UPDATE 1-Array BioPharma shares rise on Novartis deal
* Array to get $45 mln upfront payment
* Analysts see deal as a positive for Array
* Shares up as much as 38 pct (Adds analyst comment, details, updates share movement)
April 20 (Reuters) - Array BioPharma Inc (ARRY.O) shares rose as much as 38 percent Tuesday, a day after it signed a licensing deal for its cancer drug candidates with Swiss drugmaker Novartis AG (NOVN.VX), its second high-profile partnership in five months.
The deal, which includes early stage candidate ARRY-162, entitles Array to $45 million in upfront payments and $422 million in milestones. [ID:nSGE63I0M5]
"Financially and strategically, we view a cancer partnership with Novartis as attractive as it is known for its strong presence in oncology," Jefferies & Co analyst Eun Yang wrote in a research note.
Yang said the deal boosted Array's current cash position to about $140 million, which he estimated to be sufficient funding for the next two years.
Array, which focuses on cancer, inflammatory and metabolic diseases, had inked a partnership deal with Amgen Inc (AMGN.O) for the development and marketing of its type 2 diabetes drug in December. [ID:nSGE5BE0JO]
Rodman & Renshaw analyst Simos Simeonidis said he continued to view Array shares as undervalued, and reiterated his "market outperform" rating and $10 price target on the stock.
He said the stock remained one of his top picks, citing Array's pipeline of four fully owned clinical programs and numerous compounds partnered with big pharma and biotech companies.
Array's clinical programs include candidates for the treatment of multiple myeloma and breast cancer.
William Blair & Co analyst John Sonnier said he viewed the Novartis transaction as further validation of Array's discovery platform.
"Array's partnered programs represent over $2.0 billion in potential milestones, and significant royalty on sales," he said in a research note.
Array shares, which were one of the top percentage gainers Tuesday on Nasdaq, were up 33 percent at $4.02 in high-volume morning trade after touching a high of $4.17.
About 10.8 million shares changed hands, which is around 23 times the stock's 10-day moving average. (Reporting by Shailesh Kuber in Bangalore; Editing by Aradhana Aravindan)