Zacks_Analysts' Blog : Array Seeks Cancer Treatment - Analyst Blog

The open-label, multiple dose study is designed to evaluate the tolerability, safety and efficacy of the inhibitor following the oral administration of the drug to advanced cancer patients with solid tumors on a daily basis. The study is expected to commence in the third quarter of 2009.

Array is also evaluating the candidate for arthritis and chronic obstructive pulmonary disease (COPD). Currently, a worldwide phase II, double-blinded study (n=200) for ARRY-162 with active rheumatoid arthritis is in progress.

We think that Array's decision to evaluate its most advanced MEK inhibitor in the field of cancer will benefit cancer patients immensely. Further, management believes that ARRY-162 is not only well-suited for cancer treatment but possesses significant advantages over other MEK inhibitors currently in development, including greater potency, and improved safety and pharmacokinetics.

In addition to its proprietary pipeline, the company has entered into collaborations with leading pharmaceutical and biotechnology companies like AstraZeneca (AZN) and Celgene Corporation (CELG). However, we are concerned about all of Array's R&D programs being in a very early stage of development. This contains high operational risks. Any trial failure(s) is bound to affect its share price adversely. It has no product in the market and, given the early-stage of its pipeline, an Array product hitting the market looks like a distant possibility.

The company is currently seeking to enter new drug discovery collaborations, which will provide research funds. We have a Hold rating on the company's shares since Array possesses a higher risk profile than most investors may be interested in undertaking due to its early-stage pipeline, and its reliance on third-party clinical support.