Pfizer, the firm behind prescription drugs from anxiety medication Zoloft to Viagra, agreed Monday to pay $11.4 billion for Array BioPharma and its cutting-edge treatments for colon and rectal cancers.
The Boulder, Colo.-based target’s portfolio includes the combination of Braftovi and Mektovi, drugs used for skin cancers that spread from one part of the body to another that are now being tested on colorectal tumors in more than two dozen clinical trials.
Colorectal cancer is the third most common type of cancer for both men and women, with an estimated 145,000 new diagnoses this year and 51,000 deaths, according to the U.S. government’s National Cancer Institute. The disease accounts for 8.4% of all cancer fatalities, and approximately $16.6 billion was spent on treating it in 2018.
Pfizer’s agreement with Array BioPharma “has the potential to deliver breakthrough medicines that change patients’ lives and enhances our long-term growth prospects,” Andy Schmeltz, president of Pfizer Oncology, told investors Monday.
A Braftovi-Mektovi treatment for colorectal cancer may be a “first and best-in-class combination that could have blockbuster revenue potential,” he added. “This will further augment our existing leading positions in both breast cancer and prostate cancer.”
Going forward, executives said, Pfizer is focused on expanding through smaller acquisitions, some of which add particular strengths, rather than larger transformative mergers. Array specializes in so-called small-molecule medicines, which can penetrate human cells more easily than drugs and then attack cancers.
“We don’t see a need to do a big deal,” Chief Financial Officer Frank D’Amelio told investors. “You’ll see us continuing to do bolt-ons.”
Pfizer expects to finance the purchase, which will begin to boost earnings in 2022, with debt and existing cash. If regulators approve, executives said the merger should be completed before the end of the year.
“We are incredibly proud that Pfizer has recognized the value Array has brought to patients,” said Array CEO Ron Squarer. “We’re excited our team will have access to world-class resources and a broader research platform to continue this critical work.”
The transaction continues a trend of broader consolidation in the pharmaceutical industry. Earlier this year, Eli Lilly and Co. agreed to buy Loxo Oncology for $6.6 billion, and Bristol-Myers Squibb announced its purchase of Celgene for $74 billion.
