Array BioPharma Inc. (NASDAQ: ARRY) announced Wednesday after the market close that it had reached a definitive agreement with Novartis A.G. (NYSE: NVS) to regain full worldwide rights to cancer drug binimetinib. The drug candidate is in the midst of several Phase 3 clinical trials.

Novartis had previously been granted the worldwide exclusive rights to binimetinib by Array under a 2010 license agreement, which will terminate and be superseded by a new set of agreements between these parties. However, this agreement is subject to the close of the Novartis-GlaxoSmithKline transaction in the first half of 2015.

Ron Squarer, CEO of Array, commented on the transition:

Binimetinib is currently advancing in three Phase 3 clinical trials and, we expect to file for our first regulatory approval during the first half of 2016. With this agreement, we are in a strong position to successfully develop and commercialize binimetinib to the benefit of cancer patients.

When the deal closes, Array will receive $85 million and Novartis’s global, exclusive license to binimetinib will terminate with all rights reverting to Array.

The Phase 3 trials with binimetinib in advanced cancer patients are NRAS-mutant melanoma (NEMO), low-grade serous ovarian cancer (MILO) and BRAF-mutant melanoma (COLUMBUS).

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Array’s filing further details how the clinical trials will be handled during the transition:

All other clinical trials involving binimetinib, including the NEMO trial and MILO trial, will continue to be conducted as currently contemplated, with Novartis providing substantial financial support in the form of reimbursement to Array for all associated out-of-pocket costs and for one half of Array’s fully-burdened FTE costs based on an annual FTE rate. At designated points for each trial, Novartis will transition responsibility and provide this continuing financial support to Array for completing the trials.

NEMO trial: Novartis will conduct and solely fund the Phase 3 NRAS melanoma clinical trial (NEMO) through June 30, 2016. For all NEMO activities required following that date, Array would be responsible for conducting the trial and Novartis would provide the financial support to Array described above.

MILO trial: Array will continue conduct and complete the Phase 3 low grade serous ovarian cancer trial (MILO) and Novartis will provide financial support to Array as described above.

Also Novartis will be responsible for continued conduct and funding of the COLUMBUS trial. This obligation will transfer to any future owner of LGX818.

Apart from the previously mentioned trials, Novartis will conduct and fund, and transfer at designated times, all other Novartis sponsored trials, including a series of planned clinical pharmacology and pediatric trials, through the end of December 2015. After that date, Array will be responsible for conducting those trials, and Novartis would provide financial support to Array as described in the filing.

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The drug candidate is a MEK inhibitor that regulates several key cellular activities, such as proliferation differentiation, migration, survival and angiogenesis. These activities have been shown to be inappropriately activated in many cancers. Binimetinib targets the key enzyme in this pathway.

Shares of Array were up about 18% at $4.63 just after the opening bell Thursday. The stock has a consensus price target of $7.00 and a 52-week trading range of $2.98 to $6.05.

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