Last week, Array BioPharma (ARRY) announced that its most advanced, wholly-owned MEK inhibitor, ARRY-162, which was being developed to treat rheumatoid arthritis patients, failed to achieve a better response than placebo in a mid-stage trial.

The study was designed to assess ARRY-162 in 201 patients with active rheumatoid arthritis who were not completely responsive to the drug methotrexate, the standard treatment. The subjects were on a stable dose of methotrexate for at least 6 weeks prior to their entry in the study.

The 12-week study comprised of a placebo group and three different dose groups of ARRY-162. However, none of the treatment groups demonstrated a statistically significant response compared with the placebo group at 12 weeks. The placebo recipients in Latin America displayed much higher placebo response rates than patients in Eastern Europe.

The most common side effects were skin-related rash and diarrhea. The study did not come up with any serious drug-related adverse events. The company intends to present complete results from the study in 2010. ARRY-162 is also being studied for cancer treatment.

Rheumatoid arthritis affects more than two million Americans, and about 1% of the global population. The disease is characterized by inflammation of the joints, swelling, fatigue, stiffness and pain. It can affect other tissues such as the lungs and eyes.

Following the announcement of the negative trial results, the company’s shares dropped sharply. Array BioPharma closed Friday at $2.90 down 23.28%.

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 very early stages of development. This contains high operational risks. Any trial failure is bound to affect its share price adversely.
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