Dear Shareholders,

I am pleased to share the progress we have made over the past year in advancing our clinical pipeline towards commercialization. Most recently, New Drug Applications (NDAs) and Marketing Authorization Applications for our lead programs, encorafenib, a BRAF inhibitor, and binimetinib, a MEK inhibitor, have been accepted and validated for review by the U.S. Food and Drug Administration (FDA) and European Medicines Agency (EMA), respectively, based on the strength of data from our global Phase 3 COLUMBUS trial in BRAF-mutant melanoma patients. The FDA set a target action date under the Prescription Drug User Fee Act (PDUFA) of June 30, 2018 for both applications. In addition, the FDA informed Array that based on their preliminary review of the applications they have not identified any potential review issues, and that they are not currently planning to hold an advisory committee meeting to discuss these NDAs. We look forward to working with the FDA and EMA as they review our applications.


BRAF-mutant Melanoma / COLUMBUS Trial Results

The results of the COLUMBUS trial were, in our view, quite remarkable, not only in treatment effect size but also in the tolerability profile. In Part 1, the combination of binimetinib 45 mg twice daily and encorafenib 450 mg once daily (COMBO450) significantly extended progression free survival (PFS) in patients with advanced BRAF-mutant melanoma, with a PFS of 14.9 months compared with 7.3 months observed with vemurafenib. As part of the trial design, the primary analysis was based on a Blinded Independent Central Review (BICR) of patient scans, while results by local review at the investigative site were also analyzed. The table below outlines the median PFS (mPFS) results, as determined by both assessments, for COMBO450 versus vemurafenib, COMBO450 versus encorafenib, and encorafenib versus vemurafenib:

COMBO450 vs. Vemurafenib mPFS BICR mPFS Local Review
COMBO450 Vemurafenib COMBO450 Vemurafenib
14.9 months 7.3 months 14.8 months 7.3 months
HR (95% CI): 0.54 (0.41-0.71); P<0.001 HR (95% CI): 0.49 (0.37-0.64); P<0.001
COMBO450 vs. Encorafenib mPFS BICR mPFS Local Review
COMBO450 Encorafenib COMBO450 Encorafenib
14.9 months 9.6 months 14.8 months 9.2 months
HR (95% CI): 0.75 (0.56-1.00); P=0.051 HR (95% CI): 0.68 (0.52-0.90); P=0.006
Encorafenib vs. Vemurafenib mPFS BICR mPFS Local Review
Encorafenib Vemurafenib Encorafenib Vemurafenib
9.6 months 7.3 months 9.2 months 7.3 months
HR (95% CI): 0.68 (0.52-0.90); P=0.007 HR (95% CI): 0.70 (0.54-0.91); P=0.008

In this study, COMBO450 was generally well-tolerated, with a median duration of treatment of 51 weeks and median relative dose intensity for encorafenib and binimetinib of 100% and 99.6%, respectively. Grade 3/4 adverse events (AEs) that occurred in more than 5% of patients receiving COMBO450 were increased gamma-glutamyltransferase (GGT) (9%), increased blood creatine phosphokinase (CK) (7%) and hypertension (6%). The incidence of selected any grade AEs of special interest, defined based on toxicities commonly associated with commercially available MEK+BRAF-inhibitor treatments for patients receiving COMBO450 included: rash (23%), pyrexia (18%), retinal pigment epithelial detachment (13%) and photosensitivity (5%). Full results of COLUMBUS Part 1 were presented at the Society for Melanoma Research 2016 Annual Congress (SMR).

COLUMBUS Part 2 was designed specifically to measure the contribution of binimetinib to the combination of binimetinib and encorafenib by holding the dose of encorafenib at 300 mg in both arms. In COLUMBUS Part 2, the primary analysis compared PFS in patients treated with binimetinib 45 mg twice daily plus encorafenib 300 mg daily (COMBO300) to patients treated with encorafenib 300 mg daily as a single agent. The mPFS for patients treated with COMBO300 was 12.9 months compared to 9.2 months for patients treated with single agent encorafenib, with HR of 0.77 [95% CI 0.61-0.97, p=0.029]. COMBO300 was generally well-tolerated and reported dose intensity and AEs were consistent with COMBO450 results in COLUMBUS Part 1. Grade 3/4 AEs that occurred in 5% or more of patients receiving COMBO300 were increased GGT (5%), increased CK (5%) and increased alanine aminotransferase (ALT) (5%). The incidence of selected any grade AEs of special interest, defined based on toxicities commonly associated with commercially available MEK+BRAF-inhibitor treatments for patients receiving COMBO300 included: pyrexia (17%), rash (15%), retinal pigment epithelial detachment (9%) and photosensitivity (2%). Full results of COLUMBUS Part 2 were presented at the European Society for Medical Oncology 2017 Congress (2017 ESMO) earlier this month.

BRAF-mutant Colorectal Cancer / BEACON CRC Trial

BEACON CRC continues to be an important part of our development strategy. The study is a global Phase 3 clinical trial in patients with BRAF-mutant colorectal cancer, assessing the efficacy of encorafenib and cetuximab, with or without binimetinib, in comparison to cetuximab and irinotecan-based therapy. BRAF-mutant colorectal cancer represents a difficult-to-treat subtype of colorectal cancer that impacts 10 to 15% of colorectal cancer patients.

The primary endpoint of the trial is overall survival (OS) of the triplet therapy, compared to the control arm. Secondary endpoints include an OS comparison of the doublet therapy to the control arm, and of the triplet therapy to the doublet therapy. The study includes a 30-patient safety lead‐in phase to establish combinability of the agents in the triplet therapy. Impressive results from the safety lead-in were presented at 2017 ESMO.

As of August 9, 2017, 30 patients were treated in the safety lead-in and received the triplet combination of binimetinib, encorafenib and cetuximab (BINI 45 mg twice daily, ENCO 300 mg daily and CETUX per label). Out of the 30 patients, 29 had a BRAFV600E mutation. Microsatellite instability-high (MSI-H) (resulting from defective DNA mismatch repair) was detected in only one patient. The triplet demonstrated good tolerability, supporting initiation of the randomized portion of the study. In addition, promising initial clinical activity was observed, with a confirmed overall response rate (ORR) of 41% in patients with the BRAFV600E mutation, a group of patients with historically poor outcomes. The observed ORR was 59% in the 17 patients with the BRAFV600E mutation with only one prior therapy. Out of 28 patients with both a BRAFV600E mutation and a post-baseline assessment, 27 showed tumor regression. These results are unprecedented for this patient population based on existing standards of care.

In the safety lead-in, the triplet combination was generally well-tolerated. The most common grade 3 or 4 AEs seen in at least 10% of patients were nausea (10%), vomiting (10%), increased blood creatine kinase (10%) and urinary tract infection (10%). Three patients discontinued treatment due to AEs with only one considered related to treatment. At the time of the analysis, 76% of patients remain on study treatment after a median duration of treatment of 5.6 months (range 1.0 - 9.3 months).

BEACON CRC was initiated based on results from a Phase 2 study which included the combination of encorafenib and cetuximab in 50 patients with advanced BRAF-mutant CRC, and presented at the 2016 ASCO annual meeting. In this arm, median Overall Survival for these patients exceeded one year, which is more than double several separate historical standard of care published benchmarks for this population. The objective response rate (ORR) was 22 percent; historical published benchmarks in this patient population using standard of care regimens range between 4 percent to 8 percent.

MEK/PD-1 Collaborations with Merck and Bristol-Myers Squibb

In May, we initiated two exciting, non-exclusive clinical trial collaborations with Merck and with Bristol-Myers Squibb to investigate the safety and efficacy of binimetinib, with anti-PD-1 therapy in metastatic colorectal cancer patients with microsatellite stable tumors, or MSS CRC. The incidence of microsatellite stability is found in the vast majority of the colorectal cancer population. These new studies have the potential to strengthen our position both on the I/O front and the CRC field.

The trial with Merck will investigate the safety, tolerability and efficacy of binimetinib with Merck's KEYTRUDA® (pembrolizumab). The trial with Bristol-Myers Squibb will investigate the safety, tolerability and efficacy of binimetinib in combination with Bristol-Myers Squibb's Opdivo® (nivolumab) and Opdivo + Yervoy® (ipilimumab) regimen. Array entered into these collaborations based on the growing body of preclinical and clinical evidence that the immune activity of an anti-PD-1 therapy can be enhanced when combined with a MEK inhibitor, such as binimetinib.

The Phase 1/2 studies are expected to establish recommended dose regimens and explore the preliminary anti-tumor activity of the combinations. Results from these studies will be used to determine optimal approaches to further clinical development of these combinations. The trial with Bristol-Myers Squibb was initiated earlier this month and the trial with Merck is anticipated to begin in the second half of 2017. Under the Merck agreement, Merck will act as the sponsor of this clinical trial, and Array will supply Merck with binimetinib for use in the trial. Under the Bristol-Myers Squibb agreement, Array and Bristol-Myers Squibb will jointly support the study with Array acting as the sponsor.

Strong Global Partnerships to Support Binimetinib and Encorafenib

We are pleased to have in place strong global partnerships to maximize the potential of binimetinib and encorafenib worldwide. Here in the U.S., we continue building our commercial infrastructure, sales force and medical affairs teams. Substantial key talent is already in place across these functions. In Europe, Pierre Fabre (PF), who has a strong legacy in oncology with over a thousand employees dedicated to this therapeutic area including commercial, research and development capabilities, has made binimetinib and encorafenib a top priority for their team. And in Japan, our partner Ono Pharmaceutical (Ono), invented Opdivo, partnered it with BMS and has delivered nearly $1 billion in local Opdivo Japanese sales over the past 12 months.

The deal terms we negotiated with PF and Ono, in aggregate, provided over $60 million in up-front payments with nearly $600 million in potential milestone payments and the potential that over half of future development costs will be offset by contributions from our partners. In Europe and other territories, PF will deliver up to 35% royalties on net sales when the products combined deliver over €100 million of annual sales, and in Japan and South Korea, Ono will provide up to 25% royalties on net sales when the products combined deliver over ¥10 billion.

Novartis continues to substantially fund all ongoing trials with binimetinib and encorafenib that were active or planned as of the close of the Novartis Agreements in 2015, including the COLUMBUS Phase 3 trial. Reimbursement revenue from Novartis was approximately $107 million for the previous 12 months and we estimate that eventually, Novartis will have contributed over $400 million in payments to Array related to binimetinib and encorafenib.

NEW PRECLINICAL LICENSE AND COLLABORATION AGREEMENT WITH AMGEN: Array to Advance Program for Autoimmune Disorders; Amgen Responsible for Clinical Development and Worldwide Commercialization

Array initiated a collaboration agreement with Amgen for the discovery and development of novel drugs for autoimmune disorders. The undisclosed target and lead inhibitors were discovered using Array's proprietary Kinase-Directed Phenotypic Screening Platform that leverages Array's deep expertise in chemistry and early lead development. Under the terms of the agreement, Amgen and Array will collaborate on preclinical development with Array leading the medicinal chemistry work. Amgen is responsible for clinical development and commercialization. In exchange for exclusive rights to Array’s preclinical program, Amgen will make upfront and milestone payments, as well as pay royalties on sales of resulting therapies.


We ended fiscal 2017 with $235 million in cash, cash equivalents and marketable securities.

We are pleased with the progress we have made over the course of the year and are confident in our ability to continue to drive value for shareholders. We are incredibly grateful to the patients, clinicians, collaborators, employees and shareholders who have contributed to our progress and who will continue to help us succeed.


Ron Squarer

Chief Executive Officer
September 15, 2017