Last week, Array BioPharma Inc. (ARRY) reported a fourth-quarter net loss of 55 cents per share which was in line with the Zacks Consensus Estimate. The company had a loss of 68 cents in the year-ago quarter. Net loss for fiscal 2009 was $2.67 per share, compared with $2.04 last year.

Quarterly revenue came in at $5.5 million, representing a 10% decline from the comparable quarter in 2008. Sales for the full year fell by 13% to $25 million.

The narrower quarterly loss was primarily attributable to lower spending on research and development. The company spent $21.3 million towards research and development for the quarter for the clinical advancement of its wholly owned drugs versus $28.4 million in year-ago quarter.

Last January, Array had announced a restructuring plan of scaling down its research and development costs and accelerating partnership initiatives to ensure sustainable growth under current market conditions.

The company’s proprietary pipeline is primarily directed at drugs to treat cancer, inflammatory and metabolic diseases. It also collaborates with leading pharmaceutical and biotechnology companies like Celgene Corp. (CELG), AstraZeneca Plc (AZN) and Genentech to discover and develop drug candidates across a broad range of therapeutic areas.

Array also announced on the same day that its diabetes drug, ARRY-403, met the main goals of an early-stage trial. The drug, studied in 41 type-2 diabetes patients satisfied the primary and secondary goals of safety, pharmacokinetics and glucose control. Array is planning to initiate a new study in type 2 diabetes patients to evaluate the effects of the drug over a 10-day period.

The type-2 diabetes market has strong growth potential, with Decision Resources projecting a jump from $15.3 billion in 2008 to $27.8 billion in the U.S., the European Union and Japan in 2018. Growth will be driven primarily by expanding drug-treated population and launching several novel agents.

Array possesses an intriguing pipeline for cancer, inflammatory and metabolic diseases. However, given that most products are early-stage and the company relies on third-party clinical support, Array possesses a higher risk profile than most investors may be interested in undertaking.

Read the full analyst report on “ARRY”
Read the full analyst report on “CELG”
Read the full analyst report on “AZN”
Zacks Investment Research