Pfizer Inc. said on Monday it would buy Array Biopharma Inc. for 10.64 billion U.S. dollars in cash, a deal it hopes will help make it a leader in colon cancer and build up its pipeline of oncology drugs.

The largest U.S. drugmaker agreed to pay a hefty premium of 62 percent for Array, which sells the combination treatment Braftovi and Mektovi for melanoma. But those drugs appear poised to become part of a promising triple combination for advanced colorectal cancer.

Pfizer executives said the company began actively pursuing Array last month after it released positive clinical data showing that Braftovi and Mektovi in combination with Eli Lilly and Co’s Erbitux helped reduce the risk of death from colorectal cancer by 48 percent compared to the standard of care in patients with a gene mutation known as BRAF V600E.

The data “is really a landmark publication in one of the most dismal tumors,” Pfizer research chief Mikael Dolsten said in a phone interview.

“There will be ample opportunities to do combinations and build a whole science platform around colorectal cancer,” said Dolsten, adding that he believes the Array drugs could eventually tackle colon cancer earlier in the disease process.

Pfizer said it expects to complete the deal in the second half of 2019.

The transaction is expected to add to earnings beginning 2022, and will reduce adjusted earnings per share by between 4 and 5 cents this year and in 2020, Pfizer said.

Pfizer said it expects to finance the majority of the deal, which has an enterprise value of about 11.4 billion U.S. dollars, with debt and the remaining with existing cash.

Pfizer was advised by Guggenheim Securities and Morgan Stanley on the deal. Array’s advisor was Centerview Partners.

(REUTERS)