitor, in patients with multiple myeloma. Array is continuing a Phase 1 trial of ARRY-520 in patients with solid tumors and a Phase 1b/2 trial of ARRY-520 in patients with acute myelogenous leukemia (AML).

Array is planning a Phase 1b trial of ARRY-614, our p38/Tie-2 inhibitor, in patients with myelodysplastic syndromes (MDS) to determine the safety, maximum tolerated dose, pharmacokinetics and preliminary estimates of efficacy of the compound in this patient population. This study is expected to begin during the second quarter 2009. Array recently completed a Phase 1 clinical trial with ARRY-614 in a single and multiple dose escalation study in healthy volunteers for safety, tolerability, exposure and inhibition of mechanism related biomarkers.

Array continued a Phase 1b expansion trial for ARRY-543, our ErbB-2/EGFR inhibitor. Half of the patients in this trial have trastuzumab-resistant ErbB2-positive metastatic breast cancer and half of the patients have other ErbB-family-driven cancers. Results from this trial are anticipated in the first half of 2009. Array is also continuing a Phase 1b trial of ARRY-543 in combination with Xeloda® (capecitabine) in patients with solid tumors. Array anticipates initiating two additional Phase 1b trials, in combination with Taxotere® (docetaxel) and Gemzar® (gemcitabine), respectively, in the first half of calendar 2009.

Recruitment in a Phase 1 safety trial of ARRY-380, a selective, oral ErbB-2 inhibitor, remains on track. This trial is expected to be complete in 2009.

Unveiling three discovery programs

At the JP Morgan Healthcare conference, Array disclosed three discovery candidates:

  • Chk-1 -- a first in class, selective, oral inhibitor for the treatment of cancer;
  • Trk -- a first in class, selective, oral inhibitor for the treatment of pain; and
  • PDGFR -- a best in class, selective, oral inhibitor for the treatment of fibrosis.

Secured a milestone payment on one of Array’s many partnered programs

Array received a $1 million milestone payment from VentiRx for VTX-2337, a toll-like receptor agonist, entering Phase 1 clinical development for the treatment of cancer. Array licensed its toll-like receptor program to VentiRx in 2007 and retains the option to acquire a 50% ownership position in all clinical oncology products developed under this agreement.

FINANCIAL GUIDANCE

In early January 2009, Array announced plans to accelerate partnering initiatives and to scale back discovery research spending over the next 24 months. During calendar 2009, Array expects to reduce net cash used in operating activities from the previously planned $30 million per quarter to approximately $20 million per quarter, before new partner or milestone payments.

CONFERENCE CALL DETAILS

Array will hold a conference call on Tuesday, February 3, 2009, at 9:00 a.m. eastern time to discuss these results. Robert E. Conway, Chief Executive Officer, and Michael Carruthers, Chief Financial Officer, will lead the call.

Conference Call Information

Date:

Tuesday, February 3, 2009

Time:

9:00 a.m. eastern time

Toll-Free:

877-856-1960

Toll:

719-325-4787

Pass Code:

2036041

Web Cast:

www.arraybiopharma.com

A replay of the call will be available as a webcast on www.arraybiopharma.com and by phone for one week by dialing toll-free (888) 203-1112 or (719) 457-0820. The access code is 2036041.

About Array BioPharma

Array BioPharma Inc. is a biopharmaceutical company focused on the discovery, development and commercialization of targeted small molecule drugs to treat patients afflicted with cancer, inflammatory and metabolic diseases. Our proprietary drug development pipeline includes clinical candidates that are designed to regulate therapeutically important target proteins and are aimed at significant unmet medical needs. In addition, leading pharmaceutical and biotechnology companies collaborate with Array to discover and develop drug candidates across a broad range of therapeutic areas. For more information on Array, please go to www.arraybiopharma.com.

Forward-Looking Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our future plans for advancing certain of our proprietary drug programs, the potential to earn future milestone payments, license fees or royalty revenue, and the plans of our collaborators to further develop drugs we have out-licensed or on which we are collaborating. These statements involve significant risks and uncertainties, including those discussed in our annual report filed on form 10-K for the year ended June 30, 2008, and in other reports filed by Array with the Securities and Exchange Commission. Because these statements reflect our current expectations concerning future events, our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors. These factors include, but are not limited to, our ability to continue to fund and successfully progress internal research efforts and to create effective, commercially viable drugs, our ability to achieve and maintain profitability, the extent to which the pharmaceutical and biotechnology industries are willing to in-license drug candidates for their product pipelines and to collaborate with and fund third parties on their drug discovery activities, our ability to out-license our proprietary candidates on favorable terms, risks associated with our dependence on our collaborators for the clinical development and commercialization of our out-licensed drug candidates, the ability of our collaborators and of Array to meet objectives tied to milestones and royalties, and our ability to attract and retain experienced scientists and management. We are providing this information as of February 2, 2009. We undertake no duty to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements or of anticipated or unanticipated events that alter any assumptions underlying such statements.

Array BioPharma Inc.
Condensed Statements of Operations
(in thousands, except per share amounts)
(Unaudited)

       
Three Months Ended Six Months Ended

December 31,

December 31,
  2008     2007     2008     2007  
Revenue:
Collaboration revenue $ 5,041 $ 5,634 $ 9,278 $ 11,255
License and milestone revenue   2,648     2,784     4,158     3,756  
Total revenue 7,689 8,418 13,436 15,011
 
Operating expenses
Cost of revenue 5,063 5,240 10,183 10,553
Research and development for proprietary

drug discovery

23,709 20,548 48,218 38,167
General and administrative   4,480     4,830     8,974     9,207  
Total operating expenses   33,252     30,618     67,375     57,927  
 
Loss from operations (25,563 ) (22,200 ) (53,939 ) (42,916 )
 
Impairment of marketable securities (10,452 ) - (14,362 ) -
Interest income 533 2,032 1,413 3,939
Interest expense   (2,336 )   (219 )   (4,616 )   (464 )
Net loss $ (37,818 ) $ (20,387 ) $ (71,504 ) $ (39,441 )
 
Basic and diluted net loss per share $ (0.79 ) $ (0.43 ) $ (1.50 ) $ (0.84 )
Number of shares used to compute per share data   47,605     47,174     47,589     47,142  
 
Summary Balance Sheet Data
(in thousands)
   
December 31, June 30,
2008 2008
 
Cash, cash equivalents and marketable securities $ 99,954 $ 125,531
Property, plant and equipment, gross 83,018 81,966
Working capital 54,265 66,346
Total assets 136,467 163,077
Long-term debt 78,844 35,355

Stockholders' (deficit) equity

(26,979 ) 38,027

Source: Array BioPharma Inc.

Array BioPharma Inc.
Tricia Haugeto, 303-386-1193
thaugeto@arraybiopharma.com