Array, Celgene form drug partnership

(Updates with details)

NEW YORK, Sept 24 (Reuters) - Celgene Corp (CELG.O) said on Monday it will pay $40 million for the option to license certain drugs being developed by Array BioPharma Inc (ARRY.O)

Under the agreement, which is focused on the development of drugs for cancer and autoimmune disorders, Celgene will have the opportunity to select two out of four mutually selected drug candidates.

Array will be responsible for early discovery and early clinical development. Celgene will then have the option to select one or two drugs and will receive world-wide licenses to them, except for limited co-promotional rights for Array in the United States.

Array will receive potential clinical and commercial milestone payments per drug of about $500 million, as well as royalties on net sales.

(Reporting by Lewis Krauskopf and Toni Clarke)

((Editing by Dave Zimmerman; Reuters Messaging: Lewis.Krauskopf.reuters.com@reuters.net; lewis.krauskopf@reuters.com; 646-223-6000)) Keywords: ARRAY CELGENE/

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