August 8, 2011 / 8:35 PM / 8 years ago

UPDATE 1-Array Biopharma, Genentech in $685 mln deal to develop cancer drug

Aug 8 (Reuters) - Array BioPharma said it signed a deal worth up to $685 million with Genentech, a unit of Roche Holding AG , to develop cancer compounds, sending Array’s shares up 9 percent after market.

Array will get an upfront payment of $28 million and will be eligible to receive clinical and milestone payments of up to $685 million and up to double-digit royalties on sales.

Under the deal, which include Genentech’s RG7602 and Array’s AARY-575, Genetech will be responsible for all clinical development and marketing.

In June Array had said it would cut 20 percent of its workforce mainly in discovery research and support positions and would focus its resources on three key cancer products in its pipeline.

Array shares rose 9 percent to $2.23 after the bell. They closed down 5 percent at $2.05 on Monday on Nasdaq. (Reporting by Shravya Jain in Bangalore; Editing by Don Sebastian)

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