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Roche (OTCQX:RHHBY) subsidiary Genentech and Array BioPharma (NASDAQ:ARRY) have decided to develop their cancer drugs, which have similar mechanisms of action, in concert. Both companies, long time partners in oncology drug development, are developing similar drugs designed to enhance the efficacy of some chemotherapeutic agents.

Although full financial terms were not disclosed, the collaboration could earn Array as much as $713 million, with $25 million upfront and as much as $685 million in clinical and commercial milestone payments, plus up to double-digit royalties on sales of any resulting drugs. Genentech will take responsibility for all clinical development and commercialization activities.

The drugs are both ChK-1 inhibitors. ChK-1 is a protein kinase that regulates the tumor cell’s response to DNA damage often caused by treatment with chemotherapy by blocking cell cycle progression in order to allow for repair of damaged DNA. This limits the efficacy of chemotherapeutic agents. The companies believe that inhibiting ChK-1 in combination with chemotherapy can enhance tumor cell death by preventing these cells from recovering from DNA damage.

“Combining both companies' programs will maximize our chances for success in developing and commercializing this novel cancer therapy,” says Robert Conway, CEO of Array BioPharma. “We believe ChK-1 inhibition is a key strategy for enhancing the efficacy of chemotherapeutic and other agents in cancer patients.”

Genentech’s compound, GDC-0425, is currently in phase 1 trials, and Array’s compound ARRY-575 is being prepared for an investigational new drug application to initiate a phase 1 trial in cancer patients. The companies have worked together since 2004 in preclinical cancer drug development and currently have one drug, GDC-0068, an AKT inhibitor in early stage development.

The upfront cash from Genentech comes just a couple of months after Array BioPharma instituted a restructuring plan that included a 20 percent workforce reduction and intended to reduce its cash burn by $20 million during its fiscal year 2012, which started July 1.

Array is focused on small molecules targeted against cancer and inflammatory disease candidates and has narrowed its focus to four proprietary candidates in mid-stage development. The biotech also has 11 partnered programs with several large pharmaceutical and biotech firms that have produced 14 drugs that are in clinical development. Its most advanced drug candidates include selumetinib, a MEK inhibitor that is partnered with AstraZeneca and currently in phase 2 cancer trials; and MEK162, another MEK inhibitor the biotech licensed to Novartis last year that recently entered mid-stage trials in adults with advanced melanoma.

Source: Roche/Array: 2 Shots Are Better Than 1