After an initial frenzy at the start of the year, the spring months were quiet in terms of biotech M&A activity. That changed today with Pfizer’s announcement to buy Array Biopharma for a deal worth approximately USD 11bn, roughly corresponding to a 60% market premium from the previous close.
Array’s expertise in the development of new drugs for predominantly cancer treatment, has been evident in the past few years. As a leading innovative biotech company, Array has been a perfect strategic fit for the Arctic Aurora LifeScience portfolio, and has such been one of the teams high conviction holdings.
Array has excelled in the art of discovery and development of drug molecules that targets very specific cancer drivers. The company was behind the early development of the pioneering drug candidates that Loxo Oncology undertook the clinical development of. Loxo was on its part acquired by Eli Lilly for USD 8bn earlier this year.
Both Loxo and Array exemplifies the fund’s clear strategy to invest in highly innovative companies that develop new therapies that are clearly differentiated versus competition and offers distinct improvement to patient outcomes in medical areas with large unmet needs.
A key reason to the company’s value surge of late and the fund’s increase in its holding was late-stage data, approval and encouraging early launch sales
for the company’s fully owned drugs Braftovi and Mektovi. The drugs are used in combination to treat a specific mutation in a protein called BRAF that occurs in a subset of patients with melanoma with impressive results in clinical trials.
Array has also out-licensed a number of drug candidates to other biotech companies and large pharma companies such as AstraZeneca, Mirati Therapeutics and Roche after having done the discovery work for those drugs in-house. As a consequence, Array holds several royalty rights to a number of potential blockbuster drugs (in addition to clinical and commercial milestone payments).
Since being a part of the Arctic Aurora LifeScience portfolio since nearly the start of the fund, Array has grown from an intriguing pipeline story to a fully-fledged commercial biotech company triggering the fund to increase its stake in the company over time during positive developments that de-risked the investment. From the first initial investment by the fund at USD 3,4 per share in august 2016 to today’s takeout price of USD 48 per share, Array’s market value has risen by approximately 1400%. Year to date 2019, the stock alone has risen 225% per June 18.
Arctic Aurora LifeScience is open for large and small investors investing in lifescience and biotech companies primarily in Europe and the United States.
Arctic Aurora LifeScience is an equity fund investing in global biotechnology and pharmaceutical companies. The fund is run by former portfolio manager in the Swedish Governmental Pension Fund AP3, Ulrica Bjerke, as well as Dr. Torbjørn Bjerke, both with 20 years of experience from the market. Arctic Aurora LifeScience was launched in May 2016 with both hedged and un-hedged share classes.
Past performance in Arctic Aurora LifeScience is no guarantee for future returns. Future returns depend on the market, fund manager skill, fund risk level, costs, among others. Performance in the fund may at times be negative and may for this fund vary considerably within periods.