- Array BioPharma's board rejected an initial $44-per-share buyout offer Pfizer made on May 29, saying it was too low for Array to commit to the June 17 announcement timeline that Pfizer sought, a regulatory notice filed Friday by the biotech showed.
- Pfizer's final knockout offer of $48 a share was contingent on the June 17 announcement date and Array not seeking any additional offers.
- Array is the third public targeted oncology company to be acquired in the last seven months for which only one serious bidder emerged. The others were Tesaro and Loxo Oncology, bought by GlaxoSmithKline and Eli Lilly, respectively.
Investors in Clovis Oncology, Exelixis, Agios, Blueprint Medicines and Turning Point beware: There may not be a bidding war for your companies.
The last three deals for companies specializing in kinase inhibition were relatively non-competitive, with Pfizer appearing as the only on-the-record bidder for the Array acquisition announced on June 17.
The good news for investors in these still-independent companies is that when a single big pharma comes knocking, a deal can be wrapped up swiftly, cleanly, and at a considerable premium, if the last three are any indication.
Details of Array's path to acquisition were revealed in a Securities and Exchange Commission document filed Friday.
The New York-based big pharma had been in discussions with Array's executive team as early as January 2017 about the potential for an acquisition or collaboration. Pfizer was one of four companies involved in discussions with Array, based largely around data from the COLUMBUS trial of Array's Braftovi (encorafenib)/Mektovi (binimetinib) in melanoma.
In October 2018, the CEO of a global pharma group referred to as "Party A" made a proposal for a cash and shares deal to Array CEO Ron Squarer. No specific economic terms were discussed and, following a subsequent presentation by Array's strategic adviser Centerview Partners, Array's board decided to pass on a formal sale process.
In early November, the CEO of Party A told Squarer that it continued to be interested in acquiring Array, but did not discuss economic terms.
Discussions with Pfizer intensified in December, and a second potential bidder, Party B, also emerged, seeking to review data. The results of the BEACON-CRC trial of Braftovi/Mektovi and Erbitux (cetuximab), announced May 21, kicked the Pfizer talks into high gear, and eight days later Pfizer CEO Albert Bourla made the initial $44-a-share offer.
The final $48-a-share offer was at a 62% premium to the closing price the day before Bourla's initial offer and 110% premium to the pre-BEACON-CRC share price. The total price of the deal was $11.4 billion.
For the rest of the sector, the paucity of formal bidders doesn't necessarily mean a lack of interest, SVB Leerink analyst Thomas Smith wrote in a July 1 note to clients.
"While some investors may be disappointed that there was not an overt bidding war for Array, the documents suggest that Pfizer was proactively willing to pay a substantial premium that exceeded Array's threshold, even in the absence of a competitive process," he wrote.
In an environment where everybody is buying and everybody is for sale, deals can happen for oncology companies that have proven the value of their pipeline.