Array Biopharma (NASDAQ: ARRY) reported Q2 EPS of ($0.06), $0.12 better than the analyst estimate of ($0.18). Revenue for the quarter came in at $26.92 million versus the consensus estimate of $10.2 million.

Array announced today that Michael Carruthers, Chief Financial Officer (CFO), will be leaving Array to pursue an opportunity in the biopharmaceutical industry. The board and executive team thank Mr. Carruthers for his leadership and contributions to the success of Array. Dave Horin, CPA, a managing partner at Chord Advisers, has been appointed as interim CFO, and a search is underway for a CFO replacement to join the Array leadership team. Mr. Carruthers will consult with Array to ensure a smooth transition.

KEY PIPELINE UPDATES Binimetinib (MEK162) and Encorafenib (LGX818) – Array to regain worldwide rights to binimetinib and receive worldwide rights to encorafenib; Three Phase 3 trials advancing Array has reached definitive agreements with Novartis to regain worldwide rights to binimetinib and receive worldwide rights to encorafenib, a BRAF inhibitor being studied in combination with binimetinib in the Phase 3 COLUMBUS trial. These agreements are conditional on the closing of transactions announced by Novartis and GlaxoSmithKline PLC (GSK) on April 22, 2014, which are expected in the first half of 2015, and remain subject to the receipt of regulatory approvals. Array had previously granted Novartis worldwide exclusive rights to develop and commercialize binimetinib under a 2010 License Agreement, which will terminate and be superseded by this new set of agreements between the parties.

Terms of the Agreements Upon close of the deals, Array will receive up to $85 million from Novartis. In addition, Novartis' global, exclusive license to binimetinib will terminate with all rights reverting to Array, and Array will receive global rights to encorafenib. Novartis has agreed to provide transitional regulatory, clinical development and manufacturing services as specified below and will assign or license to Array patent and other intellectual property rights it owns to the extent they relate to binimetinib and encorafenib. All clinical trials involving binimetinib and encorafenib currently sponsored by Novartis or Array, including three pivotal trials, COLUMBUS (BRAF-mutant melanoma / NCT01909453), NEMO (NRAS-mutant melanoma / NCT01763164), and MILO (low-grade serous ovarian cancer / NCT01849874), will continue to be conducted as currently contemplated.

Other than a de minimis payment due to Novartis from Array, there are no milestone payments or royalties payable between the parties under the encorafenib agreement. In order to address competition concerns raised by the European Commission, Array has agreed to obtain an experienced partner for global development and European commercialization of both binimetinib and encorafenib. If Array is unable to find a suitable partner in the prescribed time period, a trustee would have the right to sell such European rights. In addition, Array agreed to undertake to obtain certain third party consents or waivers necessary for Array to consummate the transactions.

Novartis will conduct and fund the COLUMBUS trial through the earlier of June 30, 2016 or completion of last patient first visit. At that time, Array will assume responsibility for the trial, while Novartis will reimburse Array's out-of-pocket costs along with 50% of Array's full time equivalent (FTE) costs in connection with completing the COLUMBUS trial. Novartis will be responsible for conducting all other encorafenib trials until their completion or transfer to Array for a defined transition period. For all trials transferred to Array, Novartis will reimburse Array for out-of-pocket costs and 50% of FTE costs in connection with completing the trials.

Following deal close, Novartis will reimburse Array for all remaining out-of-pocket expenses and 50% of FTE costs associated with MILO, which Array will continue to conduct. For NEMO and all other ongoing and planned clinical trials for binimetinib (other than COLUMBUS, as described above), Novartis will conduct and solely fund each trial, until a mutually agreed-upon transition date to Array. Following this transition, Novartis will reimburse Array for all remaining out-of-pocket expenses and 50% of FTE costs required to complete these studies.

Novartis will remain responsible for conducting and funding development of the NRAS melanoma companion diagnostic until Premarket Approval is received from the U.S. Food and Drug Administration. Following approval, Novartis will transfer the product and Premarket Approval to a diagnostic vendor of Array's designation.

Novartis also retains binimetinib and encorafenib supply obligations for all clinical and commercial needs for up to 30 months after closing and will also assist Array in the technology and manufacturing transfer of binimetinib and encorafenib. Novartis will also provide Array continued access to several Novartis pipeline compounds for use in currently ongoing combination studies, and possible future studies, including Phase 3 trials, with encorafenib and binimetinib.

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