National Editor

Array BioPharma Inc. is following up last month's potential $95 million oncology deal with another focused in the same area - this time with cancer heavyweight Genentech Inc. in an agreement focused on advancing two of Array's programs into clinical development.

Array's stock (NASDAQ:ARRY) jumped $1.82 Tuesday on the news, or 30.2 percent, closing at $7.85.

"We had a pretty good morning," said Robert Conway, CEO of Boulder, Colo.-based Array, noting the company has "now done two significant deals with the two top cancer franchises in the world."

The programs at the center of the Genentech agreement involve unspecified small-molecule leads developed by Array, along with intellectual property related to its drug discovery platform.

Under the terms, Array gets an up-front payment and research funding, with the potential to also receive development milestones and royalties on resulting product sales. Financial details were not disclosed.

The firms will collaborate on the discovery of clinical candidates against two cancer targets, with South San Francisco-based Genentech responsible for clinically developing and commercializing the resulting products.

Genentech has reserved the right to add additional programs to the deal.

Last month's deal with London-based AstraZeneca plc gave the overseas firm rights to develop Array's MEK (mitogen-activated extracellular signal-regulated kinase) program in oncology, along with exclusive worldwide rights to Array's cancer candidate ARRY-142886, as well as rights to certain second-generation compounds for all oncology indications. (See BioWorld Today, Dec. 19, 2003.)

Array has been working its way toward becoming a drug discovery business, moving away from its efforts in chemistry services.

"People bring us a target, and we create a clinical candidate for them, rather than doing libraries or lead optimization," Conway said.

The company's AstraZeneca deal was seen as a vote of confidence for the new direction, and the quick-to-follow Genentech agreement likely boosted investor optimism, Conway said.

"In the last couple of years we've put a bigger emphasis on creating our own intellectual property that we will out-license," he told BioWorld Today. "You look at what big pharma needs," he added - drug candidates to fill their pipelines.

Others using Array's chemistry, biology and informatics technologies include InterMune Inc., of Brisbane, Calif.; Eli Lilly and Co., of Indianapolis; and GenPath Pharmaceuticals Inc., of Cambridge, Mass.