Array BioPharma shares jump on results, outlook for pain drug development program

Shares of drug developer Array BioPharma Inc. jumped Monday after the company said its drug candidate reduced pain in a midstage study and it will next compare the treatment with Pfizer Inc.'s Celebrex.

Shares surged 96 cents, or 17.1 percent, to close at $6.56 Monday. The stock has traded between $5.03 and $14.59 over the last 52 weeks.

The experimental drug, ARRY-797, reduced patients' pain following dental surgery, in the Phase II clinical trial. Boulder, Colo.-based Array said it will conduct another midstage study, comparing the drug candidate with Celebrex in treating inflammatory pain. Pfizer reported $2.29 billion in Celebrex sales in 2007.

Lehman Brothers analyst Dr. Jim Birchenough reaffirmed an "Overweight" rating with a $16 price target for Array, citing the potential for a competitor with Celebrex.

"With proof-of-concept established in a robust pain model we expect rapid expansion of development to large areas of unmet need in pain and inflammation," he said in a note to investors.

Meanwhile, Banc of America Securities analyst William T. Ho said the dental pain results bolster confidence in ARRY-797 for future studies, including a comparison with Celebrex. He maintained a "Buy" rating with a $14.50 price target.

Collins Stewart LLC analyst Andrew Fein also reaffirmed a "Buy" rating, with a $16 price target, citing the pain drug candidate's potential for success in future studies.