Array Biopharma (ARRY) Stock Rockets On Acquisition News

Array Biopharma ARRY Stock News

Array Biopharma Inc (NASDAQ: ARRY) is up nearly 60% in the pre-market hours this morning after the company announced that it would be acquired. In a deal valued at more than 11 billion Pfizer Inc. (NYSE: PFE) will be taking the company over to broaden its cancer drug horizons.

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PFE To Acquire ARRY

As mentioned above, Pfizer and Array Biopharma announced this morning that the two have reached a definitive acquisition agreement. Under the terms of the agreement, Pfizer will acquire Array at a price of $48 per share. This gives ARRY a total enterprise value of about $11.4 billion.

The move by Pfizer was made in an attempt to broaden its cancer drug portfolio. After all, ARRY brings with it the combination treatment of BRAFTOVI and METOVI for the treatment of melanoma. Pfizer says that it believes that the combination therapy has significant potential for long-term growth through expansion into additional areas of unmet medical need as studies continue in other solid tumor indications.

ARRY also brings a broad pipeline of targeted cancer medications under development to the table. The comapny also has various out-licensed treatments that Pfizer believes will generate significant royalty revenues ahead.

In a statement, Albert Bouria, CEO at PFE, had the following to offer:

Today’s announcement reinforces our commitment to deploy our capital to bring breakthroughs that change patients’ lives while creating shareholder value. The proposed acquisition of Array strengthens our innovative biopharmaceutical business, is expected to enhance its long-term growth trajectory, and sets the stage to create a potentially industry-leading franchise for colorectal cancer alongside Pfizer’s existing expertise in breast and prostate cancers.

The above statement was followed up by Ron Squarer, CEO at ARRY. Here’s what he had to offer:

We are incredibly proud that Pfizer has recognized the value Array has brought to patients and our remarkable legacy discovering and advancing molecules with great potential to impact and extend the lives of patients in critical need.

Pfizer shares our commitment to patients and a passion for advancing science to develop even more options for individuals with unmet needs. We’re excited our team will have access to world-class resources and a broader research platform to continue this critical work.

Transaction Details

In the release, the companies said that once the transaction closes, employees of Array Biopharma will join the Pfizer teem. However, they will continue to wor in the locations that they are familiar with.

In terms of financing, PFE siad that it plans on financing the majority of the transaction with debt, covering the rest of the transaction with cash on hand. The company said that it expects for the transaction to be a dilutive one, diluting EPS by between four and five cents in both 2019 and 2020, with the transaction becoming neutral in 2021.

However, the company expects for additional accretion and growth to take place following 2021. PFE also said that it will update its current 2019 guidance in conjunction with its third quarter earnings release following the ARRY acquisition.

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What Do You Think?

What are your thoughts on the acquisition of ARRY by PFE? Join the discussion in the comments below!

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