ARRAY BIOPHARMA INC (Form: 10-Q, Received: 11/02/2011 17:24:21)

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended September 30, 2011

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-16633

Array BioPharma Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		84-1460811
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

3200 Walnut Street, Boulder, CO		80301
(Address of Principal Executive Offices)		(Zip Code)

(303) 381-6600

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o Accelerated Filer x

Non-Accelerated Filer o Smaller Reporting Company o

(do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

As of October 31, 2011, the registrant had 58,406,841 shares of common stock outstanding.

Table of Contents

ARRAY BIOPHARMA INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2011

TABLE OF CONTENTS

		Page No.

PART I	FINANCIAL INFORMATION	1
Item 1.	Condensed Financial Statements (unaudited)	1

	Condensed Balance Sheets as of September 30, 2011 and June 30, 2011	1
	Condensed Statements of Operations and Comprehensive Loss for the quarters ended September 30, 2011 and 2010	2
	Condensed Statement of Stockholders’ Deficit for the quarter ended September 30, 2011	3
	Condensed Statements of Cash Flows for the quarters ended September 30, 2011 and 2010	4
	Notes to the Unaudited Condensed Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	45

PART II	OTHER INFORMATION	45
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 3.	Defaults Upon Senior Securities	48
Item 4.	Reserved	49
Item 5.	Other Information	49
Item 6.	Exhibits	49

SIGNATURES		50

EXHIBIT INDEX
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 302
Certification of CEO and CFO Pursuant to Section 906

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED FINANCIAL STATEMENTS

ARRAY BIOPHARMA INC.

Condensed Balance Sheets

(Amounts in Thousands, Except Share and Per Share Amounts)

(Unaudited)

	September 30,		June 30,
	2011		2011

ASSETS
Current assets
Cash and cash equivalents	$	72,367	$	48,099
Marketable securities	4,855		15,986
Prepaid expenses and other current assets	4,845		6,477
Total current assets	82,067		70,562

Long-term assets
Marketable securities	484		623
Property and equipment, net	14,797		15,698
Other long-term assets	2,428		2,491
Total long-term assets	17,709		18,812
Total assets	$	99,776	$	89,374

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable	$	4,521	$	4,460
Accrued outsourcing costs	4,587		5,248
Accrued compensation and benefits	7,508		6,431
Other accrued expenses	6,358		2,312
Deferred rent	3,372		3,333
Deferred revenue	62,479		47,874
Current portion of long-term debt	4,350		150
Total current liabilities	93,175		69,808

Long-term liabilities
Deferred rent	14,100		14,968
Deferred revenue	37,069		39,306
Long-term debt, net	88,259		91,390
Derivative liabilities	526		540
Other long-term liabilities	484		4,220
Total long-term liabilities	140,438		150,424
Total liabilities	233,613		220,232

Commitments and contingencies

Stockholders’ deficit
Series A junior participating convertible preferred stock, $0.001 par value; 500,000 shares authorized, no shares issued or outstanding	-		-
Series B convertible preferred stock, $.001 par value; 10,135 shares authorized, issued and outstanding as of September 30, 2011 and June 30, 2011	30,000		30,000
Common stock, $0.001 par value; 120,000,000 shares authorized; 57,051,053 and 57,020,003 shares issued and outstanding, as of September 30, 2011 and June 30, 2011 respectively	57		57
Additional paid-in capital	347,458		346,853
Warrants	39,385		39,385
Accumulated other comprehesive income (loss)	(1)		3
Accumulated deficit	(550,736)		(547,156)
Total stockholders’ deficit	(133,837)		(130,858)
Total liabilities and stockholders’ deficit	$	99,776	$	89,374

The accompanying notes are an integral part of these condensed financial statements.

Table of Contents

ARRAY BIOPHARMA INC.

Condensed Statements of Operations and Comprehensive Loss

(Amounts in Thousands, Except Per Share Data)

(Unaudited)

	Three Months Ended September 30,
	2011		2010

Revenue
License and milestone revenue	$	18,462	$	12,793
Collaboration revenue	3,669		5,720
Total revenue	22,131		18,513

Operating expenses
Cost of revenue	6,444		7,281
Research and development for proprietary programs	12,598		13,855
General and administrative	3,720		4,268
Total operating expenses	22,762		25,404

Loss from operations	(631)		(6,891)

Other income (expense)
Losses on auction rate securities	-		(67)
Interest income	6		220
Interest expense	(2,955)		(3,892)
Total other income (expenses), net	(2,949)		(3,739)

Net loss	$	(3,580)	$	(10,630)

Change in unrealized gains and losses on marketable securities	(4)		(567)

Comprehensive loss	$	(3,584)	$	(11,197)

Weighted average shares outstanding - basic and diluted	57,025		53,415

Net loss per share - basic and diluted	$	(0.06)	$	(0.20)

The accompanying notes are an integral part of these condensed financial statements.

Table of Contents

ARRAY BIOPHARMA INC.

Condensed Statement of Stockholders’ Deficit

(All Numbers in Thousands)

(Unaudited)

											Accumulated
							Additional				Other
	Preferred Stock			Common Stock			Paid-in				Comprehensive		Accumulated
	Shares	Amounts		Shares	Amounts		Capital		Warrants		Income (Loss)		Deficit		Total

Balance as of June 30, 2011	10,135	$	30,000	57,020	$	57	$	346,853	$	39,385	$	3	$	(547,156)	$	(130,858)

Issuance of common stock under stock option and employee stock purchase plans	-	-		31	-		53		-		-		-		53
Share-based compensation expense	-	-		-	-		567		-		-		-		567
Payment of offering costs	-	-		-	-		(15)		-		-		-		(15)
Change in unrealized gain on marketable securities											(4)		-		(4)
Net loss	-	-		-	-		-		-		-		(3,580)		(3,580)

Balance as of September 30, 2011	10,135	$	30,000	57,051	$	57	$	347,458	$	39,385	$	(1)	$	(550,736)	$	(133,837)

The accompanying notes are an integral part of these condensed financial statements.

Table of Contents

ARRAY BIOPHARMA INC.

Statements of Cash Flows

(Amounts in Thousands)

	Three Months Ended September 30,
	2011		2010

Cash flows from operating activities
Net loss	$	(3,580)	$	(10,630)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense	1,334		1,490
Non-cash interest expense	1,145		1,517
Share-based compensation expense	567		1,098
Gains (losses) on auction rate securities	-		67
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	1,605		(1,576)
Accounts payable and other accrued expenses	4,107		(1,210)
Accrued outsourcing costs	(661)		(927)
Accrued compensation and benefits	1,157		1,345
Deferred rent	(829)		(791)
Deferred revenue	12,368		(12,020)
Other long-term liabilities	(3,597)		723
Net cash provided by (used in) operating activities	13,616		(20,914)

Cash flows from investing activities
Purchases of property and equipment	(433)		(368)
Purchases of marketable securities	(4,560)		(11,527)
Proceeds from sales and maturities of marketable securities	15,607		31,711
Net cash provided by investing activities	10,614		19,816

Cash flows from financing activities
Proceeds from exercise of stock options and shares issued under the Employee Stock Purchase Plan	53		93
Proceeds from the issuance of common stock for cash	-		1,519
Payment of offering costs	(15)		(68)
Net cash provided by financing activities	38		1,544

Net increase (decrease) in cash and cash equivalents	24,268		446
Cash and cash equivalents as of beginning of period	48,099		32,846
Cash and cash equivalents as of end of period	$	72,367	$	33,292

Supplemental disclosure of cash flow information
Cash paid for interest	$	1,811	$	2,349

The accompanying notes are an integral part of these condensed financial statements.

Table of Contents

NOTE 1 - OVERVIEW AND BASIS OF PRESENTATION

Organization

Array BioPharma Inc. is a biopharmaceutical company focused on the discovery, development and commercialization of targeted small molecule drugs to treat patients afflicted with cancer and inflammatory diseases. Our proprietary drug development pipeline includes clinical candidates that are designed to regulate therapeutically important target pathways. In addition, leading pharmaceutical and biotechnology companies partner with us to discover and develop drug candidates across a broad range of therapeutic areas.

Basis of Presentation

We follow the accounting guidance outlined in the Financial Accounting Standards Board Codification. The accompanying unaudited Condensed Financial Statements have been prepared without audit and do not include all of the disclosures required by the Financial Accounting Standards Board Codification guidelines, which have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) relating to requirements for interim reporting. The June 30, 2011 Condensed Balance Sheet data were derived from audited financial statements but do not include all disclosures required by accounting principles generally accepted in the United States (“GAAP”). The unaudited Condensed Financial Statements reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary to present fairly our financial position as of September 30, 2011 and 2010, and our results of operations and our cash flows for the quarters ended September 30, 2011 and 2010. Operating results for the quarter ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending June 30, 2012.

These unaudited Condensed Financial Statements should be read in conjunction with our audited Financial Statements and the notes thereto included in our Annual Report on Form 10-K for the year ended June 30, 2011 filed with the SEC on August 12, 2011.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Although management bases these estimates on historical data and other assumptions believed to be reasonable under the circumstances, actual results could differ significantly from these estimates under different assumptions or conditions.

We believe the accounting estimates having the most significant impact on the financial statements relate to (i) estimating the stand-alone value of deliverables under collaborations involving multiple deliverables and (ii) estimating the periods over which upfront and milestone payments from collaboration agreements are recognized; (iii) estimating accrued outsourcing costs for clinical trials and preclinical testing; and (iv) estimating the fair value of our long-term debt that has associated warrants and embedded derivatives, and the separate estimated fair value of those warrants and embedded derivatives.

Liquidity

We have incurred operating losses and have an accumulated deficit as a result of ongoing research and development spending. As of September 30, 2011, we had an accumulated deficit of $550.7 million. We had net losses of $3.6 million for the quarter ended September 30, 2011, and $56.3 million, $77.6 million and $127.8 million for the fiscal years ended June 30, 2011, 2010 and 2009, respectively.

Table of Contents

We have historically funded our operations from upfront fees, license and milestone revenue received under collaborations and out-licensing transactions; from the issuance and sale of equity securities; and through debt provided by our credit facilities. Since October 1, 2009, we have received approximately $161 million, including the following payments under our collaborations:

• In December 2009, we received a $60 million upfront payment from Amgen Inc. under a Collaboration and License Agreement.

• In May and June 2010, we received a total of $45 million in upfront and milestone payments under a License Agreement with Novartis Pharmaceutical International Ltd.

• In December 2010, we received $10 million in a milestone payment under a License Agreement with Celgene Corporation.

• In May 2011, we received $10 million in a milestone payment under a License Agreement with Novartis Pharmaceutical International Ltd.

• In September 2011, we received $28 million in an upfront payment from Genentech under a License Agreement.

The recognition of revenue under these agreements is discussed further below in Note 4 – Deferred Revenue . Until we can generate sufficient levels of cash from operations, which we do not expect to achieve in the foreseeable future, we will continue to utilize existing cash, cash equivalents and marketable securities, and will continue to depend on funds provided from the sources mentioned above, which may not be available or forthcoming. Prior to the reduction in force we implemented in June 2011, we were using approximately $20 million per quarter to fund our operations. Although we are realizing savings from the reduction in force, these savings may be partially offset in the future by increased development costs as our wholly-owned programs progress into Phase 2 and Phase 3 clinical trials. We may be forced to reduce or eliminate such increased spending on development however, if sufficient funds are not available when needed.

Management believes that the cash, cash equivalents and marketable securities held by Array as of September 30, 2011 will enable us to continue to fund operations in the normal course of business for at least the next 12 months. We anticipate receiving additional funding from milestone payments from existing collaborations and plan to continue to satisfy all or a portion of the interest payment obligations under the credit facilities with Deerfield Private Design Fund, L.P. and Deerfield Private Design International Fund, L.P. (collectively referred to as Deerfield) with the proceeds from sales of our common stock pursuant to the Equity Distribution Agreement with Piper Jaffray & Co. discussed in Note 7 – Equity Distribution Agreement or through the issuance of shares of our common stock to Deerfield in accordance with the Facility Agreements with Deerfield. We may also fund our operations through the sale of debt or equity securities which would result in dilution to existing shareholders.

We also intend to continue to seek to license select programs and potentially receive upfront payments for those programs for use in funding our operations. There can be no assurance, however, that we will successfully consummate new collaborations that provide for additional upfront fees. Furthermore, sufficient funds may not be available to us when needed from existing collaborations or from the proceeds of debt or equity financings.

If we are unable to obtain additional funding from these or other sources when needed, or to the extent needed, it may be necessary to significantly reduce the current rate of spending through further reductions in staff and delaying, scaling back, or stopping certain research and development programs. Insufficient liquidity may also require us to relinquish greater rights to product candidates at an earlier stage of development or on less favorable terms to us or our stockholders than we would otherwise choose in order to obtain upfront license fees needed to fund operations. These events could prevent us from successfully executing on our operating plan and could raise substantial doubt about our ability to

Table of Contents

continue as a going concern in future periods. Further, as discussed in Note 5 - Long-term Debt , $96.8 million of our debt outstanding with Deerfield becomes due and payable if cash, cash equivalents and marketable securities falls below $20 million at the end of a fiscal quarter.

Fair Value Measurements

Our financial instruments are recognized and disclosed at fair value in our financial statements and primarily consist of cash and cash equivalents, marketable securities, long-term investments, trade receivables and payables, long-term debt, embedded derivatives associated with the long-term debt and warrants. Array uses different valuation techniques to measure the fair value of assets and liabilities, as discussed in more detail below. Fair value is defined as the price that would be received or paid to sell the financial instruments in an orderly transaction between market participants at the measurement date. Array uses a framework for measuring fair value based on a hierarchy that distinguishes sources of available information used in fair value measurements and categorizes them into three levels:

· Level I: Quoted prices in active markets for identical assets and liabilities.

· Level II: Observable inputs other than quoted prices in active markets for identical assets and liabilities.

· Level III: Unobservable inputs.

Array discloses assets and liabilities measured at fair value based on their level in the hierarchy. Considerable judgment is required in interpreting market and other data to develop estimates of fair value for assets or liabilities for which there are no quoted prices in active markets, which included our auction rate securities (or ARS), which we previously owned, and warrants we issued to Deerfield in connection with our long-term debt and the embedded derivatives associated with our long-term debt with Deerfield. The use of different assumptions and/or estimation methodologies may have a material effect on their estimated fair values. Accordingly, the fair value estimates reflected or disclosed may not be indicative of the amount that Array or holders of the instruments could realize in a current market exchange.

Array periodically reviews the realizability of each investment when impairment indicators exist with respect to the investment. If other-than-temporary impairment of the value of an investment is deemed to exist, the cost basis of the investment is written down to the then estimated fair value.

Cash and Cash Equivalents

Cash equivalents consist of short-term, highly liquid financial instruments that are readily convertible to cash and have maturities of 90 days or less from the date of purchase. These may consist of money market funds, taxable commercial paper, U.S. government agency obligations and corporate notes and bonds with high credit quality.

Marketable Securities

We have designated our marketable securities as of each balance sheet date as available-for-sale securities and account for them at their respective fair values. Marketable securities are classified as short-term or long-term based on the nature of these securities and the availability of these securities to meet current operating requirements. Marketable securities that are readily available for use in current operations are classified as short-term available-for-sale securities and are reported as a component of current assets in the accompanying Condensed Balance Sheets. Marketable securities that are not considered available for use in current operations (including when active markets for such securities do not exist) are classified as long-term available-for-sale securities and are reported as a component of long-term assets in the accompanying Condensed Balance Sheets.

Table of Contents

disposition. We review all available-for-sale securities each period to determine if they remain available-for-sale based on our then current intent and ability to sell the security if we need to do so. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is included in Interest Income in the accompanying Condensed Statements of Operations and Comprehensive Loss. Realized gains and losses on ARS we previously owned, along with declines in value judged to be other-than-temporary are reported in “Losses on auction rate securities” in the accompanying Condensed Statements of Operations and Comprehensive Loss when recognized. The cost of securities sold is based on the specific identification method .

We sold our remaining ARS during the quarter ended March 31, 2011. Prior to their disposition, we determined the carrying value of the ARS under the fair value hierarchy using Level III, or unobservable inputs, as there was no active market for the securities. The most significant unobservable inputs used in this method were estimates of the amount of time until a liquidity event would occur and the discount rate, which incorporates estimates of credit risk and a liquidity premium (discount). Due to the inherent complexity in valuing these securities, we engaged a third-party valuation firm to perform an independent valuation of the ARS as part of our overall fair value analysis beginning with the first quarter of fiscal 2009 and continuing through the quarter ended December 31, 2010.

Property and Equipment

Property and equipment are stated at historical cost less accumulated depreciation and amortization. Additions and improvements are capitalized. Certain costs to internally develop software are also capitalized. Maintenance and repairs are expensed as incurred.

Depreciation and amortization are computed on the straight-line method based on the following estimated useful lives:

Furniture and fixtures		7 years
Equipment		5 years
Computer hardware and software		3 years

Array depreciates leasehold improvements associated with operating leases on a straight-line basis over the shorter of the expected useful life of the improvements or the remaining lease term.

The carrying value for property and equipment is reviewed for impairment when events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows from the use of the asset and its eventual disposition is less than its carrying amount.

Equity Investment

Array has entered into one collaboration and license agreement and may, in the future, enter into additional agreements, in which we received an equity interest as consideration for all or a portion of upfront, license or other fees under the terms of the agreement. We report the value of equity securities received from non-publicly traded companies in which we do not exercise a significant controlling interest at cost as Other Long-term Assets in the accompanying Condensed Balance Sheet. We monitor this investment for impairment at least annually and make appropriate reductions in the carrying value if it is determined that impairment has occurred, based primarily on the financial condition and near and long-term prospects of the issuer.

Accrued Outsourcing Costs

Substantial portions of our preclinical studies and clinical trials are performed by third party laboratories, medical centers, contract research organizations and other vendors (collectively “CROs”). These CROs generally bill monthly or quarterly for services performed or bill based upon milestone achievement. For

Table of Contents

preclinical studies, we accrue expenses based upon estimated percentage of work completed and the contract milestones remaining. For clinical studies, expenses are accrued based upon the number of patients enrolled and the duration of the study. We monitor patient enrollment, the progress of clinical studies and related activities to the extent possible through internal reviews of data reported to us by the CROs, correspondence with the CROs and clinical site visits. Our estimates depend on the timeliness and accuracy of the data provided by our CROs regarding the status of each program and total program spending. We periodically evaluate the estimates to determine if adjustments are necessary or appropriate based on information we receive.

Deferred Revenue

We record amounts received but not earned under our collaboration agreements as Deferred Revenue, which are then classified as either current or long-term in the accompanying Condensed Balance Sheets based on the period during which they are expected to be recognized as revenue. See Note 4 - Deferred Revenue for more information.

Long-term Debt and Embedded Derivatives

The terms of our long-term debt are discussed in detail in Note 5 – Long-term Debt . The accounting for these arrangements is complex and is based upon significant estimates by management. We review all debt agreements to determine the appropriate accounting treatment when the agreement is entered into and review all amendments to determine if the changes require accounting for the amendment as a modification of the debt, or as an extinguishment and issuance of new debt. We also review each long-term debt arrangement to determine if any feature of the debt requires bifurcation and/or separate valuation. These may include hybrid instruments, which are comprised of at least two components ((1) a debt host instrument and (2) one or more conversion features), warrants and other embedded derivatives, such as puts and other rights of the debt holder.

We currently have two embedded derivatives related to our long-term debt with Deerfield. One of the embedded derivatives is a variable interest rate structure that constitutes a liquidity linked variable spread feature. The other relates to Deerfield’s ability to accelerate the repayment of the debt in the event of certain changes in our control that constitutes a significant transaction contingent put option. Such event would occur if the acquirer did not meet certain financial conditions, based on size and credit worthiness. Collectively, they are referred to as the “Embedded Derivatives.” Under the fair value hierarchy, we measure the fair value of the Embedded Derivatives using Level III, or unobservable inputs, as there is no active market for them, and calculate fair value using a combination of a discounted cash flow analysis and the Black-Derman Toy interest rate model.

The fair value of the variable interest rate structure is based on our estimate of the probable effective interest rate over the term of the Deerfield credit facilities. Because the interest rate may vary based on changes in our cash position during the term of the loan, we estimate the effective interest rate over the term of the credit facilities based on our cash flow forecasts, which include our expectations of future cash inflows from upfront fees, milestone payments and issuances of equity. The fair value of the put option is based on our estimate of the probability that a change in control that triggers Deerfield’s right to accelerate the debt will occur. With those inputs, the fair value of each Embedded Derivative is calculated as the difference between the fair value of the Deerfield credit facilities if the Embedded Derivatives are included and the fair value of the Deerfield credit facilities if the Embedded Derivatives are excluded. Due to the inherent complexity in valuing the Deerfield credit facilities and the Embedded Derivatives, we have engaged a third party valuation firm to perform the valuation as part of our overall fair value analysis.

The estimated fair value of the Embedded Derivatives was determined based on management’s judgment and assumptions and the use of different assumptions could result in significantly different estimated fair values. For example, the value of the embedded derivative relating to the variable interest rate feature as of September 30, 2011 of $526 thousand is based on the assumption that our total cash and marketable securities balance could fall to between $40 million and $50 million as of the end of two months out of the

Table of Contents

remaining 57 months of the facility. If conditions and the resulting assumptions were to change such that it was assumed that the total cash and marketable securities balance could fall to between $40 million and $50 million as of the end of a total of 30 months out of the remaining 57 months of the facility, the average effective interest rate would increase to 8.0%. This change would cause the Embedded Derivative value to increase by $1.1 million and would result in a charge of the same amount to the Statement of Operations and Comprehensive Loss. Further, if conditions and the resulting assumptions were to change such that it was assumed that our total cash and marketable securities balance could fall to between $40 million and $50 million as of the end of a total of the same 30 months and also fall further to between $30 and $40 million as of the end of a total of seven additional months, the effective interest rate would increase to 8.5%. This change would cause the embedded derivative value to increase by $2.3 million from the current level and would result in a charge of the same amount to the Statement of Operations and Comprehensive Loss.

The fair value of the Embedded Derivatives is recorded as a component of Other Long-term Liabilities in the accompanying Condensed Balance Sheets. Changes in the value of the Embedded Derivatives is adjusted quarterly and recorded to Other Long-term Liabilities in the Condensed Balance Sheets and Interest Expense in the accompanying Condensed Statements of Operations and Comprehensive Loss.

Warrants that we have issued in connection with our long-term debt arrangements have been classified as equity. We value the warrants at issuance based on a Black-Scholes option-pricing model and then allocate a portion of the proceeds under the debt to the warrants based upon their relative fair values. The warrants are recorded in Stockholders’ Equity with the offset to Debt Discount. The Debt Discount is being amortized from the respective draw dates to the end of the term of the Deerfield credit facilities using the effective interest method and recorded as Interest Expense in the accompanying Condensed Statements of Operations and Comprehensive Loss.

Transaction fees paid in connection with our long-term debt arrangements that qualify for capitalization are recorded as Other Long-Term Assets in the Condensed Balance Sheets and are amortized to Interest Expense in the accompanying Condensed Statements of Operations and Comprehensive Loss using the effective interest method over the term of the underlying debt agreement.

Income Taxes

We account for income taxes using the asset and liability method. We recognize the amount of income taxes payable or refundable for the year as well as deferred tax assets and liabilities. Deferred tax assets and liabilities are determined based on the difference between the financial statement carrying value and the tax basis of assets and liabilities and, using enacted tax rates in effect, reflect the expected effect these differences would have on taxable income. Valuation allowances are recorded to reduce the amount of deferred tax assets when management cannot conclude it is more likely than not that some or all of the deferred tax assets will be realized. Such allowances are based upon available objective evidence, the expected reversal of temporary differences and projections of future taxable income.

Operating Leases

We have negotiated certain landlord/tenant incentives and rent holidays and escalations in the base price of rent payments under our operating leases. For purposes of determining the period over which these amounts are recognized or amortized, the initial term of an operating lease includes the “build-out” period of leases, where no rent payments are typically due under the terms of the lease and includes additional terms pursuant to any options to extend the initial term if it is more likely than not that we will exercise such options. We recognize rent holidays and rent escalations on a straight-line basis over the initial lease term. The landlord/tenant incentives are recorded as an increase to Deferred Rent in the accompanying Condensed Balance Sheets and amortized on a straight-line basis over the initial lease term. We have also entered into two sale-lease back transactions for our facilities in Boulder and Longmont, Colorado, where the consideration received from the landlord is recorded as an increase to Deferred Rent in the accompanying Condensed Balance Sheets and amortized on a straight-line basis

Table of Contents

over the lease term. Deferred Rent balances are classified as short-term or long-term in the accompanying Condensed Balance Sheets based upon the period during which the reversal of the liability is expected to occur.

Share-Based Compensation

We use the fair value method of accounting for share-based compensation arrangements, which requires that compensation expense be recognized based on the grant date fair value of the arrangement. Share-based compensation arrangements include stock options granted under our Amended and Restated Stock Option and Incentive Plan and purchases of common stock by our employees at a discount to the market price under our Employee Stock Purchase Plan (“ESPP”).

The estimated grant date fair value of stock options is based on a Black-Scholes option-pricing model and is expensed on a straight-line basis over the vesting term. Compensation expense for stock options is reduced for forfeitures, which are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. Compensation expense for purchases under the ESPP is measured based on a Black-Scholes option-pricing model and incorporates the estimated fair value of the common stock during each offering period as well as the purchase discount.

Revenue Recognition

Most of our revenue is from our collaborators for upfront or license fees and milestone payments, as well as research funding derived from discovering and developing drug candidates. Our agreements with collaboration partners may include non-refundable license and upfront fees, non-refundable milestone payments that are triggered upon achievement of specific research or development goals, and future royalties on sales of products that result from the collaboration, and may also include fees based on annual rates for full-time-equivalent employees (“FTEs”) working on a program. A small portion of our revenue comes from the sale of compounds on a per-compound basis. We combine License and Milestone Revenue, which consists of upfront fees and ongoing milestone payments from collaborators that we recognize during the applicable period. We report FTE fees for discovery and the development of proprietary drug candidates that we out-license as Collaboration Revenue.

We recognize revenue when (a) persuasive evidence of an arrangement exists, (b) we deliver products or render services, (c) the sales price is fixed or determinable and (d) collectability is reasonably assured.

We follow ASC 605-25 “ Revenue Recognition - Multiple-Element Arrangements” which provides guidance on the accounting for arrangements involving the delivery of multiple revenue elements when delivery of separate units of accounting occurs in different reporting periods. This standard addresses the determination of the unit(s) of accounting for multiple-element arrangements and how the arrangement’s consideration should be allocated to each unit of accounting. We adopted this accounting standard on a prospective basis for all multiple-element arrangements entered into on or after July 1, 2010 and for any multiple-element arrangements that were entered into prior to July 1, 2010 but materially modified on or after July 1, 2010. The adoption of this standard may result in revenue recognition patterns for future agreements that are materially different from those recognized for our past collaboration arrangements.

Our collaboration agreements may include multiple elements including upfront license fees, research and development services, milestone payments, and drug product manufacturing. For our multiple element transactions entered into on or after July 1, 2010, we evaluate the deliverables to determine if they have stand-alone value and we allocate revenue to the elements based on their relative selling prices. We treat deliverables in an arrangement that do not meet this separation criteria as a single unit of accounting, generally applying applicable revenue recognition guidance for the final deliverable to the combined unit of accounting. As of September 30, 2011, we had one agreement entered into during the quarter with multiple-elements and we have had no material modifications to arrangements that were entered into prior to July 1, 2010.

Table of Contents

We recognize revenue from non-refundable upfront payments and license fees on a straight-line basis over the term of performance under the agreement, which for agreements prior to July 1, 2010 is generally the estimated research or development term. For agreements after this date, the performance period for up front license fees may be shorter, because it usually takes up to six months between the execution date and the completion of the inseparable technology transfer. This is the period of performance for that particular deliverable. We defer the upfront development payments and record them as Deferred Revenue upon receipt, pending recognition. These are classified as a short-term or long-term liability in the accompanying Condensed Balance Sheets, depending on the period over which revenue is expected to be recognized.

When the performance period is not specifically identifiable from the agreement, we estimate the performance period based upon provisions contained within the agreement, such as the duration of the research or development term, the existence, or likelihood of achievement of development commitments and any other significant commitments.

Most of our agreements provide for milestone payments. In certain cases, we recognize all or a portion of each milestone payment as revenue when the specific milestone is achieved based on the applicable percentage earned of the estimated research or development effort, or other performance obligation that has elapsed, to the total estimated research and/or development effort. In other cases, when the milestone payment is attributed to our future development obligations, we recognize the revenue on a straight-line basis over the estimated remaining development effort.

We periodically review the expected performance periods under each of our agreements that provide for non-refundable upfront payments and license fees and milestone payments. We adjust the amortization periods when appropriate to reflect changes in assumptions relating to the duration of expected performance periods. We could accelerate revenue recognition for non-refundable license fees and upfront payments and milestone payments in the event of early termination of programs. Alternatively, we could decelerate such revenue recognition if programs are extended. As such, while changes to such estimates have no impact on our reported cash flows, our reported revenue is significantly influenced by our estimates of the period over which our obligations are expected to be performed.

Cost of Revenue and Research and Development Expenses for Proprietary Programs

We incur costs in connection with performing research and development activities which consist mainly of compensation, associated fringe benefits, share based compensation, preclinical and clinical outsourcing costs and other collaboration-related costs, including supplies, small tools, facilities, depreciation, recruiting and relocation costs and other direct and indirect chemical handling and laboratory support costs. We allocate these costs between Cost of Revenue and Research and Development Expenses for Proprietary Programs based upon the respective time spent by our scientists on development conducted for our collaborators and for our internal proprietary programs. Cost of Revenue represents the costs associated with research and development, including preclinical and clinical trials that we conduct for our collaborators, including co-development arrangements. Research and Development Expenses for Proprietary Programs consists of direct and indirect costs for our specific proprietary programs. We do not bear any risk of failure for performing these activities and the payments are not contingent on the success or failure of the research program. Accordingly, we expense these costs when incurred.

Where our collaboration agreements provide for us to conduct research and development and for which our partner has an option to obtain the right to conduct further development and to commercialize a product, we attribute a portion of our research and development costs to Cost of Revenue based on the percentage of total programs under the agreement that we conclude is likely to continue to be funded by the partner. These costs may not be incurred equally across all programs. In addition, we continually evaluate the progress of development activities under these agreements and if events or circumstances change in future periods that we reasonably believe would make it unlikely that a collaborator would continue to fund the same percentage of programs, we will adjust the allocation accordingly. See Note 4 – Deferred Revenue , for further information about our collaborations.

Table of Contents

Net Loss per Share

Basic net loss per share is computed by dividing net loss for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share reflects the additional dilution from potential issuances of common stock, such as stock issuable pursuant to the exercise of stock options and warrants issued related to our long-term debt. The treasury stock method is used to calculate the potential dilutive effect of these common stock equivalents. Potentially dilutive shares are excluded from the computation of diluted net loss per share when their effect is anti-dilutive. As a result of our net losses for all periods presented, all potentially dilutive securities were anti-dilutive and therefore have been excluded from the computation of diluted net loss per share.

Comprehensive Loss

Our comprehensive loss consists of our net losses and adjustments to unrealized gains and losses on investments in available-for-sale marketable securities. We had no other sources of comprehensive loss for the periods presented.

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (FASB) issued FASB ASU No. 2011-04 , Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS. This ASU provides a consistent definition of fair value between U.S. GAAP and International Financial Reporting Standards. Additionally, the ASU changes certain fair value measurement principles and expands the disclosures for fair value measurements. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011 and is to be applied prospectively. The adoption of this ASU is not expected to have a material impact on our financial statements.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income . This amendment of the Codification allows an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both cases, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with total other comprehensive income, and a total amount for comprehensive income. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments to the Codification in this ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. This ASU must be applied retrospectively. The amendments to the Codification in this ASU are effective for Array for fiscal years and interim periods within those years, beginning after December 15, 2011.

Table of Contents

NOTE 2 – SEGMENTS, GEOGRAPHIC INFORMATION AND SIGNIFICANT COLLABORATORS

Segments

All operations of Array are considered to be in one operating segment and, accordingly, no segment disclosures have been presented. The physical location of all of our equipment, leasehold improvements and other fixed assets is within the U.S.

Geographic Information

All of our collaboration agreements are denominated in U.S. dollars. The following table details revenue from collaborators by geographic area based on the country in which collaborators are located or the ship-to destination for compounds (dollars in thousands):

	Three Months Ended
	September 30,
	2011		2010

North America	$	18,531	$	15,680
Europe	3,596		2,829
Asia Pacific	4		4
	$	22,131	$	18,513

Significant Collaborators

The following is a schedule identifying collaborators who contributed greater than 10% of total revenue during the periods set forth below.

	Three Months Ended
	September 30,
	2011	2010

Genentech, Inc.	48.3%	23.1%
Amgen Inc.	27.0%	39.1%
Novartis International Pharmaceutical Ltd.	15.5%	15.2%
Celgene	8.2%	22.3%
Other	1.0%	0.3%
	100.0%	100.0%

The loss of one or more of our significant collaborators could have a material adverse effect on our business, operating results or financial condition. We do not require collateral from our collaborators, though most pay in advance. Although we are impacted by economic conditions in the biotechnology and pharmaceutical sectors, management does not believe significant credit risk exists as of September 30, 2011.

Table of Contents

NOTE 3 - MARKETABLE SECURITIES

Marketable securities consisted of the following as of September 30, 2011 (dollars in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value

Short-term available-for-sale securities:
U.S. Government agency securities	$	4,551	$	-	$	(1)	$	4,550
Mutual fund securities	305		-		-		305
Sub-total	4,856		-		(1)		4,855

Long-term available-for-sale securities:
Mutual fund securities	484		-		-		484
Sub-total	484		-		-		484

Total	$	5,340	$	-	$	(1)	$	5,339

Marketable securities consisted of the following as of June 30, 2011 (dollars in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value

Short-term available-for-sale securities:
U.S. Government agency securities	$	15,598	$	3			$	15,601
Mutual fund securities	385						385
Sub-total	15,983		3		-		15,986

Long-term available-for-sale securities:
Mutual fund securities	623						623
Sub-total	623		-		-		623

Total	$	16,606	$	3	$	-	$	16,609

The estimated fair values of these marketable securities were classified into the following fair value measurement categories (dollars in thousands):

	September 30,		June 30,
	2011		2011

Quoted prices in active markets for
identical assets (Level 1)	$	5,339	$	16,609
Observable inputs other than quoted
prices in active markets (Level 2)	-		-
Significant unobservable inputs (Level 3)	-		-
	$	5,339	$	16,609

Table of Contents

The amortized cost and estimated fair value of available-for-sale securities by contractual maturity as of September 30, 2011 was as follows (dollars in thousands):

	Amortized		Fair
	Cost		Value

Due in one year or less	$	4,856	$	4,855
Due in one year to three years	484		484
	$	5,340	$	5,339

NOTE 4 – DEFERRED REVENUE

Deferred revenue consisted of the following (dollars in thousands):

	September 30,		June 30,
	2011		2011

Amgen, Inc.	$	25,749	$	30,674
Novartis International Pharmaceutical Ltd	35,100		38,537
Celgene Corporation	13,920		15,741
Genentech, Inc.	24,779		2,228
Total deferred revenue	99,548		87,180
Less: Current portion	(62,479)		(47,874)
Deferred revenue, long term	$	37,069	$	39,306

Amgen Inc.

In December 2009, Array granted Amgen the exclusive worldwide right to develop and commercialize our small molecule glucokinase activator, AMG 151/ARRY-403. Under the Collaboration and License Agreement, we are responsible for completing Phase 1 clinical trials on AMG 151. We will also conduct further research funded by Amgen to create second generation glucokinase activators. Amgen is responsible for further development and commercialization of AMG 151 and any resulting second generation compounds. The agreement also provides us with an option to co-promote any approved drugs with Amgen in the U.S. with certain limitations.

In partial consideration for the rights granted to Amgen under the agreement, Amgen paid us an upfront fee of $60 million. Amgen will also pay us for research on second generation compounds based on the number of full-time-equivalent scientists working on the discovery program.

Array is also entitled to receive up to approximately $666 million in aggregate milestone payments if all clinical and commercialization milestones specified in the agreement for AMG 151 and at least one backup compound are achieved. We will also receive royalties on sales of any approved drugs developed under the agreement.

We estimate that our obligations under the agreement will continue until December 31, 2012 and, therefore, are recognizing the upfront fee on a straight-line basis from the date the agreement was signed on December 13, 2009 over that three-year period in License and Milestone Revenue in the accompanying Condensed Statements of Operations and Comprehensive Loss. We recognized $4.9 million of revenue under the agreement for each quarter ended September 30, 2011 and 2010.

Table of Contents

We record revenue for research performed by our scientists working on the discovery program in Collaboration Revenue in the accompanying Condensed Statements of Operations and Comprehensive Loss. We recognized $1.1 million of revenue under the agreement for each the quarters ended September 30, 2011 and 2010.

We are reimbursed for certain development activities, which is recorded in Collaboration Revenue and Cost of Sales in the accompanying Condensed Statements of Operations and Comprehensive Loss. We recognized $1.2 million in both Collaboration Revenue and Cost of Sales for the three months ended September 30, 2010 for reimbursable costs. There were no such costs for the quarter ended September 30, 2011.

Either party may terminate the agreement in the event of a material breach of a material obligation under the agreement by the other party upon 90 days prior notice. Amgen may terminate the agreement at any time upon notice of 60 or 90 days depending on the development activities going on at the time of such notice. The parties have also agreed to indemnify each other for certain liabilities arising under the agreement.

Novartis International Pharmaceutical Ltd.

Array and Novartis International Pharmaceutical Ltd. entered into a License Agreement in April 2010 granting Novartis the exclusive worldwide right to co-develop and commercialize MEK162/ARRY-162, as well as other specified MEK inhibitors. Under the agreement, we are responsible for completing the on-going Phase 1b expansion trial of MEK162 in patients with KRAS or BRAF mutant colorectal cancer and for the further development of MEK162 for up to two indications. Novartis is responsible for all other development activities and for the commercialization of products under the agreement, subject to our option to co-detail approved drugs in the U.S.

In consideration for the rights granted to Novartis under the agreement, we received $45 million, comprising an upfront and milestone payment, in the fourth quarter of fiscal 2010. In March 2011, we earned a $10 million payment which was received in the fourth quarter of fiscal 2011. We are also entitled to receive up to approximately $422 million in aggregate milestone payments if all clinical, regulatory and commercial milestones specified in the agreement are achieved. Novartis will also pay us royalties on worldwide sales of any approved drugs. In addition, so long as we continue to co-develop products under the program, the royalties on U.S. sales are at a significantly higher level than sales outside the U.S. as described below.

Array estimates that the obligations under the agreement will continue until April 2014 and, therefore, is recognizing the upfront fee and milestone payments on a straight-line basis from the date the agreement was signed in April 2010 over that four-year period. These amounts are recorded in License and Milestone Revenue in the accompanying Condensed Statements of Operations and Comprehensive Loss.

We recognized $2.5 million in revenue related to the upfront payment during both first three months of fiscal years 2012 and 2011, respectively. We recognized $938 thousand and $313 thousand in revenue related to the milestone payments during the first quarter of fiscal years 2012 and 2011, respectively.

The Novartis agreement also contains co-development rights whereby we can elect to pay a percentage share of the combined total development costs. During the first two years of the co-development period, Novartis will reimburse us for 100% of our development costs. Beginning in year three, we will begin paying our percentage share of the combined development costs since inception of the program, up to a maximum amount with annual caps, unless we opt out of paying our percentage share of these costs. If we opt out of paying our share of combined development costs with respect to one or more products, the U.S. royalty rate would then be reduced for any such product based on a specified formula, subject to a minimum that equals the royalty rate on sales outside the U.S. In this event, we would no longer have the right to develop or detail such product.

Table of Contents

We record a receivable in the accompanying Condensed Balance Sheets for the amounts due from Novartis for the reimbursement of our development costs. We accrue our percentage share of the combined development costs in the accompanying Condensed Balance Sheets as an Other Long-term Liability, on the basis of our intention to begin paying such amounts to Novartis beginning in year three of the co-development period.

We incurred reimbursable development costs of $630 thousand and $2.1 million during the first quarter of fiscal years 2012 and 2011, respectively. Our share of the combined development costs for the first quarter of fiscal years 2012 and 2011 was $1.0 million and $723 thousand, respectively, which was recorded in Cost of Revenue in the accompanying Condensed Statements of Operations and Comprehensive Loss. Additionally, we had recorded a corresponding payable of $4.6 million in Other Accrued Expenses as of September 30, 2011 and $3.6 million in Other Long-Term Liabilities as of June 30, 2011 in the accompanying Condensed Balance Sheets. The whole balance is due and payable in the first quarter of fiscal year 2013. In addition, we have a related receivable of $630 thousand and $1.0 million in Prepaid and Other Current Assets in the accompanying Condensed Balance Sheets as of September 30, 2011 and June 30, 2011, respectively.

The agreement will be in effect on a product-by-product and county-by-country basis until no further payments are due with respect to the applicable product in the applicable country, unless terminated earlier. Either party may terminate the agreement in the event of an uncured material breach of a material obligation under the agreement by the other party upon 90 days prior notice. Novartis may terminate portions of the agreement following a change in control of Array and may terminate the agreement in its entirety or on a product-by-product basis with 180 days prior notice. Array and Novartis have each further agreed to indemnify the other party for manufacturing or commercialization activities conducted by us under the agreement: negligence, willful misconduct or breach of covenants, warranties or representations made by us under the agreement.

Celgene Corporation

In September 2007, Array entered into a worldwide strategic collaboration with Celgene focused on the discovery, development and commercialization of novel therapeutics in cancer and inflammation. Under the agreement, Celgene made an upfront payment of $40 million to us in part to provide research funding for activities we conducted. We are responsible for all discovery development through Phase 1 or Phase 2a. Celgene has an option to select a limited number of drugs developed under the collaboration that are directed to up to two of four mutually selected discovery targets and will receive exclusive worldwide rights to these two drugs, except for limited co-promotional rights in the U.S. Array retains all rights to the programs for which Celgene does not exercise its option.

In June 2009, the agreement was amended to substitute a new discovery target in place of an existing target and Celgene paid us $4.5 million in consideration for the amendment. No other terms of the agreement with Celgene were modified by the amendment. The option term of this target will expire on or before June 2016, and the option term for the other targets will expire on the earlier of completion of Phase 1 or Phase 2a trials for the applicable drug or September 2014. In September 2009, Celgene notified Array that it was waiving its rights to one of the discovery targets under the collaboration, leaving Celgene the option to select two of the remaining three targets.

Array is entitled to receive, for each drug for which Celgene exercises an option, potential milestone payments of $200 million if certain discovery, development and regulatory milestones are achieved and an additional $300 million if certain commercial milestones are achieved. In November 2010, we earned and subsequently received a $10 million milestone payment upon securing an Investigational New Drug application for one of the programs. We are also entitled to receive royalties on net sales of any drugs.

Upon execution of the agreement, we estimated that the discovery obligations under the agreement would continue through September 2014 and accordingly were recognizing as revenue the upfront fees

Table of Contents

received from the date of receipt through September 2014. Effective October 1, 2010, we estimated that the discovery efforts under the agreement would conclude by March 2012. Therefore, the unamortized balance as of September 30, 2010 was being amortized on a straight-line basis over a longer period.

We subsequently estimated our development obligations related to the program for which we earned the $10 million Phase 1 milestone payment in November 2010 would continue through May 2013. Therefore, as of June 30, 2011 we were recognizing this milestone payment on a straight-line basis from the date it was earned in November 2010 through May 2013.

During the most recent quarter ended September 30, 2011, we again evaluated the remaining period for our discovery obligations under the agreement. We determined that our obligations are likely to extend through February 2013 and have adjusted the revenue recognition period accordingly. We expect to recognize the remaining unamortized balance throughout this period on a straight-line basis during periods when costs are incurred.

We recognized $1.8 million and $4.1 million in revenue related to the upfront and milestone payments during the first quarter of fiscal years 2012 and 2011, respectively.

As discussed above, we granted Celgene Corporation an option to select up to two of four programs developed under its collaboration agreement and initially concluded that Celgene was likely to continue funding with respect to two of the four programs by paying the Phase 1 milestone. Accordingly, upon execution of the agreement, we began reporting costs associated with the Celgene collaboration as 50% to Cost of Revenue, with the remaining 50% to Research and Development Expenses for Proprietary Programs. Celgene waived its rights with respect to one of the programs during the second quarter of fiscal 2010, at which time management determined that Celgene was likely to continue funding one of the remaining three programs and pay the Phase 1 milestone. Accordingly, beginning October 1, 2009, we began reporting costs associated with the Celgene collaboration as 33.3% to Cost of Revenue, with the remaining 66.7% to Research and Development Expenses for Proprietary Programs. In the second quarter of fiscal 2011, we concluded that Celgene is likely to continue funding two of the remaining three programs by paying the Phase 1 milestone. Accordingly, beginning October 1, 2010, we began reporting costs associated with the Celgene collaboration as 66.7% to Cost of Revenue, with the remaining 33.3% to Research and Development Expenses for Proprietary Programs.

Celgene can terminate any drug development program for which it has not exercised an option at any time, provided that it gives us prior notice. In this event, all rights to the program remain with Array and we would no longer be entitled to receive milestone payments for further development or regulatory milestones that it could have achieved had Celgene continued development of the program. Celgene may terminate the agreement in whole, or in part with respect to individual drug development programs for which Celgene has exercised an option, upon six months’ written notice to Array. In addition, either party may terminate the agreement, following certain cure periods, in the event of a breach by the other party of its obligations under the agreement.

Genentech, Inc.

Besides our existing agreements with Genentech, we entered into an additional oncology partnership for the development of each company’s small-molecule Checkpoint kinase 1 (Chk-1) program in August 2011. The partnered drugs include Genentech’s compound GDC-0425 and Array’s compound ARRY-575. Under the terms of the agreement, Genentech acquired a license to Array’s compound ARRY-575 and is responsible for all research, clinical development and commercialization activities of the partnered drugs. Array is required to prepare specified clinical materials for ARRY-575 for delivery to Genentech, and if we fail to certify that we have done so by the date specified in the agreement, Array will owe a payment to Genentech.

Table of Contents

We received an upfront payment of $28 million during the first quarter of fiscal 2012 and are eligible to receive payments of up to $685 million based on the achievement of clinical and commercial milestones under the agreement. We will also receive up to a double-digit royalty on sales of any drugs resulting from the partnership.

Pursuant to the accounting guidance for revenue recognition for multiple element arrangements, we have determined that Array is subject to two non-contingent deliverables related to the agreement that meet the separation criteria and are therefore treated as separate units of accounting. The two deliverables are (1) the transfer of the license and related technology with ongoing regulatory services to assist in filing the Investigational New Drug (IND) application and providing supporting data, and (2) the delivery of specified clinical materials for ARRY-575 for use in future clinical trials.

This agreement also includes a contingent deliverable whereby Genentech could, at its sole option, require us to perform chemical and manufacturing control (CMC) activities for additional drug product or improved processes. This CMC option is not considered a deliverable because the scope, likelihood and timing of the potential services are unclear. Certain critical terms of the services have not yet been negotiated, including the fee that we would receive for the service and Genentech could elect to acquire the drug materials without our assistance either by manufacturing them in-house or utilizing a third-party vendor. Therefore, no portion of the $28 million upfront payment has been allocated to the contingent CMC services that we may be obligated to perform in the future.

We estimate that our obligations related to all of the non-contingent deliverables will be completed by January 2012. The agreement provides for no general right of return for any of the non-contingent deliverables. Consequently, the amount of revenue to be allocated to each deliverable is determined using the relative selling price method under which revenue is allocated to each identified deliverable based on its estimated stand-alone value in relation to the combined estimated stand-alone value of all deliverables. The allocated consideration for each deliverable is then recognized over the related obligation period for that deliverable.

The determination of the stand-alone value for each non-contingent deliverable requires the use of significant estimates by management, including estimates of the time to complete the transfer of related technology and assist in filing the IND. Further, to determine the stand-alone value of the license and initial milestone, we considered the negotiation discussions that lead to the final terms of the agreement, publically available data for similar licensing arrangements between other companies and the economic terms of previous collaborations Array has entered into with other partners.

We recognized $8.3 million in license and milestone revenue and $2.4 in collaboration revenue related to the partnership with Genentech during the first quarter of fiscal 2012. As of September 30, 2011, deferred revenue related to this partnership consisted of $16.7 million and $5.5 million of current and long-term deferred revenue, respectively.

Table of Contents

NOTE 5 – LONG-TERM DEBT

Long-term debt consists of the following (dollars in thousands):

	September 30,		June 30,
	2011		2011

Credit Facilities	$	96,762	$	96,762
Term Loan	14,850		14,850
Long-term debt	111,612		111,612
Less: Unamortized discount on the Credit Facilities	(19,003)		(20,072)
Long-term debt, net	92,609		91,540
Less: Current portion of long-term debt	(4,350)		(150)
	$	88,259	$	91,390

Deerfield Credit Facilities

Overview

Array has two outstanding credit facilities with Deerfield. Under the Facility Agreement entered into in April 2008, we borrowed a total of $80 million (the “2008 Loan”), which was funded in two $40 million payments in June 2008 and December 2008. Terms of the 2008 Loan, including the interest rate and minimum cash and cash equivalent balances we must maintain, were amended in May 2009 when we entered into a new Facility Agreement with Deerfield. We borrowed an additional $40 million under this Facility Agreement on July 31, 2009 (the “2009 Loan”).

In May 2011, we entered into a Securities Purchase Agreement with Deerfield whereby we issued and sold to Deerfield 10,135 shares of our Series B Convertible Preferred Stock (“Series B Preferred Stock”) for an aggregate purchase price of $30 million, which was satisfied through a reduction of $30 million in principal under the credit facilities that otherwise would have been repaid by April, 2014. See Note 12 – Shareholders’ Equity for further details on the terms of the Series B Preferred Stock.

The terms of both credit facilities were also amended pursuant to a letter agreement (the “May 2011 Modification”) in connection with entering into the Securities Purchase Agreement in May 2011. The May 2011 Modification (i) extended the final payment date from April 2014 to June 30, 2016 for $20 million in principal and accrued interest, and to June 30, 2015 for the remaining principal and accrued interest, (ii) reduced the minimum Cash and Cash Equivalent and Marketable Securities balance we must maintain to avoid an increase in the interest rate, (iii) increased the amount of outstanding debt that is subject to prepayment out of a percentage of our new collaboration and licensing transactions, as discussed below, (iv) reduced the market capitalization qualification criteria for a potential acquirer in a change of control transaction from $7 billion to $3.5 billion which reduced Deerfield’s right to accelerate the loan in a potential acquisition situation; and (v) increased the maximum number of shares of our Common Stock that we may issue to satisfy payment of the debt to 11,404,000 shares. Further, we extended the term of all of the warrants to purchase Common Stock previously issued to Deerfield under the credit facilities to June 30, 2016. See the discussion in this Note under the caption “ Deerfield Credit Facilities – Warrants” below .

We accounted for the amendments to the 2008 Loan in May 2009 and to both credit facilities in May 2011 as modifications rather than extinguishments of the applicable credit facilities.

Table of Contents

Terms of the Credit Facilities

As of both September 30, 2011 and June 30, 2011, we had $96.8 million, in principal outstanding under the Deerfield credit facilities, which includes approximately $6.8 million of accrued interest under the 2008 Loan that was converted to principal when the 2009 Loan was entered into. Interest and principal may be repaid at our option at any time with cash or shares of our Common Stock that have been registered under the Securities Act of 1933, as amended, with certain restrictions. We are also required, subject to certain exceptions and conditions, to make payments of principal equal to 15% of certain amounts we receive under new licensing, partnering and other similar arrangements up to the full value of the principal and accrued interest outstanding. We received a $28 million upfront payment from a qualifying new collaboration with Genentech in September 2011. On October 6, 2011, 15% of the upfront payment, or $4.2 million was paid to Deerfield and applied against the principal balance.

Prior to the disbursement of the 2009 Loan, simple interest of 2% annually was paid quarterly and compound interest accrued at an additional 6.5% annually on the 2008 Loan. Upon disbursement of the 2009 Loan, compound interest stopped accruing and interest became payable monthly at a rate of 7.5% per annum, subject to adjustments based on our total Cash and Cash Equivalents and Marketable Securities balance as outlined below:

Total Cash, Cash Equivalents and Marketable Securities		Interest Rate

$60 million or greater		7.5%
Between $50 million and $60 million		8.5%
Between $40 million and $50 million		9.5%
Between $30 million and $40 million		12.0%
Less than $30 million		14.5%

The May 2011 Modification lowered the interest rate structure as follows:

Total Cash, Cash Equivalents and Marketable Securities		Interest Rate

$50 million or greater		7.5%
Between $40 million and $50 million		8.5%
Between $30 million and $40 million		11.5%
Less than $30 million		13.5%

If our total Cash, Cash Equivalents and Marketable Securities at the end of a fiscal quarter falls below $20 million, all amounts outstanding under the credit facilities become immediately due and payable.

The credit facilities are secured by a second priority security interest in our assets, including accounts receivable, equipment, inventory, investment property and general intangible assets, excluding copyrights, patents, trademarks, service marks and certain related intangible assets. This security interest and our obligations under the credit facilities are subordinate to our obligations to Comerica Bank and to Comerica’s security interest under the Loan and Security Agreement between Array and Comerica Bank dated June 28, 2005, as amended, which is discussed below under the caption “Term Loan and Equipment Line of Credit.”

The Facility Agreements contain representations, warranties and affirmative and negative covenants that are customary for credit facilities of this type. The Facility Agreements restrict our ability to, among other things, sell certain assets, engage in a merger or change in control transaction, incur debt, pay cash dividends and make investments. The Facility Agreements also contain events of default that are customary for credit facilities of this type, including payment defaults, covenant defaults, insolvency type

Table of Contents

defaults and events of default relating to liens, judgments, material misrepresentations and the occurrence of certain material adverse events.

Debt Issuance Costs

Array paid Deerfield transaction fees of $1.0 million on each of the two disbursements under the 2008 Loan, and of $500 thousand on July 10, 2009 and $500 thousand when the funds were drawn under the 2009 Loan. The transaction fees are included in Other Long-term Assets in the accompanying Condensed Balance Sheets and are amortized to Interest Expense in the accompanying Condensed Statements of Operations and Comprehensive Loss over the respective terms of each of the credit facilities in effect at the time.

There were no transaction fees paid to Deerfield for the May 2011 Modification. However, due to the prepayment of $30 million of principal, we charged off a proportional amount of the unamortized debt issuance costs totaling $426 thousand to Loss on Prepayment of Debt, Net in the fourth quarter of fiscal 2011. The remaining unamortized debt issuance costs continue to be amortized as noted above and $63 thousand of issuance costs was expensed in the quarter ended September 30, 2011.

Other costs in connection with these transactions were not significant and were expensed as incurred.

Embedded Derivatives

The credit facilities contain two embedded derivatives: (1) the variable interest rate structure described above and (2) Deerfield’s right to accelerate the loan upon certain changes of control of Array or an event of default, which is considered a significant transaction contingent put option. As discussed in Note 1 – Overview and Basis of Presentation under the caption Long-term Debt and Embedded Derivatives, these derivatives are valued and reported in Other Long-Term Liabilities in our financial statements and are collectively referred to as the “Embedded Derivatives.” Under the fair value hierarchy, Array measured the fair value of the Embedded Derivatives using Level III, or unobservable inputs, as there is no active market for them.

To estimate the fair value of the variable interest rate feature, we make assumptions as to the interest rates that may be in effect during the term, which in turn depends on our Cash and Cash Equivalent and Marketable Securities balance as noted above. Therefore, we must project our monthly cash balances over the term of the Credit Facilities.

To estimate the fair value of the contingent put right, we estimate the probability of a change in control of Array that would trigger Deerfield’s acceleration rights as specified in the Facility Agreements, including a change in control in which the acquirer does not meet certain financial conditions, based on size and credit worthiness. Our evaluation of this probability is based on our expectations as to the size and financial strength of probable acquirers, including history of collaboration partners, the probability of an acquisition occurring during the term of the credit facilities and other factors, all of which are inherently uncertain and difficult to predict.

The May 2011 Modification reduced the size of the acquirer that would trigger this provision and reduced the thresholds at which the higher interest rates take effect, which affected our estimated fair value of the Embedded Derivatives. The change in value of the two Embedded Derivatives as a result of the modification was $64 thousand and was recorded during the fourth quarter of fiscal 2011.

The forecasts used by management in determining the estimated fair value of the Embedded Derivatives are inherently subjective and may not reflect actual results, although management believes the assumptions upon which they are based are reasonable. Management will continue to assess the assumptions used in the determination of the fair value of the Embedded Derivatives, and future changes affecting these assumptions could materially affect their estimated fair value, with a corresponding impact on our reported results of operations. For example, if our projected cash balance decreased to between

Table of Contents

$40 million and $50 million for approximately 30 months over the remaining life of the loan, compared to the two months as assumed at September 30, 2011 in our projected cash balances, then the value of the Embedded Derivatives as of September 30, 2011 would have increased by approximately $1.1 million.

Fair Value of the Debt

Array estimates the fair value of the Deerfield debt using a combination of a discounted cash flow analysis and the Black-Derman-Toy interest rate model that incorporates the estimates discussed above for the Embedded Derivatives. The fair value of the debt was determined to be $71.4 million and $72.6 million at September 30, 2011 and June 30, 2011, respectively.

Warrants Issued to Deerfield

In consideration for providing the 2008 Loan, we issued warrants to Deerfield to purchase 6,000,000 shares of Common Stock at an exercise price of $7.54 per share (the “Prior Warrants”). Pursuant to the terms of the Facility Agreement for the 2009 Loan, the Prior Warrants were terminated and we issued new warrants to Deerfield to purchase 6,000,000 shares of Common Stock at an exercise price of $3.65 (the “Exchange Warrants”). We also issued Deerfield warrants to purchase an aggregate of 6,000,000 shares of our Common Stock at an exercise price of $4.19 (the “New Warrants” and collectively with the Exchange Warrants, the “Warrants”) when the funds were disbursed on July 31, 2009. The Exchange Warrants contain substantially the same terms as the Prior Warrants, except they have a lower per share exercise price. The Warrants were exercisable commencing January 31, 2010, and expire on April 29, 2014, which was extended to June 30, 2016 in connection with the May 2011 Modification.

We allocated the loan proceeds between the debt and the Warrants based upon their relative estimated fair values. The fair values of the Warrants was determined using a Black-Scholes option-pricing model and is recorded in Stockholders’ Equity with the offset to Debt Discount in the accompanying Condensed Balance Sheets, as discussed below.

When the Exchange Warrants were issued and when the term of the Warrants was extended in connection with the May 2011 Modification, we recorded incremental value in the Warrants to Debt Discount. We calculated the incremental value of the Exchange Warrants as the difference between the value of the Exchange Warrants at the new exercise price ($3.65) and the value of the Prior Warrants at the prior exercise price ($7.54) using a Black-Scholes option-pricing model. We calculated the incremental value of the May 2011 Modification’s new Warrant term as the difference in the fair value of the Warrants as of the date of the modification with the new term (June 30, 2016) and the value of the Warrants with the old term (April 29, 2014) using a Black-Scholes option-pricing model.

A summary of the estimated fair value of the Warrants and the loan proceeds allocated to the debt follows as of the date of each transaction (dollars in thousands):

	Proceeds		Warrant Value
2008 Loan	$	80,000	$	20,589
2009 Loan	40,000		12,426
Exchange Warrants	N/A		3,280
May 2011 Modifications	N/A		3,090
			$	39,385

Debt Discount

The estimated values of the Warrants and of the Embedded Derivatives discussed above were recorded to Debt Discount in the accompanying Condensed Balance Sheets. The Debt Discount attributable to the Warrants and the Embedded Derivatives is amortized from the respective draw dates of the applicable

Table of Contents

credit facility to the end of the term of the credit facilities, in effect at the time, using the effective interest method. We recorded the amortized portion to Interest Expense in the accompanying Condensed Statements of Operations and Comprehensive Loss.

With the May 2011 Modification and the prepayment of $30 million of principal, we wrote off a proportional amount of the unamortized Debt Discount totaling $5.8 million to Loss on Prepayment of Debt, Net in the fourth quarter of fiscal 2011. The remaining unamortized discount is being amortized as described above, and $1.1 million was expensed for the quarter ended September 30, 2011.

Summary of Interest Expense

Interest expense for the Deerfield credit facilities follows (dollars in thousands):

	Three Months Ended
	September 30,
	2011		2010

Interest paid	$	1,688	$	2,250
Amortization of the transaction fees	63		143
Amortization of the debt discounts	1,069		1,637
Change in value of the Embedded Derivatives	(15)		(290)
Total interest expense on the Deerfield Credit Facility	$	2,805	$	3,740

Term Loan and Equipment Line of Credit

Array entered into a Loan and Security Agreement (“Loan and Security Agreement”) with Comerica Bank dated June 28, 2005, which has been subsequently amended. The Loan and Security Agreement provides for a term loan, equipment advances and a revolving line of credit, all of which are secured by a first priority security interest in our assets, other than our intellectual property.

The full $10 million term loan was advanced to us on June 30, 2005. We received the total $5 million of equipment advances by June 30, 2007.

On September 30, 2009, the term and the interest rate structure of the Loan and Security Agreement were amended. The maturity date was extended 120 days from June 28, 2010 to October 26, 2010. Effective October 1, 2009, the outstanding balances under the term loan and the equipment advances accrued interest on a monthly basis at a rate equal to 2.75% above the Prime Rate, as quoted by Comerica Bank, but not less than the sum of Comerica Bank’s daily adjusting LIBOR rate plus 2.5% per annum.

On March 31, 2010, the term and interest rate structure of the Loan and Security Agreement were further amended. The term loan and equipment advances were also combined into one instrument referred to as the term loan. The maturity date was extended three years from October 26, 2010 to October 26, 2013. Effective April 1, 2010, the outstanding balances under the term loan and the equipment advances bear interest on a monthly basis at the Prime Rate, as quoted by Comerica Bank, but will not be less than the sum of Comerica Bank’s daily adjusting LIBOR rate plus an incremental contractually predetermined rate. This rate is variable, ranging from the Prime Rate to the Prime Rate plus 4%, based on the total dollar amount we have invested at Comerica and in what investment option those funds are invested.

In addition, revolving lines of credit of $6.8 million have been established to support standby letters of credit in relation to our facilities leases. These standby letters of credit expire on January 31, 2014 and August 31, 2016.

Table of Contents

As of September 30, 2011, the term loan had an interest rate of 3.25% per annum. We recognized $123 thousand and $125 thousand of interest expense for the quarters ended September 30, 2011 and 2010, respectively.

The following table outlines the level of Cash, Cash Equivalents and Marketable Securities, which we must hold in accounts at Comerica Bank per the Loan and Security Agreement based on our total Cash, Cash Equivalent and Marketable Securities, which was modified as part of the March 31, 2010 amendment.

Total Cash, Cash Equivalents and Marketable Securities	Cash on Hand at Comerica

Greater than $40 million	$	-
Between $25 million and $40 million	$	10,000,000
Less than $25 million	$	22,000,000

The Loan and Security Agreement contains representations and warranties and affirmative and negative covenants that are customary for credit facilities of this type. The Loan and Security Agreement restricts our ability to, among other things, sell certain assets, engage in a merger or change in control transaction, incur debt, pay cash dividends and make investments. The Loan and Security Agreement also contains events of default that are customary for credit facilities of this type, including payment defaults, covenant defaults, insolvency type defaults and events of default relating to liens, judgments, material misrepresentations and the occurrence of certain material adverse events.

The estimated fair value of the Loan and Security Agreement was determined using a discounted cash flow model and was calculated at $14.9 million as of September 30, 2011 and June 30, 2011.

Commitment Schedule

Array is required to make principal payments under the Credit Facilities and the Term Loan as follows (dollars in thousands):

*For the twelve months ended September 30,*
2012	$	4,350
2013	150
2014	14,550
2015	72,562
2016	20,000
	$	111,612

Table of Contents

NOTE 6 – SHARE BASED COMPENSATION EXPENSE

All share-based payments to employees are recognized in the Condensed Statements of Operations and Comprehensive Loss based on the fair value of the award on the grant date. Share-based compensation arrangements include stock option grants under the Option Plan and purchases of common stock at a discount under the ESPP. The fair value of all stock options granted by Array is estimated on the date of grant using the Black-Scholes option-pricing model. We recognize share-based compensation expense on a straight-line basis over the vesting term of stock option grants. See Note 12 - Employee Compensation Plans to our audited financial statements included in our Annual Report on Form 10-K for the year ended June 30, 2011 for more information about the assumptions we used under this valuation methodology. During the quarter ended September 30, 2011 and 2010, we made no material changes to these assumptions.

During the quarter ended September 30, 2011 and 2010, we issued new stock options to purchase a total of 151 thousand shares and 55 thousand shares of common stock, respectively. We recognized compensation expense for stock options of $543 thousand and $908 thousand for the quarter ended September 30, 2011 and 2010, respectively.

As of September 30, 2011, there was $3.1 million of unrecognized compensation expense, including the impact of expected forfeitures, for unvested share-based compensation awards granted under our equity plans, which we expect to recognize over a weighted-average period of 2.4 years.

The fair value of common stock purchased under the ESPP is based on the estimated fair value of the common stock during the offering period and the percentage of the purchase discount. During the quarter ended September 30, 2011 and 2010, we recognized compensation expense for our ESPP of $24 thousand and $190 thousand, respectively.

NOTE 7 – EQUITY DISTRIBUTION AGREEMENT

On September 18, 2009, we entered into an Equity Distribution Agreement with Piper Jaffray & Co. (the “Agent”) pursuant to which we may sell from time to time, up to an aggregate of $25 million in shares of our common stock, through the Agent that have been registered on a registration statement on Form S-3 (File No. 333-15801). Sales of the shares made pursuant to the Equity Distribution Agreement are made on the NASDAQ Stock Market by means of ordinary brokers’ transactions at market prices. Additionally, under the terms of the Equity Distribution Agreement, we may sell shares of our common stock through the Agent, on the NASDAQ Global Market or otherwise, at negotiated prices or at prices related to the prevailing market price.

We had no stock sales during the quarter ended September 30, 2011. During the three months ended September 30, 2010, we sold 473,882 shares of common stock at an average price of $3.21 per share, and received gross proceeds of $1.5 million. We paid commissions to the Agent during the quarter ended September 30, 2011 relating to these sales equal to $46 thousand and other expenses relating to the closing of the Equity Distribution Agreement totaling $22 thousand.

NOTE 8 – EMPLOYEE BONUS

We have an annual performance bonus program for our employees in which employees may receive a bonus payable in cash or in shares of common stock if we meet certain financial, discovery, development and partnering goals during a fiscal year. The bonus is typically paid in the second quarter of the next fiscal year, and we accrue an estimate of the expected aggregate bonus in Accrued Compensation and Benefits in the accompanying Condensed Balance Sheets.

As of September 30, 2011, we had $4.3 million in Accrued Compensation and Benefits in the accompanying Condensed Balance Sheets, of which $1.2 million is for the fiscal 2012 Bonus Program

Table of Contents

and $3.1 million is for the fiscal 2011 Performance Bonus Program. As of June 30, 2011 and 2010, we had $3.3 million and $6.5 million, respectively, accrued for the fiscal 2011 and fiscal 2010 Performance Bonus Programs, which is recorded in Accrued Compensation and Benefits in the accompanying Condensed Balance Sheets.

On October 4, 2011, we paid bonuses to approximately 250 eligible employees having an aggregate value of $3.1 million under the fiscal 2011 Performance Bonus Program through the issuance of a total of 1,112,577 shares of our common stock and a payment of cash to satisfy related withholding taxes.

On October 4, 2010, we paid bonuses to approximately 350 eligible employees having an aggregate value of $6.5 million under the fiscal 2010 Performance Bonus Program through the issuance of a total of 1,280,143 shares of our common stock and payment of cash to satisfy related withholding taxes.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our expectations related to the progress and success of drug discovery activities conducted by Array and by our collaborators, our ability to obtain additional capital to fund our operations and/or reduce our research and development spending, realizing new revenue streams and obtaining future out-licensing collaboration agreements that include upfront milestone and/or royalty payments, our ability to realize upfront milestone and royalty payments under our existing or any future agreements, future research and development spending and projections relating to the level of cash we expect to use in operations, our working capital requirements and our future headcount requirements. In some cases, forward-looking statements can be identified by the use of terms such as “may,” “will,” “expects,” “intends,” “plans,” “anticipates,” “estimates,” “potential,” or “continue,” or the negative thereof or other comparable terms. These statements are based on current expectations, projections and assumptions made by management and are not guarantees of future performance. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, these expectations or any of the forward-looking statements could prove to be incorrect and actual results could differ materially from those projected or assumed in the forward-looking statements. Our future financial condition, as well as any forward-looking statements are subject to significant risks and uncertainties, including but not limited to the factors set forth under the heading “Risk Factors” in Item 1A under Part II of this Quarterly Report and under Item 1A of the Annual Report on Form 10-K for the fiscal year ended June 30, 2011 we filed with the Securities and Exchange Commission on August 12, 2011. All forward- looking statements are made as of the date hereof and, unless required by law, we undertake no obligation to update any forward-looking statements.

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and notes to those statements included elsewhere in this quarterly report. The terms “we,” “us,” “our” and similar terms refer to Array BioPharma Inc.

Overview

We are a biopharmaceutical company focused on the discovery, development and commercialization of targeted small molecule drugs to treat patients afflicted with cancer and inflammatory diseases. Our proprietary drug development pipeline includes clinical candidates that are designed to regulate therapeutically important target pathways. In addition, leading pharmaceutical and biotechnology companies partner with us to discover and develop drugs across a broad range of therapeutic areas.

The four most advanced wholly owned programs that we are developing internally are:

Table of Contents

Program		Target and Indication	Clinical Status

1.	ARRY-520	KSP inhibitor for multiple myeloma or MM	Phase 2

2.	ARRY-797	p38 inhibitor for pain	Phase 2

3.	ARRY-614	p38/Tie2 dual inhibitor for myelodysplastic syndrome	Phase 1


4.	ARRY-502	CRTh2 inhibitor for Asthma	Phase 1

In addition to these development programs, our most advanced partnered drugs in clinical development are:

Program		Target and Indication	Partner	Clinical Status

1	Selumetinib (AZD6244)	MEK inhibitor for cancer	AstraZeneca	Phase 2

2.	MEK162 (ARRY-162)	MEK inhibitor for cancer	Novartis	Phase 2

3.	AMG 151 (ARRY-403)	Glucokinase activator for Type 2 diabetes	Amgen	Phase 2

4.	ARRY-543	HER2/EGFR inhibitor for cancer	ASLAN	Phase 2

5.	Danoprevir (RG7227)	Protease inhibitor for Hepatitis C virus	InterMune - developed by Roche	Phase 2

6.	LY2603618	Chk-1 inhibitor for cancer	Eli Lilly	Phase 2

7.	VTX-2337	Toll-like receptor for cancer	VentiRx	Phase 1/2

8.	ARRY-575/GDC-0425	Chk-1 inhibitor for cancer	Genentech	Phase 1

9.	GDC-0068	AKT inhibitor for cancer	Genentech	Phase 1

10.	ARRY-382	cFMS inhibitor for cancer	Celgene (option)	Phase 1

Any information we report about the development plans or the progress or results of clinical trials or other development activities of our partners is based on information that is publicly disclosed.

Under our partnered drug discovery programs, we are generally entitled to receive payments upon achievement of clinical development and commercialization milestones and royalties based on sales of any resulting drugs. Under our existing partnered program agreements, we have the potential to earn over $3.4 billion in additional milestone payments if we or our collaborators achieve the drug discovery, development and commercialization objectives detailed in those agreements. We also have the potential

Table of Contents

to earn royalties on any resulting product sales or share in the proceeds from development or commercialization arrangements resulting from 12 drug research and development programs.

Additionally, we have a portfolio of proprietary and partnered drug discovery programs generated by our internal discovery efforts. Our internal drug discovery programs include inhibitors that target Trk receptors for the treatment of pain and G-protein coupled receptor 119, or GPR-119, for the treatment of diabetes. We may choose to out-license select promising candidates through research partnerships.

We have built our clinical and discovery pipeline programs through spending $475.2 million from our inception in 1998 through September 30, 2011. During the first quarter of fiscal 2012, we spent $12.6 million in research and development for proprietary programs. In fiscal 2011, we spent $63.5 million in research and development expenses for proprietary drug discovery, compared to $72.5 million and $89.6 million for fiscal years 2010 and 2009, respectively. Since December 2009, we signed strategic collaborations with Amgen, Genentech and Novartis. Together these collaborations entitled Array to $133 million in initial payments, over $2.2 billion in potential milestone payments if all clinical and commercialization milestones under the agreements are achieved, double digit royalties and/or commercial co-detailing rights. We have received a total of $558.9 million in research funding and in upfront and milestone payments from our collaboration partners from inception through September 30, 2011.

Our significant and / or recent collaborators under our partnered programs include:

·	Amgen – We entered into a worldwide strategic collaboration with Amgen in December 2009 to develop and commercialize our glucokinase activator, AMG 151, and to discover potential back-up compounds for AMG 151.

·	ASLAN Pharmaceuticals – We entered into a collaboration and license agreement with ASLAN Pharmaceuticals in July 2011 to develop our HER2 / EGFR inhibitor, ARRY-543, which is currently entering Phase 2 development for solid tumors.

·	AstraZeneca – In December 2003, we entered into a collaboration and license agreement with AstraZeneca under which AstraZeneca received a license to three of our MEK inhibitors for cancer, including selumetinib, which is currently in multiple Phase 2 clinical trials.

·	Celgene – We entered into a worldwide strategic collaboration agreement with Celgene in September 2007 focused on the discovery, development and commercialization of novel therapeutics in cancer and inflammation. The most advanced drug is ARRY-382, a cFMS inhibitor for cancer, which is currently in a Phase 1 clinical trial.

·	Genentech – We entered into a worldwide strategic collaboration agreement with Genentech in January 2003, which was expanded in 2005, 2008, 2009 and 2011, which is focused on the discovery, development and commercialization of novel therapeutics. The most advanced drug is GDC-0068, an AKT inhibitor for cancer currently in a Phase 1b trial. The other programs under this collaboration are in preclinical development. In August 2011, we entered into an oncology partnership with Genentech for the development of each company’s small-molecule Checkpoint kinase 1 (ChK-1) program. The programs include Genentech’s compound GDC-0425 (RG7602), currently in Phase 1, and our compound, ARRY-575, which is being prepared for an investigational new drug application to initiate a Phase 1 trial in cancer patients.

·	InterMune (program acquired by Roche) – We entered into a collaboration with InterMune in 2002, which resulted in the joint discovery of danoprevir, a novel small molecule inhibitor of the Hepatitis C Virus NS3/4A protease. Roche acquired danoprevir from InterMune in 2010. Danoprevir is currently in Phase 2b clinical trials.

Table of Contents

· Novartis – We entered into a worldwide strategic collaboration with Novartis in April 2010 to develop and commercialize our MEK inhibitor, MEK162, and other MEK inhibitors identified in the agreement.

Fiscal Periods

Our fiscal year ends on June 30. When we refer to a fiscal year or quarter, we are referring to the year in which the fiscal year ends and the quarters during that fiscal year. Therefore, fiscal 2012 refers to the fiscal year ending June 30, 2012 and the first quarter refers to the quarter ended September 30, 2011.

Business Development and Collaborator Concentrations

We currently license or partner certain of our compounds and/or programs and enter into collaborations directly with pharmaceutical and biotechnology companies through opportunities identified by our business development group, senior management, scientists and customer referrals.

In general, our collaborators may terminate their collaboration agreements with 90 to 180 days’ prior notice. Our agreement with Genentech can be terminated with 120 days’ notice. Celgene may terminate its agreement with us with six months’ notice. Amgen may terminate its agreement with us at any time upon notice of 60 or 90 days depending on the development activities going on at the time of such notice. Novartis may terminate portions of the agreement following a change in control of Array and may terminate the agreement in its entirety or on a product-by-product basis with 180 days prior notice.

Additional information related to the concentration of revenue among our collaborators is reported in Note 2 – Segments, Geographic Information and Significant Collaborations to the financial statements included elsewhere in this Quarterly Report.

All of our collaboration agreements are denominated in U.S. dollars.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations are based upon our accompanying financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses as well as the disclosure of contingent assets and liabilities. We regularly review our estimates and assumptions. These estimates and assumptions, which are based upon historical experience and on various other factors believed to be reasonable under the circumstances, form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Reported amounts and disclosures may have been different had management used different estimates and assumptions or if different conditions had occurred in the periods presented.

Below is a discussion of the policies and estimates that we believe involve a high degree of judgment and complexity.

Revenue Recognition

Most of our revenue is from our collaborators for research funding, upfront or license fees and milestone payments derived from discovering and developing drug candidates. Our agreements with collaboration partners include fees based on annual rates for full-time-equivalent employees, or FTEs, working on a program and may also include non-refundable license and upfront fees, non-refundable milestone payments that are triggered upon achievement of specific research or development goals and future royalties on sales of products that result from the collaboration. A small portion of our revenue comes from the sale of compounds on a per-compound basis. We report FTE fees for discovery and the development of proprietary drug candidates that we out-license as Collaboration Revenue. License and

Table of Contents

Milestone Revenue is combined and consists of the portion of upfront fees and ongoing milestone payments from collaborators that are recognized during the applicable period.

We recognize revenue in accordance with Staff Accounting Bulletin No. 104, Revenue Recognition (“SAB 104”), which establishes four criteria, each of which must be met, in order to recognize revenue for the performance of services or the shipment of products. Revenue is recognized when (a) persuasive evidence of an arrangement exists, (b) products are delivered or services are rendered, (c) the sales price is fixed or determinable and (d) collectability is reasonably assured.

We also follow ASC 605-25 “ Revenue Recognition - Multiple-Element Arrangements” which provides guidance on the accounting for arrangements involving the delivery of multiple revenue elements when delivery of separate units of accounting occurs in different reporting periods. This standard addresses the determination of the unit(s) of accounting for multiple-element arrangements and how the arrangement’s consideration should be allocated to each unit of accounting. We adopted this accounting standard on a prospective basis for all multiple-element arrangements entered into on or after July 1, 2010 and for any multiple-element arrangements that were entered into prior to July 1, 2010 but materially modified on or after July 1, 2010. The adoption of this standard may result in revenue recognition patterns for future agreements that are materially different from those recognized for our past collaboration arrangements.

Collaboration agreements that include a combination of discovery research funding, upfront or license fees, milestone payments and/or royalties are evaluated to determine whether each deliverable under the agreement has value to the customer on a stand-alone basis and whether reliable evidence of fair value for the deliverable exists. Deliverables in an arrangement that do not meet this separation criteria are treated as a single unit of accounting, generally applying applicable revenue recognition guidance for the final deliverable to the combined unit of accounting in accordance with SAB 104.

We recognize revenue from non-refundable upfront payments and license fees on a straight-line basis over the term of performance under the agreement, which is generally the estimated research or development term. These advance payments are deferred and recorded as Deferred Revenue upon receipt, pending recognition, and are classified as a short-term or long-term liability in the accompanying Condensed Balance Sheets.

When the performance period is not specifically identifiable from the agreement, we estimate the performance period based upon provisions contained within the agreement, such as the duration of the research or development term, the existence or likelihood of achievement of development commitments and any other significant commitments of ours.

Most of our agreements provide for milestone payments. In certain cases, a portion of each milestone payment is recognized as revenue when the specific milestone is achieved based on the applicable percentage of the estimated research or development term that has elapsed to the total estimated research and/or development term. In other cases, when the milestone payment is attributed to future development obligations of Array, the revenue is recognized on a straight-line basis over the estimated remaining development period. Certain milestone payments are for activities for which there are no future obligations and as a result, are recognized when earned in their entirety.

Table of Contents

periods when appropriate to reflect changes in assumptions relating to the duration of expected performance periods. Revenue recognition for non-refundable license fees and upfront payments and milestone payments could be accelerated in the event of early termination of programs or alternatively, decelerated, if programs are extended. While changes to such estimates have no impact on our reported cash flows, our reported revenue is significantly influenced by our estimates of the period over which our obligations are expected to be performed.

Cost of Revenue and Research and Development for Proprietary Programs

We incur costs in connection with performing research and development activities which consist mainly of compensation, associated fringe benefits, share-based compensation, preclinical and clinical outsourcing costs and other collaboration-related costs, including supplies, small tools, facilities, depreciation, recruiting and relocation costs and other direct and indirect chemical handling and laboratory support costs. We allocate these costs between Cost of Revenue and Research and Development Expenses for Proprietary Programs based upon the respective time spent by our scientists on development conducted for our collaborators and for our internal proprietary programs. Cost of Revenue represents the costs associated with research and development, including preclinical and clinical trials, conducted by us for our collaborators, including co-development agreements. Research and Development for Proprietary Programs consists of direct and indirect costs for our specific proprietary programs. We do not bear any risk of failure for performing these activities and the payments are not contingent on the success or failure of the research program. Accordingly, we expense these costs when incurred.

Where our collaboration agreements provide for us to conduct research and development and for which our partner has an option to obtain the right to conduct further development and to commercialize a product, we attribute a portion of its research and development costs to Cost of Revenue based on the percentage of total programs under the agreement that we conclude is likely to continue to be funded by the partner. These costs may not be incurred equally across all programs. In addition, we continually evaluate the progress of development activities under these agreements and if events or circumstances change in future periods that we reasonably believe would make it unlikely that a collaborator would continue to fund the same percentage of programs, we will adjust the allocation accordingly. See Note 4 – Deferred Revenue, for further information about our collaborations.

Accrued Outsourcing Costs

Substantial portions of our preclinical studies and clinical trials are performed by third-party laboratories, medical centers, contract research organizations and other vendors (collectively “CROs”). These CROs generally bill monthly or quarterly for services performed or bill based upon milestone achievement. For preclinical studies, we accrue expenses based upon estimated percentage of work completed and the contract milestones remaining. For clinical studies, expenses are accrued based upon the number of patients enrolled and the duration of the study. We monitor patient enrollment, the progress of clinical studies and related activities to the extent possible through internal reviews of data reported to us by the CROs, correspondence with the CROs and clinical site visits. Our estimates depend on the timeliness and accuracy of the data provided by the CROs regarding the status of each program and total program spending. We periodically evaluate our estimates to determine if adjustments are necessary or appropriate based on information we receive.

Marketable Securities

We have designated our marketable securities as of each balance sheet date as available-for-sale securities and account for them at their respective fair values as discussed further below under the heading “ Fair Value Measurements .” Marketable securities are classified as short-term or long-term based on the nature of these securities and the availability of these securities to meet current operating requirements. Marketable securities that are readily available for use in current operations are classified as short-term available-for-sale securities and are reported as a component of current assets in the accompanying Condensed Balance Sheets. Marketable securities that are not considered available for

Table of Contents

use in current operations (including when active markets for such securities do not exist) are classified as long-term available-for-sale securities and are reported as a component of long-term assets in the accompanying Condensed Balance Sheets.

Securities that are classified as available-for-sale are carried at fair value, including accrued interest, with temporary unrealized gains and losses reported as a component of Stockholders’ Deficit until their disposition. We review all available-for-sale securities each period to determine if they remain available-for-sale based on our then current intent and ability to sell the security if we are required to do so. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization is included in Interest Income in the accompanying Condensed Statements of Operations and Comprehensive Loss. Realized gains and losses on auction rate securities, or ARS, we held along with declines in value judged to be other-than-temporary are reported in Realized Gains on Auction Rate Securities, Net in the accompanying Condensed Statements of Operations and Comprehensive Loss when recognized. The cost of securities sold is based on the specific identification method.

We sold our remaining ARS during the quarter ended March 31, 2011. Prior to their disposition, we measured the ARS under the fair value hierarchy described below under the heading “ Fair Value Measurements ,” using Level III, or unobservable inputs, as there was no active market for the securities. The most significant unobservable inputs used in this method were estimates of the amount of time until an event resulting in the liquidity of the ARS would occur and the discount rate, which incorporates estimates of credit risk and a liquidity premium (discount). Due to the inherent complexity in valuing these securities, we engaged a third-party valuation firm to perform an independent valuation of the ARS as part of our overall fair value analysis beginning with the first quarter of fiscal 2009 and continuing through the quarter ended December 31, 2010.

See Note 3 – Marketable Securities in our Annual Report on Form 10-K for the year ended June 30, 2011 filed with the SEC on August 12, 2011 for additional information about our investments in ARS.

Fair Value Measurements

Our financial instruments are recognized and measured at fair value in our financial statements and primarily consist of cash and cash equivalents, marketable securities, long-term investments, trade receivables and payables, long-term debt, embedded derivatives associated with the long-term debt and warrants. We use different valuation techniques to measure the fair value of assets and liabilities, as discussed in more detail below. Fair value is defined as the price that would be received or paid to sell the financial instruments in an orderly transaction between market participants at the measurement date. We use a framework for measuring fair value based on a hierarchy that distinguishes sources of available information used in fair value measurements and categorizes them into three levels:

· Level I: Quoted prices in active markets for identical assets and liabilities.

· Level II: Observable inputs other than quoted prices in active markets for identical assets and liabilities.

· Level III: Unobservable inputs.

We disclose assets and liabilities measured at fair value based on their level in the hierarchy. Considerable judgment is required in interpreting market and other data to develop estimates of fair value for assets or liabilities for which there are no quoted prices in active markets, which include warrants we have issued to Deerfield in connection with our long-term debt with Deerfield and the embedded derivatives associated with the long-term debt. The use of different assumptions and/or estimation methodologies may have a material effect on their estimated fair value. Accordingly, the fair value estimates we disclose may not be indicative of the amount that we or holders of the instruments could realize in a current market exchange.

Table of Contents

We periodically review the realizability of each investment when impairment indicators exist with respect to the investment. If other-than-temporary impairment of the value of an investment is deemed to exist, the cost basis of the investment is written down to its then estimated fair value.

Long-term Debt and Embedded Derivatives

The terms of our long-term debt are discussed in detail elsewhere in this Form 10-Q in Note 5 – Long-term Debt . The accounting for these arrangements is complex and is based upon significant estimates by management. We review all debt agreements to determine the appropriate accounting treatment when the agreement is entered into and review all amendments to our debt agreements to determine if the changes require accounting for the amendment as a modification, or as an extinguishment and new debt. We also review each long-term debt arrangement to determine if any feature of the debt requires bifurcation and/or separate valuation. These may include hybrid instruments, which are comprised of at least two components ((1) a debt host instrument and (2) one or more conversion features), warrants and other embedded derivatives, such as puts and other rights of the debt holder.

We currently have two embedded derivatives related to our long-term debt with Deerfield. One of the embedded derivatives is a variable interest rate structure that constitutes a liquidity-linked variable spread feature. The other is a significant transaction contingent put option relating to Deerfield’s ability to accelerate the repayment of the debt in the event of certain changes in control of our company. Such event would occur if the acquirer did not meet certain financial conditions, based on size and credit worthiness. Collectively, they are referred to as the “Embedded Derivatives.” Under the fair value hierarchy, we measure the fair value of the Embedded Derivatives using Level III, or unobservable inputs, as there is no active market for them, and calculate fair value using a combination of a discounted cash flow analysis and the Black-Derman-Toy interest rate model.

The fair value of the variable interest rate structure is based on our estimate of the probable effective interest rate over the term of the Deerfield credit facilities. Because the applicable interest rate is based on our cash position during the term of the loan, the determination of the probably effective interest rate requires us to estimate our cash flow forecasts, which include our expectations of future cash inflows from upfront fees, milestone payments and issuances of equity. The fair value of the put option is based on our estimate of the probability that a change in control that triggers Deerfield’s right to accelerate the debt will occur. With those inputs, the fair value of each Embedded Derivative is calculated as the difference between the fair value of the Deerfield credit facilities if the Embedded Derivatives are included and the fair value of the Deerfield credit facilities if the Embedded Derivatives are excluded.

Due to the inherent complexity in valuing the Deerfield credit facilities and the Embedded Derivatives, we engaged a third-party valuation firm to perform the valuation as part of our overall fair value analysis. The assumptions used in determining the estimated fair value of the Embedded Derivatives were based on management’s judgment and the use of different assumptions could result in significantly different estimated fair values.

The fair value of the Embedded Derivatives is recorded as a component of Other Long-term Liabilities in the accompanying Condensed Balance Sheets. We recorded fair values for the Embedded Derivatives of $526 thousand and $540 thousand at September 30, 2011 and June 30, 2011, respectively. The initial fair value of the Embedded Derivatives was recorded as Derivative Liabilities and as Debt Discount in our Condensed Balance Sheets. Each quarter, we determine whether any adjustments to the fair value of the Embedded Derivatives based on management’s then current assumptions are necessary and record any changes in value to Derivative Liabilities in the Condensed Balance Sheets and Interest Expense in the accompanying Condensed Statements of Operations and Comprehensive Loss.

Warrants that we have issued to Deerfield in connection with our long-term debt arrangements have been classified as equity. We value the warrants at issuance based on a Black-Scholes option-pricing model and then allocate a portion of the proceeds under the debt to the warrants based upon their relative fair values. As discussed under Note 5 - Long-Term Debt, when certain terms of the warrants are amended, we calculate and record any changes to the fair value of the warrants as of the date of amendment using

Table of Contents

the Black-Scholes option-pricing model. We record the fair value of the warrants in Stockholders’ Equity with the offset to Debt Discount. We amortize the Debt Discount from the respective draw dates to the end of the term of the Deerfield credit facilities using the effective interest method and record the amortized portions as Interest Expense in the accompanying Condensed Statements of Operations and Comprehensive Loss.

Transaction fees paid in connection with our long-term debt arrangements that qualify for capitalization are recorded as Other Long-Term Assets in the Condensed Balance Sheets and amortized to Interest Expense in the accompanying Condensed Statements of Operations and Comprehensive Loss using the effective interest method over the term of the underlying debt agreement.

Recent Accounting Pronouncements

Table of Contents

Results of Operations

License and Milestone Revenue

License and Milestone Revenue is combined and consists of upfront license fees and ongoing milestone payments from collaborators.

Below is a summary of our license and milestone revenue (dollars in thousands):

	Three Months Ended September 30,				Change 2011 vs. 2010
	2011		2010		$		%

License revenue	$	14,081	$	11,731	2,350		20%
Milestone revenue	4,381		1,062		3,319		313%
Total revenue	$	18,462	$	12,793	$	5,669	44%

License revenue increased $2.4 million, or 20%, for the quarter ended September 30, 2011 compared to the same period last year. During the current quarter, we recognized $5.8 million under our new Chk-1 licensing agreement with Genentech. This was partially offset by $3.2 million less revenue recognized under the Celgene collaboration due to our revised estimate of the remaining performance period effective July 1, 2011 as discussed in Note 4 – Deferred Revenue to the accompanying Condensed Financial Statements.

Milestone Revenue increased $3.3 million, or 313%, for the quarter ended September 30, 2011 compared to the same period last year. In the current quarter, we recognized $2.5 million from Genentech, $943 thousand from Celgene, and $938 thousand from Novartis. In the same period of the prior year, we recognized $750 thousand in milestones from Genentech and $313 thousand from Novartis.

Collaboration Revenue

Collaboration Revenue consists of revenue for our performance of drug discovery and development activities in collaboration with partners, which include co-development of proprietary drug candidates we out-license as well as screening, lead generation and lead optimization research, custom synthesis and process research and to a small degree the development and sale of chemical compounds.

Below is a summary of our collaboration revenue (dollars in thousands):

	Three Months Ended September 30,				Change 2011 vs. 2010
	2011		2010		$		%

Collaboration revenue	$	3,669	$	5,720	$	(2,051)	-36%

Collaboration revenue decreased $2.1 million, or 36%, for the quarter ended September 30, 2011 compared to the same period last year. During the current quarter, we recognized $925 thousand less in revenue on our collaboration with Genentech due to having fewer scientists engaged on the Genentech programs and $1.2 million less revenue from reimbursed clinical development costs for our collaboration with Amgen for AMG 151/ARRY-403.

Table of Contents

Cost of Revenue

Cost of Revenue represents costs attributable to discovery and development including preclinical and clinical trials we may conduct for our collaborators and the cost of chemical compounds sold from our inventory. These costs consist mainly of compensation, associated fringe benefits, share based compensation, preclinical and clinical outsourcing costs and other collaboration related costs, including supplies, small tools, travel and meals, facilities, depreciation, recruiting and relocation costs and other direct and indirect chemical handling and laboratory support costs.

Below is a summary of our Cost of Revenue (dollars in thousands):

	Three Months Ended September 30,				Change 2011 vs. 2010
	2011		2010		$		%

Cost of revenue	$	6,444	$	7,281	$	(837)	-11%
Cost of revenue as a percentage of total revenue	29.1%		39.3%

Cost of Revenue decreased in absolute dollars and as a percentage of total revenue for the three months ended September 30, 2011 compared to the same period in the prior year. The decrease in absolute dollars was partially due to progression of our partnered program with Amgen to develop AMG 151/ARRY-403. We completed our obligations for the program during the first half of fiscal 2011 and therefore have no comparable costs in the current period. Additionally, during the current quarter we incurred fewer costs under our agreement with Celgene and had fewer scientists engaged on our collaboration with Genentech as compared to the prior year. Partially offsetting these decreased costs was an increase in our share of the costs to co-develop MEK162 with Novartis.

The decrease of Cost of Revenue as a percentage of total revenue during the three-month period was the result of greater License and Milestone Revenue recognized during the periods.

Research and Development for Proprietary Programs

Our Research and Development Expenses for Proprietary Drug Discovery include costs associated with our proprietary drug programs for scientific and clinical personnel, supplies, inventory, equipment, small tools, travel and meals, depreciation, consultants, sponsored research, allocated facility costs, costs related to preclinical and clinical trials and share based compensation. We manage our proprietary programs based on scientific data and achievement of research plan goals. Our scientists record their time to specific projects when possible; however, many activities simultaneously benefit multiple projects and cannot be readily attributed to a specific project. Accordingly, the accurate assignment of time and costs to a specific project is difficult and may not give a true indication of the actual costs of a particular project. As a result, we do not report costs on a program basis.

Table of Contents

Below is a summary of our research and development expenses by categories of costs for the periods presented (dollars in thousands):

	Three Months Ended September 30,				Change 2011 vs. 2010
	2011		2010		$		%

Salaries, benefits and share-based
compensation	$	5,163	$	6,576	$	(1,413)	-21%
Outsourced services and consulting	3,515		2,599		916		35%
Laboratory supplies	1,563		2,333		(770)		-33%
Facilities and depreciation	1,997		2,021		(24)		-1%
Other	360		326		34		10%
Total research and development for proprietary programs	$	12,598	$	13,855	$	(1,257)	-9%

Research and Development for Proprietary Programs for the first three months of fiscal 2012 decreased compared to the prior year because we moved development costs for our Chk-1 inhibitor (ARRY-575) and our HER2/EGFR inhibitor for cancer (ARRY-543) out of Research and Development for Proprietary Programs to Cost of Revenue as a result of partnering those programs with Genentech and ASLAN, respectively. In addition, compensation-related expenses decreased as a result of our reduction in force in June 2011. These decreases were partially offset by increased costs to advance our wholly-owned programs through clinical studies.

General and Administrative Expenses

General and Administrative Expenses consist mainly of compensation and associated fringe benefits not included in Cost of Revenue or Research and Development Expenses for Proprietary Drug Discovery and include other management, business development, accounting, information technology and administration costs, including patent filing and prosecution, recruiting and relocation, consulting and professional services, travel and meals, sales commissions, facilities, depreciation and other office expenses.

Below is a summary of our General and Administrative Expenses (dollars in thousands):

	Three Months Ended September 30,				Change 2011 vs. 2010
	2011		2010		$		%

General and administrative	$	3,720	$	4,268	$	(548)	-13%

General and administrative expenses decreased during the three months ended September 30, 2012 compared to the same period in the prior year. The decrease was the result of reduced compensation-related expenses subsequent to our reduction in force in June 2011 and reduced costs incurred during the period to obtain and protect our patents. Partially offsetting these decreases were approximately $100 thousand in additional costs for professional services related to business development activities compared to the same period during the prior year.

Table of Contents

Other Income (Expense)

Below is a summary of our Other Income (Expense) (dollars in thousands):

	Three Months Ended September 30,				Change 2011 vs. 2010
	2011		2010		$		%

Gains (losses) on auction rate securities	$	-	$	(67)	$	67	-100%
Interest income	6		220		(214)		-97%
Interest expense	(2,955)		(3,892)		937		-24%
Total other expense, net	$	(2,949)	$	(3,739)	$	790	-21%

Below is a summary of the components of Interest Expense (dollars in thousands):

	Three Months Ended
	September 30,
	2011		2010

Deerfield Credit Facilities:
Interest paid	$	1,688	$	2,250
Amortization of the transaction fees	63		143
Amortization of the debt discounts	1,069		1,637
Change in value of the Embedded Derivatives	(15)		(290)
Total interest expense on Deerfield Credit Facility	2,805		3,740

Term Loan:
Variable interest and amortization of transaction fees	150		152
Total interest expense on Comerica Loan	150		152
Total interest expense	$	2,955	$	3,892

The reduced interest paid on the Deerfield Credit Facilities is the result of the early payment of $30 million of principal in May 2011.

Liquidity and Capital Resources

We have incurred operating losses and have an accumulated deficit as a result of ongoing research and development spending. As of September 30, 2011, we had an accumulated deficit of $550.7 million. We had net loss of $3.6 million for the three months ended September 30, 2011. We had net losses of $56.3 million, $77.6 million, and $127.8 million for the fiscal years ended June 30, 2011, 2010, and 2009 respectively.

We have historically funded our operations from upfront fees and license and milestone payments received under our collaboration and out-licensing transactions, from the issuance and sale of equity securities and through debt provided by our credit facilities. Since December 1, 2009, Array has received $161 million from these sources, including the following payments under our collaborations:

· In December 2009, we received a $60 million upfront payment from Amgen Inc. under a Collaboration and License Agreement.

Table of Contents

· In May and June 2010, we received a total of $45 million in upfront and milestone payments under a License Agreement with Novartis Pharmaceutical International Ltd.

· In December 2010, we received $10 million in a milestone payment under a License Agreement with Celgene Corporation.

· In May 2011, we received $10 million in a milestone payment under a License Agreement with Novartis Pharmaceutical International Ltd.

· In September 2011, we received $28 million in an upfront payment from Genentech under a License Agreement.

Until we can generate sufficient levels of cash from our operations, which we do not expect to achieve in the foreseeable future, we will continue to utilize our existing cash, cash equivalents and marketable securities, and will continue to depend on funds provided from the sources mentioned above, which may not be available or forthcoming.

Prior to the reduction in force we implemented in June 2011, we were using approximately $20 million per quarter to fund our operations. Although we are realizing savings from the reduction in force, these savings may be partially offset in the future by increased development costs as our wholly-owned development programs progress into Phase 2 and Phase 3 clinical trials. We could be required to reduce or eliminate such increased spending for development however, if sufficient funds are not available when needed.

We believe that our cash, cash equivalents and marketable securities as of September 30, 2011 will enable us to continue to fund our operations in the normal course of business for at least the next 12 months. We anticipate receiving additional funding from milestone payments from existing collaborations and plan to continue to satisfy all or a portion of the interest payment obligations under the credit facilities with Deerfield with the proceeds from sales of our common stock pursuant to the Equity Distribution Agreement with Piper Jaffray & Co. discussed in Note 7 – Equity Distribution Agreement or through the issuance of shares of common stock to Deerfield in accordance with the Facility Agreements with Deerfield. We may also fund operations through the sale of our debt or equity securities which would result in dilution to existing shareholders.

Our ability to realize milestone or royalty payments under existing collaboration agreements and to enter into new partnering arrangements that generate additional revenue through upfront fees and milestone or royalty payments is subject to a number of risks, many of which are beyond our control and include the following:

Table of Contents

· The drug development process is risky and highly uncertain and we may not be successful in generating proof-of-concept data to create partnering opportunities and, even if we are, we or our collaborators may not be successful in commercializing drug candidates we create;

· Our collaborators have substantial control and discretion over the timing and continued development and marketing of drug candidates we create and, therefore, we may not receive milestone, royalty or other payments when anticipated or at all;

· The drug candidates we develop may not obtain regulatory approval;

· If regulatory approval is received, drugs we develop will remain subject to regulation or may not gain market acceptance, which could delay or prevent us from generating milestone, royalty revenue or product revenue from the commercialization of these drugs; and

· The spending priorities and willingness of pharmaceutical companies to in-license drugs for further development and commercialization.

Our assessment of our future need for funding is a forward-looking statement that is based on assumptions that may prove to be wrong and that involve substantial risks and uncertainties. Our actual future capital requirements could vary as a result of a number of factors, including:

· Our ability to enter into agreements to out-license, co-develop or commercialize our proprietary drug candidates and the timing of payments under those agreements throughout each candidate’s development stage;

· The number and scope of our research and development programs;

· The progress and success of our preclinical and clinical development activities;

· The progress and success of the development efforts of our collaborators;

· Our ability to maintain current collaboration agreements;

· The costs involved in enforcing patent claims and other intellectual property rights;

· The costs and timing of regulatory approvals; and/or

· The expenses associated with unforeseen litigation, regulatory changes, competition and technological developments, general economic and market conditions and the extent to which we acquire or invest in other businesses, products and technologies.

Cash, Cash Equivalents and Marketable Securities

Cash equivalents are short-term, highly liquid financial instruments that are readily convertible to cash and have maturities of 90 days or less from the date of purchase.

Short-term marketable securities consist primarily of U.S. government agency obligations with maturities of greater than 90 days when purchased. Long-term marketable securities as of September 30, 2011 are primarily related to our Deferred Compensation Plan.

Table of Contents

Below is a summary of our cash, cash equivalents and marketable securities (dollars in thousands):

	September 30,		June 30,
	2011		2011		$ Change

Cash and cash equivalents	$	72,367	$	48,099	$	24,268
Marketable securities - short-term	4,855		15,986		(11,131)
Marketable securities - long-term	484		623		(139)
Total	$	77,706	$	64,708	$	12,998

Cash Flow Activities

Below is a summary of our cash flows (dollars in thousands):

	Three Months Ended
	September 30,
	2011		2010		$ Change

Cash flows provided by (used in):
Operating activities	$	13,616	$	(20,914)	$	34,530
Investing activities	10,614		19,816		(9,202)
Financing activities	38		1,544		(1,506)
Total	$	24,268	$	446	$	23,822

Net cash provided by operating activities for the quarter ended September 30, 2011 increased $34.5 million over the same period in the prior year. This was primarily due to the $28 million upfront license fee received from Genentech during the current period, as well as decreased operating expenses subsequent to our reduction in force in June 2011.

Net cash provided by investing activities was $10.6 million and $19.8 million in the three months ended September 30, 2011 and 2010, respectively. The decrease is due to fewer sales of marketable securities in the quarter ended September 30, 2011 compared to the same quarter in 2010.

Net cash provided by financing activities was $38 thousand and $1.5 million in the three months ended September 30, 2011 and 2010, respectively. The difference between the periods is primarily attributable to $1.5 million received for the sale of shares of our common stock under our Equity Distribution Agreement with Piper Jaffray & Co during the prior fiscal year as discussed in Note 7 – Equity Distribution Agreement.

Table of Contents

Obligations and Commitments

The following table shows our contractual obligations and commitments as of September 30, 2011 (dollars in thousands):

	Less Than 1 Year		1 to 3 Years		4 to 5 Years		Over 5 Years		Total

Debt obligations (1)	$	4,350	$	14,700	$	92,562	$	-	$	111,612

Interest on debt obligations (3) (4)	7,233		14,017		8,250		-		29,500

Operating lease commitments (2)	8,088		16,487		14,756		-		39,331

Purchase obligations (2)	8,656		4,322		-		-		12,978

Total	$	28,327	$	49,526	$	115,568	$	-	$	193,421

(1)	Reflected in the accompanying Condensed Balance Sheets.
(2)	These obligations are not reflected in the accompanying Condensed Balance Sheets.
(3)	Interest on the variable debt obligations under the Term Loan with Comerica Bank is calculated at 3.25%, the interest rate in effect as of September 30, 2011.
(4)	Interest on the variable debt obligation under the credit facilities with Deerfield is calculated at 7.5%, the interest rate in effect as of September 30, 2011.

We are obligated under non-cancelable operating leases for all of our facilities and to a limited degree, equipment leases. Original lease terms for our facilities in effect as of September 30, 2011 were five to 10 years and generally require us to pay the real estate taxes, certain insurance and other operating costs. Equipment lease terms generally range from three to five years.

Purchase obligations totaling $9.5 million are for outsourced services for clinical trials and other research and development costs. Purchase obligations totaling $2.3 million are for software related expenses. The remaining $1.2 million is for all other purchase commitments.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of loss that may impact our financial position, results of operations or cash flows due to adverse changes in financial and commodity market prices and fluctuations in interest rates. Following the disposition of our remaining ARS in the quarter ended March 31, 2011, we no longer have liquidity risk associated with our ARS/marketable securities. All of our collaboration agreements and nearly all purchase orders are denominated in U.S. dollars. As a result, historically and as of September 30, 2011, we have had little or no exposure to market risk from changes in foreign currency or exchange rates.

Our investment portfolio is comprised primarily of readily marketable, high-quality securities diversified and structured to minimize market risks. We target our average portfolio maturity at one year or less. Our exposure to market risk for changes in interest rates relates primarily to our investments in marketable securities. Marketable securities held in our investment portfolio are subject to changes in market value in response to changes in interest rates and liquidity. A significant change in market interest rates could have a material impact on interest income earned from our investment portfolio. A theoretical 100 basis point change in interest rates and security prices would impact our annual net loss positively or negatively by $777 thousand based on the current balance of $77.7 million of investments classified as cash and cash equivalents and short-term and long-term marketable securities available for sale.

As of September 30, 2011, we had $111.6 million of debt outstanding, exclusive of the debt discount of $19 million. The term loan under our senior secured Term Loan with Comerica Bank of $14.9 million is variable rate debt. Assuming constant debt levels, a theoretical change of 100 basis points (1%) on our

Table of Contents

current interest rate of 3.25% on the Comerica debt as of September 30, 2011 would result in a change in our annual interest expense of $149 thousand. The interest rate on our long-term debt under the credit facilities with Deerfield is variable based on our total cash, cash equivalents and marketable securities balances. However, as long as our total cash, cash equivalents and marketable securities balances remain above $50 million; our interest rate is fixed at 7.5%. Assuming constant debt levels, a theoretical change of 100 basis points on our current rate of interest of 7.5% on the Deerfield credit facilities as of September 30, 2011 would result in a change in our annual interest expense of $900 thousand.

Historically and as of September 30, 2011, we have not used foreign currency derivative instruments or engaged in hedging activities.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our Chief Executive Officer, Chief Financial Officer and other senior management personnel, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of September 30, 2011 were effective to provide a reasonable level of assurance that the information we are required to disclose in reports that we submit or file under the Securities Act of 1934 (i) is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms; and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures are designed to provide reasonable assurance that such information is accumulated and communicated to management. Our disclosure controls and procedures include components of our internal control over financial reporting. Management’s assessment of the effectiveness of our disclosure controls and procedures is expressed at a reasonable level of assurance because an internal control system, no matter how well designed and operated, can provide only reasonable, but not absolute, assurance that the internal control system’s objectives will be met.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 1A. RISK FACTORS

Investing in our common stock is subject to a number of risks and uncertainties. We have updated the following risk factors to reflect changes during the quarter ended September 30, 2011 we believe to be material to the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended June 30, 2011 filed with the Securities and Exchange Commission. The risks and uncertainties described below are not the only ones that we face and are more fully described in our Annual Report on Form 10-K and in other reports we file with the Securities and Exchange Commission. Additional risks and uncertainties not

Table of Contents

presently known to us or that we currently believe are immaterial also may negatively impact our business.

Risks Related to Our Business

We have a history of operating losses and may not achieve or sustain profitability.

We have incurred significant operating and net losses and negative cash flows from operations since our inception. As of September 30, 2011, we had an accumulated deficit of $550.7 million. We had a net loss of $3.6 million for the quarter ended September 30, 2011. We had net losses of $56.3 million, $77.6 million, and $127.8 million, for the fiscal years ended June 30, 2011, 2010, and 2009, respectively. We expect to incur additional losses and negative cash flows in the future, and these losses may continue or increase in part due to anticipated levels of expenses for research and development, particularly clinical development, expansion of our clinical and scientific capabilities, and acquisitions of complementary technologies or in-licensed drug candidates. As a result, we may not be able to achieve or maintain profitability.

Moreover, if we do achieve profitability, the level of any profitability cannot be predicted and may vary significantly. Much of our current revenue is non-recurring in nature and unpredictable as to timing and amount. While several of our out-licensing and collaboration agreements provide for royalties on product sales, given that none of our drug candidates have been approved for commercial sale, that our drug candidates are at early stages of development and that drug development entails a high degree of risk of failure, we do not expect to receive any royalty revenue for several years, if at all. For the same reasons, we may never realize much of the milestone revenue provided for in our out-license and collaboration agreements. Similarly, drugs we select to commercialize ourselves or partner for later-stage co-development and commercialization may not generate revenue for several years, or at all.

If we need but are unable to obtain additional funding to support our operations, we could be required to reduce our research and development activities or curtail our operations and it may lead to uncertainty about our ability to continue to operate as a going concern.

We have expended substantial funds to discover and develop our drug candidates and additional substantial funds will be required for further development, including preclinical testing and clinical trials of any product candidates we develop internally. Additional funds will be required to manufacture and market any products we own or retain rights to that are approved for commercial sale. Because the successful development of our products is uncertain, we are unable to precisely estimate the actual funds we will require to develop and potentially commercialize them.

We have historically funded our operations through revenue from our collaborations and out-license transactions, the issuance of equity securities and debt financing. We currently believe that our existing cash resources will enable us to continue to fund our current operations for at least the next 12 months. However, we will continue to be dependent upon such sources for the foreseeable future. Our ability to obtain additional funding when needed, changes to our operating plans, our existing and anticipated working capital needs, the acceleration or modification of our planned research and development activities or expenditures, increased expenses or other events may affect our need for additional capital in the future and may require us to seek additional funding sooner than anticipated. Additional funding may include milestone payments under existing collaborations, upfront fees or research funding through new out-licensing transactions, sales of debt or equity securities and/or securing additional credit facilities.

If we are unable to generate enough revenue or secure additional sources of funding and/or reduce our current rate of research and development spending or further reduce our expenses, we may be required to curtail operations significantly, which could prevent us from successfully executing our operating plan and could raise substantial doubt as to our ability to continue as a going concern in future periods. Even if we are able to secure the additional sources of funding, it may not be on terms that are favorable or satisfactory to us and may result in significant dilution to our stockholders. These events may result in an

Table of Contents

inability to maintain a level of liquidity necessary to continue operating our business and the loss of all or part of the investment of our stockholders in our common stock. In addition, if we are unable to maintain certain levels of cash and marketable securities, our obligations under our credit facilities with Deerfield Private Design Fund, L.P. and Deerfield Private Design International Fund, L.P. (who we refer to collectively as Deerfield) and our loan agreement with Comerica Bank may be accelerated.

Because we rely on a small number of collaborators for a significant portion of our revenue, if one or more of our major collaborators terminates or reduces the scope of its agreement with us, our revenue may significantly decrease.

A relatively small number of collaborators account for a significant portion of our revenue. Genentech, Amgen, Novartis and Celgene accounted for 48%, 27%, 16% and 8%, respectively, of our total revenue for the first quarter of fiscal 2012 and 23%, 39%, 15% and 22% for the first quarter of the prior year, respectively. We expect that revenue from a limited number of collaborators, including Celgene, Genentech, Amgen and Novartis, will account for a large portion of our revenue in future quarters. In general, our collaborators may terminate their contracts with us upon 60 to 180 days’ notice for a number of reasons. In addition, some of our major collaborators can determine the amount of products delivered and research or development performed under these agreements. As a result, if any one of our major collaborators cancels, declines to renew or reduces the scope of its contract with us, our revenue may significantly decrease.

We may not be successful in entering into additional out-license agreements on favorable terms, which may adversely affect our liquidity or require us to change our spending priorities on our proprietary programs.

We are committing significant resources to create our own proprietary drug candidates and to build a commercial-stage biopharmaceutical company. We have built our clinical and discovery programs through spending $475.2 million from our inception through September 30, 2011. During the first quarter of fiscal 2012 we spent $12.6 million in research and development for proprietary programs. In fiscal 2011, we spent $63.5 million in research and development for proprietary programs, compared to $72.5 million and $89.6 million for fiscal years 2010 and 2009, respectively. Our proprietary drug discovery programs are in their early stage of development and are unproven. Our ability to continue to fund our planned spending on our proprietary drug programs and in building our commercial capabilities depends to a large degree on upfront fees, milestone payments and other revenue we receive as a result of our partnered programs. To date, we have entered into eight out-licensing agreements for the development and commercialization of our drug candidates, and we plan to continue initiatives during fiscal 2012 to partner select clinical candidates to obtain additional capital. We may not be successful, however, in entering into additional out-licensing agreements with favorable terms, including upfront, milestone, royalty and/or license payments and the retention of certain valuable commercialization or co-promote rights, as a result of factors, many of which are outside of our control. These factors include:

· Our ability to create valuable proprietary drugs targeting large market opportunities;

· Research and spending priorities of potential licensing partners;

· Willingness of and the resources available to pharmaceutical and biotechnology companies to in-license drug candidates to fill their clinical pipelines;

· The success or failure, and timing, of pre-clinical and clinical trials for our proprietary programs we intend to out-license; or

· Our ability or inability to generate proof-of-concept data and to agree with a potential partner on the value of proprietary drug candidates we are seeking to out-license, or on the related terms.

If we are unable to enter into out-licensing agreements and realize milestone, license and/or upfront fees when anticipated, it may adversely affect our liquidity and we may be forced to curtail or delay development of all or some of our proprietary programs, which in turn may harm our business and the

Table of Contents

value of our stock. In addition, insufficient funds may require us to relinquish greater rights to product candidates at an earlier stage of development or on less favorable terms to us or our stockholders than we would otherwise choose in order to obtain funding for further development and/or upfront license fees needed to fund our operations.

If we need but are unable to obtain additional funding to support our operations, we could be unable to successfully execute our operating plan or be forced to reduce our operations.

We have historically funded our operations through revenue from our collaborations and out-license transactions, the issuance of equity securities and debt financing. We used $14.4 million for our operating activities in the first quarter of fiscal 2012, excluding the one-time cash receipt of $28 million from Genentech under the licensing agreement for Chk-1. A portion of our cash flow is dedicated to the payment of interest under our existing senior secured Term Loan with Comerica Bank, and to the payment of principal and interest on our credit facilities with Deerfield. In addition, the principal amounts outstanding under the senior secured Term Loan and the Deerfield Credit Facilities becomes due and payable in 2013 and 2014, respectively. Our debt obligations could therefore render us more vulnerable to competitive pressures and economic downturns and impose some restrictions on our operations.

Our current operating plan and assumptions could change as a result of many factors, and we could require additional funding sooner than anticipated. If we are unable to meet our capital requirements from cash generated by our future operating activities and are unable to obtain additional funds when needed, we may be required to curtail operations significantly or to obtain funds through other arrangements on unattractive terms, which could prevent us from successfully executing our operating plan. If we raise additional capital through the sale of equity or convertible debt securities, the issuance of those securities would result in dilution to our stockholders.

Because our stock price may be volatile, our stock price could experience substantial declines.

The market price of our common stock has historically experienced and may continue to experience volatility. The high and low closing bids for our common stock were $2.62 and $1.95, respectively, for the first quarter of fiscal 2012; $3.58 and $2.06, respectively, during fiscal 2011; $4.45 and $1.72, respectively, during fiscal 2010; and $8.79 and $2.51, respectively, during fiscal 2009. Our quarterly operating results, the success or failure of our internal drug discovery efforts, decisions to delay, modify or cease one or more of our development programs, negative data or adverse events reported on programs in clinical trials we or our collaborators are conducting, uncertainties about our ability to continue to operate as a going concern, changes in general conditions in the economy or the financial markets and other developments affecting our collaborators, our competitors or us could cause the market price of our common stock to fluctuate substantially. This volatility coupled with market declines in our industry over the past several years have affected the market prices of securities issued by many companies, often for reasons unrelated to their operating performance, and may adversely affect the price of our common stock. In the past, securities class action litigation has often been instituted following periods of volatility in the market price of a company’s securities. A securities class action suit against us could result in potential liabilities, substantial costs and the diversion of management’s attention and resources, regardless of whether we win or lose.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

Table of Contents

ITEM 4. RESERVED

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

Exhibit Number	Description of Exhibit

10.56+	Collaboration and License Agreement dated July 12, 2011 between the Registrant and ASLAN Pharmaceuticals
10.57+	License Agreement dated August 5, 2011 between the Registrant and Genentech, Inc. and F. Hoffmann-LaRoche, Ltd.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	XBRL Instance Document**
101.SCH	XBRL Taxonomy Extension Schema Document**
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document**
101.LAB	XBRL Taxonomy Extension Label Linkbase Document**
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document**
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document**

** Furnished electronically with this report.

+ Confidential treatment of redacted portions is being sought

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boulder, State of Colorado, on this 2nd day of November 2011.

		ARRAY BIOPHARMA INC.


	By:	/s/ Robert E. Conway
		Robert E. Conway
		Chief Executive Officer


	By:	/s/ R. Michael Carruthers
		R. Michael Carruthers
		Chief Financial Officer
		(Principal Financial and
		Accounting Officer)

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

COLLABORATION AND LICENSE AGREEMENT

THIS COLLABORATION AND LICENSE AGREEMENT (the “Agreement”) is made effective as of the 12 day of July, 2011 (“Effective Date”) by and between Array BioPharma Inc., a Delaware corporation (“Array”), and ASLAN Pharmaceuticals, a Singapore corporation (“ASLAN”, as further defined below). Each of Array and ASLAN are sometimes referred to herein as a “Party” or, collectively, as the “Parties”.

RECITALS

A. Array owns certain intellectual property rights and know-how with respect to that certain chemical compound designated as ARRY-543, and believes that ARRY-543 has the potential to become a cancer therapeutic with significant worldwide annual sales.

B. Array desires to collaborate with ASLAN to ensure that the clinical development of ARRY-543 through clinical proof of concept is achieved as promptly as possible, including completion of the Committed Trials (as defined below) and to thereafter find a partner capable of realizing promptly the therapeutic and commercial potential of ARRY-543.

C. ASLAN possesses pharmaceutical development capabilities, and desires to collaborate with Array in the further development of ARRY-543 for the treatment of cancer as set forth in this Agreement and further desires to make the commitment and investment to conduct clinical development of ARRY-543 through clinical proof of concept, including completion of the Committed Trials, and to find a partner capable of realizing promptly the therapeutic and commercial potential of ARRY-543.

Now, therefore, in consideration of the premises and mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

ARTICLE I - DEFINITIONS

The following terms shall have the following meanings as used in this Agreement:

1.1 “ Affiliate ” shall mean any corporation or other entity which is directly or indirectly controlling, controlled by or under common control of a Party hereto for so long as such control exists. For the purposes of this Section 1.1, “control” shall mean the direct or indirect ownership of at least fifty percent (50%) of the outstanding shares or other voting rights of the subject entity having the power to vote on or direct affairs of the entity, or if not meeting the preceding, the maximum voting right that may be held by the particular Party under the laws of the country where such entity exists.

1.2 “ Array Know-How ” shall mean proprietary confidential information which (a) Array discloses to ASLAN under this Agreement or specifically in anticipation of this Agreement and (b) is within the Control of Array. Notwithstanding anything herein to the contrary, Array Know-How excludes published or issued Array Patents.

1.3 “ Array Patents ” shall mean all Patents Controlled by Array.

1.4 “ Array Technology ” shall mean Array Patents and Array Know-How and other Intellectual Property relating thereto, in each case that (i) are Controlled by Array as of the Effective Date and are reasonably necessary for the Parties to conduct their respective activities under the Development Program and to further develop, make, have made, use, import, offer for sale and sell Products in the Field and in the Territory, and/or (ii) are Controlled by Array during the term of this Agreement and claim the composition or method of use of ARRY-543.

1.5 “ ASLAN ” shall mean ASLAN Pharmaceuticals and any of its Affiliates and/or subsidiaries controlled by ASLAN.

1.6 “ ASLAN Know-How ” shall mean proprietary confidential information which (a) ASLAN discloses to Array under this Agreement or specifically in anticipation of this Agreement and (b) is within the Control of ASLAN. Notwithstanding anything herein to the contrary, ASLAN Know-How includes Development Data but excludes published or issued ASLAN Patents.

1.7 “ ASLAN Patents ” shall mean all Patents Controlled by ASLAN.

1.8 “ ASLAN Technology ” shall mean ASLAN Patents and ASLAN Know-How and other Intellectual Property relating thereto, in each case Controlled by ASLAN as of the Effective Date or during the term of this Agreement, that are reasonably necessary for the Parties to conduct their respective activities under the Development Program and to further develop, make, have made, use, import, offer for sale and sell Products in the Field and in the Territory.

1.9 [ * ] shall mean [ * ] , or a [ * ] , in each case that has [ * ] in [ * ] and that (i) [ * ] and/or (ii) if the Parties agree (or the [ * ] determines under Section 7.2.3(b)) that such [ * ] for human pharmaceutical purposes.

1.10 “ Collaboration Patents ” shall have the meaning as set forth in Section 8.2.1.

1.11 “ Collaboration Technology ” shall mean all inventions, information and other Intellectual Property, invented, conceived or created solely or jointly by employees, agents or consultants of ASLAN and/or Array in the course of performing their respective activities after the Effective Date. Collaboration Technology shall include all Array Patents and ASLAN Patents in and to any inventions described in this Section 1.11.

- 2 -

1.12 “ Completion ” shall be deemed to occur, with respect to a particular clinical trial for a Product, upon the earlier of (i) availability of the final clinical study report or (ii) three (3) months after the end of the administration period for the last subject to be treated in such trial and upon collection of data to be obtained from trial subject in connection with such clinical trial in accordance with the applicable trial protocol. Discontinuation of a clinical trial prior to completion of the administration period for at least the number of subjects called for in the applicable study protocol and collection of corresponding data from such subjects does not constitute “Completion” for purposes of this Agreement. For purposes of the foregoing, “administration period” shall mean the period during which doses of the Product are administered to the subject, in accordance with the protocol for such trial.

1.13 “ Committed Trials ” shall mean those clinical trials listed in Exhibit 1.13.

1.14 “ Control, ” “ Controls, ” “ Controlled ” or “ Controlling ” shall mean possession of the ability to grant the licenses or sublicenses as provided herein without violating the terms of any agreement or other arrangements with any Third Party.

1.15 “ Development Data ” shall mean, with respect to a Product, (i) all data from clinical trials of such Product; and (ii) all research data, preclinical data, manufacturing data and other information, in each case that are generated by or under authority of ASLAN with respect to such Product. For such purposes, “Development Data” shall include (1) raw data, study protocols, study results, analytical methodologies, manufacturing processes, materials lists, batch records, vendor information, validation documentation, and the like, (2) regulatory filings, documentation, correspondence and adverse event data, and (3) expert opinions, analyses, reports and the like, relating to the data, including in each case electronic information and databases embodying such data.

1.16 “ Development Plan ” shall mean the workplan with respect to the development of Products in the Development Program, as set forth in Section 3.2.

1.17 “ Development Program ” shall mean activities with respect to the development of Products for applications within the Field by or under authority of ASLAN, comprising preclinical, clinical, contract research (academic or commercial), regulatory, process research and manufacturing development, formulation and all other activities relating to the development of Products for use in the Field, including without limitation the Committed Trials required to be conducted by ASLAN.

1.18 “ Diligent Efforts ” shall mean, with respect to activities of a Party under this Agreement, active, and diligent efforts and resources to develop and license Products, and to obtain the optimum commercial return for such Products throughout the world consistent with the exercise of prudent scientific and business judgment, as are typically applied by such Party (or, if a Party does not engage in that activity for other products or compounds, by biotechnology and/or pharmaceutical companies that are similar in size and financial resources to such Party) in the

- 3 -

conduct of such activities with respect to other pharmaceutical products of comparable commercial potential, taking into account all relevant factors including, as applicable, stage of development, efficacy and safety relative to competitive products in the marketplace, actual or anticipated governmental approved labeling, the nature and extent of market exclusivity (including patent coverage and regulatory exclusivity), cost and likelihood of obtaining marketing approval in major markets, and actual or projected profitability. Each Party shall perform its obligations under this Agreement with respect to development and licensing of Products solely in the best interests of maximizing the success of such Products, and not in the present or future interest of other products of such party or its affiliates other than Products.

1.19 “ Effective Date ” shall mean the date first written above.

1.20 “ EMA ” means the European Medicines Agency or any successor entity thereto.

1.21 “ FDA ” shall mean, with respect to the United States, the U.S. Food and Drug Administration, any successor entity thereto, or any equivalent foreign regulatory authority(ies) in a particular country.

1.22 “Field” shall mean the treatment or prevention of any disease or condition in humans.

1.23 “Intellectual Property” shall mean any Patents, rights to inventions, registered designs, copyright and related rights, database rights, design rights, topography rights, trade marks, service marks, trade names and domain names, trade secrets, confidential information, rights in unpatented know-how, and any other intellectual or industrial property rights of any nature including all applications (or rights to apply) for, and renewals or extensions of such rights and all similar or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world.

1.24 “Joint Development Committee” (or “JDC” ) shall mean the committee established under Section 2.1.

1.25 “ Joint Steering Committee ” (or “ JSC ”) shall mean the committee established under Section 2.2.

1.26 “ Licensed Technology ” shall mean Array Technology, ASLAN Technology and Collaboration Technology.

1.27 “ Licensing Program ” shall mean the activities with respect to the licensing of Products to a Third Party, as set forth in Article VII.

- 4 -

1.28 “ Net Licensing Proceeds ” shall mean the net amount of all consideration actually received in respect of a license under the Licensing Program (or a license granted by ASLAN with respect to [ * ] , in the event that ASLAN obtains and exercises the option therefor as described in Section 7.2.5(a)), i.e. the gross amount payable and the fair market value of any non-cash consideration received, in each case less applicable deductions therefrom, such as withholding taxes or the like (to the extent no tax credit is taken). The party taking the lead in negotiating a license agreement shall have the right to deduct from the Net Licensing Proceeds received from such agreement the reasonable out-of-pocket costs incurred by such lead party in negotiating such license agreement.

1.29 “ Net Sales ” shall mean the gross invoice price charged from time to time by Array or its Affiliates, or by ASLAN or its Affiliates (and, if applicable, licensees or sublicensees of ASLAN described in Section 7.2.5(c)), as the case may be (the applicable Party and its Affiliates referred to herein as the “Selling Party”), for all Products sold the Selling Party, under this Agreement in arm’s length sales to Third Parties less deductions allowed to the Third Party customer by the Selling Party, to the extent actually taken by the Third Party customer, on such sales for:

(a) trade, quantity, and cash discounts;

(b) credits, rebates and chargebacks (including those to managed-care entities and government agencies), and allowances or credits to customers on account of rejection or returns (including, but not limited to, wholesaler and retailer returns) or on account of retroactive price reductions affecting such Product;

(c) freight, postage and duties, and transportation charges specifically relating to Product, including handling and insurance thereto; and

(d) sales (such as VAT or its equivalent) and excise taxes, other consumption taxes, customs duties and compulsory payments to governmental authorities and any other governmental charges imposed upon the sale of such Product to Third Parties.

Sales among the Selling Party and its Affiliates shall be excluded from the computation of Net Sales, and no royalties will be payable on such sales except where such Affiliates are end users; provided, however, that any subsequent resale to Third Parties shall be included within Net Sales. In addition, the Selling Party may exclude from Net Sales a reasonable provision for uncollectible accounts, to the extent such reserve is determined in accordance with U.S. generally accepted accounting standards, consistently applied across all product lines of the particular Party, until such amounts are actually collected. Net Sales shall not include, and no royalty shall be due on, Products used in clinical trials or other research and development activities, or Products given as samples.

1.30 “ Patent ” shall mean (i) issued and unexpired Letters Patent, including any extension, registration, confirmation, reissue, continuation, divisional, continuation-in-part, re-examination or

- 5 -

renewal thereof and (ii) pending applications for Letters Patents; which in each case has not been held, by a court or governmental agency of competent jurisdiction, to be invalid or unenforceable in a decision from which no appeal can be taken.

1.31 “Product” shall mean a pharmaceutical preparation for human use incorporating ARRY-543 as an active ingredient.

1.32 “Territory” shall mean worldwide.

1.33 “Third Party” shall mean any entity other than Array or ASLAN.

1.34 General

Section and Exhibit headings shall not affect the interpretation of this agreement. The Exhibits form part of this agreement and shall have effect as if set out in full in the body of this agreement. Any reference to this agreement includes the Exhibits. Unless the context otherwise requires, words in the singular include the plural and in the plural include the singular. Unless the context otherwise requires, a reference to one gender shall include a reference to the other genders. Writing or written includes faxes but not e-mail. Any words following the terms ‘including’, ‘include’, ‘in particular’ or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms. A ‘person’ includes a natural person, corporate or unincorporated body (whether or not having separate legal personality).

ARTICLE II - GOVERNANCE

2.1 Joint Development Committee . ASLAN and Array shall establish a joint development committee (“ Joint Development Committee ” or “ JDC ”) to execute the Development Plan during the Development Program. From time to time, the JDC may establish subcommittees or project teams to oversee particular projects or activities, and such subcommittees or project teams will be constituted as the JDC agrees ( e.g. , for oversight of certain day-to-day matters).

2.1.1 Membership . The JDC shall be comprised primarily of members from ASLAN, provided that the JDC will at all times include at least two (2) representatives from each of ASLAN and Array, selected by such party. It is anticipated that membership of the JDC will change over the course of the Development Program as needed to ensure sufficient expertise for execution of the then-current Development Plan. The Chief Medical Officer of ASLAN shall serve as chairman of the JDC.

2.1.2 JDC Meetings . During the Development Program, the JDC will meet regularly (at least quarterly) according to a mutually agreed schedule, alternating between locations convenient to one Party and then convenient to the other, or by teleconference; the JDC may also meet on an ad hoc basis, as necessary. At its meetings, the JDC will (i) review the Development

- 6 -

Program objectives, (ii) monitor the progress of the Development Program toward those objectives, (iii) make decisions and any material changes to the execution of the Development Plan, (iv) make decisions about any other matters relating to the operation and execution of this Agreement as the members of the JDC may agree, and (v) undertake and/or approve such other matters as are specifically provided for the JDC under this Agreement, in each case subject to the limitations set forth in Section 2.1.4 below. The JDC shall prepare written minutes of each JDC meeting and a written record of all JDC decisions, whether made at a JDC meeting or otherwise and promptly circulate a copy to JDC and JSC members. Each party shall bear its own personnel, travel and lodging expenses relating to JDC meetings.

2.1.3 Decisions . Decisions of the JDC shall be made by unanimous vote, with each Party having one vote. In the event that the votes required to approve a decision cannot be reached, then the issue will be referred to the JSC for resolution.

2.1.4 Limitations on the JDC . The JDC shall have no authority to do any of the following: (i) alter or amend this Agreement, (ii) delay the scheduled date of completion of the overall Development Program or otherwise extend the then-current term of the Agreement; (iii) decrease the scope of the Development Plan to less than the Committed Trials; (iv) create additional obligations or liabilities on Array’s behalf under the Licensing Program beyond the scope provided under this Agreement; (v) require Array to be responsible for tasks or activities of a materially different nature or scope than agreed by Array in the initial Development Plan (or amended Development Plan agreed to by Array); or (vi) cause Array to breach any obligation Array has under an agreement with any third party, provided that in such circumstance Array shall provide as early notification of the issue to ASLAN as possible, together with reasonable information about the relevant obligations of Array under the agreement and why Array considers that the course of action proposed, will cause it to be in breach of such obligation.

2.2 Joint Steering Committee . The Parties shall establish an overall committee (“ Joint Steering Committee ,” or “ JSC ”) to oversee the Development Program, to oversee the Licensing Program and to resolve issues arising under this Agreement. The JDC shall report to the JSC.

2.2.1 Membership . The JSC shall be comprised of an equal number of representatives from each of ASLAN and Array, selected by such party. The exact number of such representatives shall be two (2) for each of ASLAN and Array, or such other number as the parties may agree, with the members selected from senior management of each Party. Array and ASLAN may replace its respective JSC representatives at any time, with prior written notice to the other party. The Chief Medical Officer of ASLAN shall serve as chairman of the JSC.

2.2.2 JSC Meetings . During the term of the Agreement, the JSC shall meet no fewer than two (2) times each calendar year, or as otherwise agreed by the parties, alternating between locations convenient to one Party and then convenient to the other, or by teleconference. At its meetings, the JSC will (i) review and approve the Development Plans (and any and all material

- 7 -

modifications thereof, especially changes to the Development Plan timeline or the scope of ASLAN’s required expenditures thereunder), pursuant to Section 3.2 of this Agreement; (ii) review and, if agreed, approve the material terms of any proposed license under the Licensing Program; (iii) discuss and seek to resolve any issues which have arisen in the JDC and have not been resolved; (iv) discuss and seek to resolve any other issues arising under this Agreement; and (v) undertake and/or approve such other matters as are specifically provided for the JSC under this Agreement; provided, however, that the JSC shall not have the authority to alter or amend this Agreement. The JSC shall prepare written minutes of each JSC meeting and a written record of all JSC decisions, whether made at a JSC meeting or otherwise, and promptly circulate a copy to all JSC members. Each party shall bear its own personnel, travel and lodging expenses relating to JSC meetings.

2.2.3 Decisions . Decisions of the JSC shall be made by unanimous vote, with each Party having one vote. Parties shall make decisions in good faith and not unreasonably withhold or delay decisions. If the JSC cannot reach agreement on an issue, then such issue will be referred to the Chief Executive Officers (“ CEOs ”) of Array and ASLAN for attempted resolution in good faith, face-to-face negotiations at a mutually agreed site. If the CEOs cannot resolve such issue within 30 business days, ASLAN will have the right to cast the deciding vote ; provided, however, that ASLAN will not have the right, without agreement of Array, to: (i) delay the scheduled date of completion of the overall Development Program or otherwise extend the then-current term of the Agreement; (ii) decrease the scope of the Development Plan to less than the Committed Trials; (iii) create additional obligations or liabilities on Array’s behalf under the Licensing Program beyond the scope provided under this Agreement; (iv) require Array to be responsible for tasks or activities of a materially different nature or scope than agreed by Array in the initial Development Plan (or amended Development Plan agreed to by Array); or (v) cause Array to breach any obligation Array has under an agreement with any third party, provided that in such circumstance Array shall provide as early notification of the issue to ASLAN as possible, together with reasonable information about the relevant obligations of Array under the agreement and why Array considers that the course of action proposed, will cause it to be in breach of such obligation. Array and ASLAN shall cause each of their representatives on the JSC and their respective CEOs to vote, including any deciding vote cast by ASLAN, and shall otherwise perform their respective activities under this Agreement, in accordance with the Parties’ respective obligations to use Diligent Efforts to maintain the best interests of the collaboration contemplated herein, including the timely development of Products, and not in the present or future interest of either Party outside the collaboration. Where this Agreement calls for specified officers of Array and ASLAN to meet and resolve a particular issue, each Party shall make its respective officer reasonably available for an in-person meeting on at least three particular dates and times within the thirty (30) days after the request.

ARTICLE III - PRODUCT DEVELOPMENT

3.1 Development Program . ASLAN, at its own expense, shall use Diligent Efforts to conduct the Development Program through to clinical proof of concept, including Completion of all

- 8 -

Committed Trials. All Development Program activities will be conducted pursuant to the applicable Development Plan, in accordance with good clinical practices and designed to a standard acceptable by the FDA and/or the EMA.

3.1.1 ASLAN Responsibilities . ASLAN shall be responsible for resourcing, supplying and funding the development activities under the Development Plan. Except as provided in Section 3.2, and subject to any other applicable provisions of this Agreement, ASLAN shall make all decisions relating to the day-to-day development activities within the Development Program, provided such decisions are consistent with the then-current approved Development Plan and any decisions and instructions of the JDC or JSC.

3.2 Development Plan .

3.2.1 General . All activities conducted by or under authority of ASLAN in connection with the development of Products shall be conducted only in accordance with a detailed written development plan approved by the JDC, including timelines contained therein (each such plan referred to as a “ Development Plan ”). At least one time in each calendar year, ASLAN shall prepare and present to the JSC a reasonably detailed, written update to the Development Plan pursuant to which the Development Program will be performed. The initial Development Plan is attached hereto as Exhibit 3.2.

3.2.2 The Development Plan will include a reasonably detailed plan for the applicable year and a general overview of activities required to reach clinical proof of concept, and shall establish a development timeline including projected time durations for the particular stages of the Development Program. The Development Plan will contain go/no-go criteria for continuing the development of Products from one clinical trial to the next. Each Development Plan shall be comprehensive and shall fully describe at least (i) the proposed activities related to ongoing preclinical studies, clinical studies and regulatory plans, and (ii) clinical goals and objectives as well as criteria for successful Completion of the Committed Trials and other development activities. In any event, each Party agrees to keep the other Party fully informed as to the development activities (if any) to be conducted by such Party under the mutually agreed Development Plan. In addition, ASLAN shall provide Array with such information as Array may reasonably request from time to time regarding status of development of Products hereunder. It is understood that such information will include, without limitation, copies of all correspondence with regulatory authorities with respect to each Product. ASLAN shall promptly notify the JSC in writing upon Completion of each of the Committed Trials.

3.2.3 Periodic Review . The JDC shall review the Development Plan on an ongoing basis and shall adjust and make appropriate changes to the Development Program, including the development timeline, based on the results and progress to date. Any and all material changes to

- 9 -

the Development Plan that cannot be agreed to by unanimous vote of the JDC shall require the approval of the JSC.

3.3 Regulatory Matters .

3.3.1 Regulatory Filings . ASLAN shall be responsible, directly or through third parties, for the preparation, filing and maintenance of all regulatory documents with respect to development of Products under the Development Program, which shall be filed in the name of ASLAN or its designee. All clinical trial protocols and regulatory submissions under the Development Plan shall be subject to review and approval by the JDC prior to the initiation of such trials and prior to filing such protocols and submissions with any health regulatory agencies.

3.4 Inventory Transfer; Manufacturing .

3.4.1 Existing Stock . In order to help facilitate ASLAN’s initial efforts in the Development Program, Array agrees to transfer to ASLAN a mutually agreed amount of ARRY-543 from Array’s existing stock, in bulk API or bulk tablet form, solely for use in conducting activities under the Development Plan, in the time frames reasonably requested by ASLAN in writing (which shall be within a reasonable time after the Effective Date and, in no event, later than one (1) year). Within thirty (30) days of receipt, ASLAN shall reimburse Array [ * ] of Array’s [ * ] such existing stock. For purposes of this Agreement, “Array’s [ * ] shall specifically include, without limitation, [ * ] , of material to ASLAN. Array shall deliver API to ASLAN, or to a destination designated by ASLAN in writing (FCA (Free Carrier), airport of departure, Incoterms 2000) by transporting the API to the air carrier at the airport of departure specified by ASLAN in writing. The Parties shall confer prior to any such delivery of the API regarding the container and shipping details and other related data and information. On request of either Party, the Parties will negotiate and enter into a separate supply agreement, which separate supply agreement (i) shall reflect and be consistent with the foregoing terms of this Section 3.4.1, (ii) will contain a representation from Array that to Array’s knowledge the ARRY-543 supplied thereunder was manufactured in accordance with Array’s specifications for ARRY-543 at the time, together with a disclaimer that (except for the foregoing representation) all ARRY-543 is provided to ASLAN “AS IS,” with no other representation or warranty, express or implied, and (iii) will contain only such other terms and conditions as are mutually acceptable to both Parties. Array shall have no obligation to supply to ASLAN any amounts of ARRY-543 as to which Array does not believe it can make the representation described in clause (ii) in the preceding sentence.

3.4.2 Future API . ASLAN may if it chooses, contract with Array to perform additional Chemistry and Manufacturing Controls (CMC) activities and ARRY-543 manufacturing necessary to complete the Development Program. The terms and conditions for such CMC and manufacturing activities shall be set forth in a separate agreement to be negotiated in good faith by the Parties. The price to be paid for supply of ARRY-543 shall be [ * ] of Array’s [ * ] any such

- 10 -

ARRY-543. For the avoidance of doubt, ASLAN shall be free to use a Third Party supplier instead if it wishes.

3.5 Development Data .

(a) Ownership . Development Data generated by ASLAN in the course of the Development Program shall be owned by ASLAN.

(b) Without limiting the foregoing, ASLAN will provide periodic reports regarding progress under the Development Plan and, promptly upon Completion of each of the Committed Trials and of such other trials as the parties agree in the Development Plan are required for proof of concept (or, if earlier, upon discontinuation of any such Committed Trials or other clinical trials), make available to Array all clinical data and all final study reports resulting from the activities conducted through proof of concept pursuant to the Development Plan.

3.6 Records; Reports . ASLAN shall maintain records of the Development Program (or cause such records to be maintained) in sufficient detail and in good scientific manner as will properly reflect all work done and results achieved in the performance of the Development Program. Array shall have full access to all records, materials and Development Data generated by or on behalf of ASLAN pursuant to the Development Program with respect to each Product and, promptly upon request by Array, ASLAN shall provide copies of such Development Data to Array, in English where available.

ARTICLE IV - EXCLUSIVITY

4.1 Exclusivity of Efforts . During the term of this Agreement, ASLAN shall not conduct, participate in, or fund, directly or indirectly, either alone or with a third party, research or development with respect to, or to commercialize a product comprising, any compound or product that targets either EGFR or ErbB-2 for potential use in the Field, other than activities conducted pursuant to and in accordance with the Agreement.

4.2 Other Product; Right of First Negotiation .

4.2.1 During the term of the agreement, at least ninety (90) days prior to Array entering into [ * ] to grant to a Third Party the right to develop and/or commercialize that certain [ * ] , Array agrees to notify ASLAN in writing, together with a summary description of the [ * ] (including a general statement of its then-current stage of development) and the scope of rights or field to be proposed, if any, that [ * ] (“Initial Notice”). Within thirty (30) days following receipt of such Initial Notice, ASLAN shall notify Array of its decision whether or not it desires to discuss terms and conditions under which Array will grant such rights to ASLAN. As soon as practicable following such notice the Parties shall enter into exclusive good faith negotiations to finalize the terms and conditions of such grant of rights. If (i) ASLAN notifies Array that it does not desire to

- 11 -

discuss such terms and conditions, or (ii) the parties have not agreed upon such terms and conditions pursuant to which such rights and license will be granted to ASLAN within ninety (90) days after the date Array provided the Initial Notice to ASLAN (the “Negotiation Period”), then Array shall be free to grant to any third party the right to develop and/or commercialize [ * ] , without further obligation to ASLAN, and on any terms that Array deems appropriate. It is understood that, because Array will be providing the Initial Notice to ASLAN prior to [ * ] with a third party, Array may not be able to define the entire or exact scope of the product, field or rights to be granted, and accordingly, so long as the Initial Notice describes a product, field or rights that overlap with the product, field or rights discussed with, or granted to, a third party, Array shall be deemed to have satisfied its obligations; also, it is understood that Array need only provide one such Initial Notice hereunder before engaging in such material and substantial negotiations with the first third party, and that Array is not obligated to provide any further notice if Array subsequently engages in discussion with more than one third party with respect to the subject matter described in the Initial Notice. Such right is personal to ASLAN and will terminate upon the acquisition or merger of ASLAN.

4.2.2 No Implied Obligations . The only obligations of Array and ASLAN under Section 4.2.1 above are as expressly stated therein, and there are no further implied obligations relating to the matters contemplated therein, other than as are non-excludable by law. Without limiting the foregoing, it is further understood and agreed that [ * ] may or may not be advanced to any particular degree or at all at the time of the Initial Notice under Section 4.2.1, and that [ * ] may be conducted after the date of such Initial Notice; accordingly, so long as Array includes within the Initial Notice a good faith summary of [ * ] as it then exists, or a summary of the field in which the rights would be granted, the requirements of Section 4.2.1 above shall be deemed satisfied with respect to any and all activities after the date of the Initial Notice. Without limiting the foregoing, it is further acknowledged and agreed (i) that: this Section 4.2 shall not be deemed to apply to a transaction by which a Third Party acquires all or substantially all of the business assets of Array; and (ii) if Array enters into a transaction with a Third Party in accordance with this Section 4.2 that includes [ * ] (each such [ * ] being referred to as a “ [ * ] ”), then the grant of rights by Array upon a Third Party’s exercise of such Contingent Right shall not be subject to this Section 4.2 so long as the grant of such [ * ] was made in a transaction entered into with the Third Party in compliance with Section 4.2.1; and (iii) Array is not obligated under this Section 4.2 to provide ASLAN any particular information other that as expressly stated in Section 4.2.1, and that Array may require a separate confidentiality agreement as a condition to any disclosure of information in connection with Section 4.2.

4.2.3 Disputes . If ASLAN disputes Array’s right to proceed to enter into any transaction with a Third Party with respect to [ * ] , ASLAN shall submit such dispute for determination by a neutral expert (“Expert”) within ten (10) days from the end of the Negotiation Period, and such issue shall be finally resolved by the Expert pursuant to this Section 4.2.3 (“Expert Determination”). ASLAN shall provide Array a notice of such Expert Determination together with a written report setting forth the specific basis for the dispute and the specific actions ASLAN

- 12 -

believes Array must take to resolve the dispute (“Dispute Resolution Notice”). If a Dispute Resolution Notice is not received within the ten (10) day period then ASLAN shall have no further right to dispute Array’s right to grant any Third Party rights contemplated by this Section 4.2. In the event of such Expert Determination, the Expert shall be an independent expert in the biotechnology industry with relevant experience, mutually acceptable to the Parties. If the Parties are unable to agree on an Expert, the Expert shall be an independent expert as described in the preceding sentence, selected by the chief executive of the UK Bio-Industry Association (“BIA”). Any such Expert Determination shall be held in London, UK, and shall be conducted in English. Each Party shall prepare a written report setting forth its position with respect to whether Array has the right to proceed to enter into any transaction with a Third Party, and supporting documents or affidavits as such Party deems appropriate. The Expert shall not order or require discovery against either party. The Expert shall select one of the Party’s positions as his decision, and shall not have authority to render any substantive decision other than to so select the position of either ASLAN or Array. The costs of such Expert Determination shall be shared equally by the Parties, and each Party shall bear its own expenses in connection with such Expert Determination. It is the desire and objective of the Parties that the dispute is settled by Expert Determination within 30 days of Dispute Resolution Notice, or in any event as soon thereafter as is practicable.

ARTICLE V - LICENSE GRANTS

5.1 Development License to ASLAN . Subject to the terms and conditions of this Agreement, Array hereby grants ASLAN an exclusive, non-sublicensable (except pursuant to the Licensing Program), license under applicable Array Technology to develop Products in the Field in the Territory pursuant to the Development Plan.

5.2 No Commercialization by ASLAN . Except to the extent otherwise expressly provided in Section 7.2, ASLAN agrees that it and its Affiliates shall not sell or otherwise commercialize (other than authorizing commercialization by a Third Party under a license granted pursuant to the Licensing Program) ARRY-543 or any Product , unless and until ASLAN and Array agree upon applicable payments to Array and other financial terms for such sales or commercialization and enter into a mutually agreed definitive written agreement granting such rights to ASLAN or its Affiliate and containing agreed financial terms and other terms and conditions approved by the senior management of both Parties. The Parties acknowledge that commercial rights with respect to Products may be granted by ASLAN to a Third Party pursuant to the Licensing Program on the terms and conditions set forth in Article VII, below.

5.3 No Implied Licenses . Each Party acknowledges that the licenses granted under this Article V are limited to the scope expressly granted, and all other rights to Licensed Technology are expressly reserved to the Party owning such Licensed Technology. Without limiting the foregoing, it is understood that where an exclusive license under Licensed Technology is granted to a Party under this Article V for a particular purpose, the Party granting such license retains all of its rights to such Licensed Technology for all purposes not expressly licensed.

- 13 -

ARTICLE VI - DILIGENCE

It is important to Array and ASLAN that Product development and licensing proceed expeditiously. Accordingly, ASLAN shall use Diligent Efforts to conduct the Development Program and the Licensing Program under Sections 3.1 and 7.1 of this Agreement, and to obtain the optimum commercial return for Products in all markets throughout the world. ASLAN shall develop and license all Products in the best interests of maximizing the success of such Products, and not in the present or future interest of other products of ASLAN (other than Products).

ARTICLE VII - LICENSING PROGRAM; BUY-OUT

7.1 Licensing Program . Subject to the terms and conditions of this Agreement, Array hereby grants ASLAN an exclusive license under applicable Array Technology to pursue the Licensing Program and to sub-license or license (as applicable) to Third Parties the further development and commercialization of the Licensed Technology and/or the Products in the Territory in accordance with the provisions of this Article VII and under license terms and conditions mutually acceptable to the Parties and/or following the procedures under Section 2.2.3.

7.1.1 ASLAN will use Diligent Efforts to negotiate term sheets and execute agreements with potential licensees, keeping Array informed as to material terms of such negotiations. For each potential licensee of the Licensed Technology, the parties via the JSC shall seek to agree on an appropriate field. Array will reasonably cooperate to assist ASLAN in its efforts to pursue the Licensing Program by making available, at no extra charge to ASLAN, such additional or complementary data or information related to Products that is Controlled by Array as may be appropriate and reasonably required to progress licensing discussions with Third Parties in connection with the Licensing Program.Unless approved by both Parties, neither Party shall, during the term of this Agreement, have the right to separately grant a license with respect to Products to any Third Party under its Licensed Technology.

7.1.2 Approximately 6 months prior to the anticipated Completion of the Development Program or earlier if available data permits, ASLAN will begin business development activities in connection with the Licensing Program. ASLAN agrees not to enter into any license agreement pursuant to the Licensing Program until such time as ASLAN has provided a complete copy of the final license draft to Array, and either: (i) each of the Parties have approved the license agreement, if such license is entered into prior to Completion of the Development Program, or (ii) each of the Parties have approved the license agreement, or the procedures under Section 2.2.3 have been exhausted, if such license is entered into after Completion of the Development Program. In exercising any right to give or withhold approval in relation to the terms of a proposed license of the Licensed Technology or any other part of this Agreement, Array shall act in a timely and reasonable manner and use Diligent Efforts. For purposes of clarity: (x) prior to Completion of the Development Program ASLAN may not enter into any license under the Licensing Program without Array’s prior written consent; (y) after Completion of the Development Program, ASLAN, subject to

- 14 -

Section 2.2.3 and all dispute resolution provisions in this Agreement, may conclude a license under the Licensing Program without Array’s written consent.

7.1.3 Proceeds . ASLAN and Array will share the Net Licensing Proceeds received by either ASLAN or Array from licenses and sublicenses granted under the Licensing Program as follows: ASLAN will receive [ * ] of such Net Licensing Proceeds and Array will receive [ * ] of such Net Licensing Proceeds.

7.2 Certain Terms Related to [ * ] .

7.2.1 Information Regarding [ * ] . Array shall keep ASLAN reasonably informed as to material developments with respect to the [ * ] , including without limitation, by providing upon request copies of any substantive documents that it receives from [ * ] (“ [ * ] ”) with respect to [ * ] .

7.2.2 Discussion Following Completion of All Committed Trials . Promptly following Completion of the Development Program (and in any event within thirty (30) days following such Completion), the Parties shall discuss whether a [ * ] has [ * ] and, if no [ * ] has [ * ], whether a [ * ] is [ * ] . If at that time a [ * ] has [ * ] , then the terms of Section 7.2.4 shall apply. If no [ * ] has [ * ] , but the Parties agree at that time that a [ * ] is [ * ] , then the terms of Section 7.2.4 shall likewise apply. If no [ * ] has [ * ] and the Parties agree at that time that no [ * ] is [ * ] , then the terms of Section 7.2.5 shall apply. If at that time no [ * ] has [ * ] and the Parties fail to agree whether a [ * ] is [ * ] (or if the Parties fail to agree whether [ * ] qualifies as a [ * ] , then upon request of either Party such matter shall be referred to a [ * ] for resolution pursuant to Section 7.2.3(b) below.

7.2.3 Failure to Agree .

(a) ASLAN Election to Proceed at Risk . If no [ * ] has [ * ] and the Parties fail, following the discussion described in Section 7.2.2, to agree whether a [ * ] is [ * ] , then ASLAN may in its discretion elect, upon prior written notice to Array, to proceed, entirely at ASLAN’s risk, to practice the rights set forth in Section 7.2.5, below in anticipation that ASLAN will obtain such rights; provided, however, if ASLAN so proceeds and a [ * ] subsequently [ * ] or the [ * ] as described in Section 7.2.3(b), below, subsequently determines that a [ * ] has [ * ] or is [ * ] , then: (i) ASLAN shall (and cause its Affiliates and ASLAN’s and its Affiliates’ employees, contractors, licensees, distributors and any other party acting under authority of ASLAN or its Affiliate to immediately) immediately cease [ * ] , and promptly withdraw (or transfer to Array, if Array is willing to accept such transfer) [ * ] ; (ii) all licenses granted by ASLAN or its Affiliates under authority of Section 7.2.5 shall be void ab initio; (iii) ASLAN shall be liable to Array for any and all harm or loss to Array (including any damage to Array’s interest in the Licensing Program) arising from activities undertaken by or under authority of ASLAN in connection with ASLAN’s decision to proceed at risk to exercise the rights described in Section 7.2.5; and (iv) ASLAN shall

- 15 -

remain fully responsible for (and indemnify Array with respect to) any and all liability arising from contracts entered into by or under authority of ASLAN with respect to such activities.

(b) [ * ] Determination . If the Parties do not agree, within sixty (60) days after Completion of all of the Committed Trials, upon whether a [ * ] has [ * ] or is [ * ] (including without limitation any disagreement between the Parties over whether [ * ] within a [ * ] , then either Party may submit such matter for determination by a [ * ] upon written notice to the other Party no later than ninety (90) days following the Completion of all of the Committed Trials (a “ [ * ] ”), in which case such matter shall be finally resolved by the [ * ] pursuant to this Section 7.2.3(b) (“ [ * ] ”). If a [ * ] is not received by Array within ninety (90) days following the Completion of all of the Committed Trials, then ASLAN shall be deemed to have agreed that a [ * ] has [ * ] or [ * ] , and the terms of Section 7.2.4 below shall apply. In the event of such [ * ] , the [ * ] shall be [ * ] , mutually acceptable to the Parties, who has [ * ] . If the Parties are unable to agree on a [ * ] , the [ * ] shall be an [ * ] as described in the preceding sentence, selected by the chief executive of the UK Bio-Industry Association (“BIA”). Any such [ * ] shall be held in London, UK, and shall be conducted in English. Each Party shall prepare a written report setting forth its position with respect to whether [ * ] that are [ * ] (as defined herein) are [ * ] , and supporting documents or affidavits as such Party deems appropriate. The [ * ] shall not order or require discovery against either party. The [ * ] shall issue his decision solely on the matter as to whether [ * ] that are [ * ] (as defined herein) are [ * ] , and shall not have authority to render any other substantive decision. The costs of such [ * ] shall be shared equally by the Parties, and each Party shall bear its own expenses in connection with such [ * ] . It is the desire and objective of the Parties that the dispute is settled by [ * ] within 30 days of the [ * ] , or in any event as soon thereafter as is practicable.

7.2.4 [ * ] has [ * ] or is [ * ] . If the Parties agree or are deemed to agree (or the [ * ] determines as described in Section 7.2.(3)(b) above) that a [ * ] has [ * ] or is [ * ] , or if the Parties have not agreed that a [ * ] has [ * ] and is [ * ] and ASLAN does not provide a [ * ] within the ninety (90) days following the Completion of all of the Committed Trials, then the terms set forth in Section 7.2.5 below shall be of no force and effect.

7.2.5 [ * ] . The rights of ASLAN described in this Section 7.2.5 are contingent upon Completion of all of the Committed Trials, and ASLAN will not have any rights to commercialize or exploit ARRY-543 or Products under the terms of this Section 7.2.5 unless and until Completion of all of the Committed Trials has occurred. Following Completion of all of the Committed Trials, if the Parties agree (or the [ * ] determines as described in Section 7.2.3(b) above) that no [ * ] has [ * ] and no [ * ] is [ * ] , then the terms set forth below in this Section 7.2.5 shall apply:

(a) Without prejudice to the Parties’ respective obligations in relation to the Licensing Program as set forth in Section 7.1, above, if a Third Party has obtained a license under the Licensing Program to further develop and commercialize Products in a territory that includes at least (i) the United States and (ii) either Europe (including at least Germany, France,

- 16 -

Italy, Spain and the United Kingdom) or Japan (“Major License”), and no Third Party has been granted [ * ] , then ASLAN shall have an option (i) to [ * ] in any territories not already licensed to Third Parties under the Licensing Program, subject to the written approval of the licensee under the Major License, and (ii) to [ * ] (the “ [ * ] ”), subject to the payments described in Section 7.2.5(c) below, which [ * ] may only be exercised upon written notice given within thirty (30) days following conclusion of the Major License referred to above;

(b) ASLAN agrees that it and its Affiliates shall not conduct [ * ] , pending exercise by ASLAN of its rights under this Agreement in relation to the [ * ] ;

(i) for all Products marketed to end-users by ASLAN and/or any of its Affiliates, royalties of [ * ] of the Net Sales of such Products; and

(ii) for all other Products, either (A) royalties of [ * ] of Net Sales of such Products to end-users or (B) [ * ] of all Net Licensing Proceeds received by ASLAN and its Affiliates in connection with the license or other agreement pursuant to which any Third Party obtains a [ * ] (such [ * ] referred to herein as a “ [ * ] ”). ASLAN shall elect in writing, at the time the first [ * ] is provided to Array pursuant to Section 7.2.5(d), below, whether it will pay the royalty described in clause (A) of the preceding sentence or pay the percentage of Net Licensing Proceeds described in clause (B), and in the event that ASLAN does not make the election between the payments described in (A) and (B) above at the time the first [ * ] is provided to Array, Array shall have the right to elect which payment shall apply under this Section 7.2.5(c)(ii).

(d) ASLAN shall provide a complete copy of each [ * ] (together with a description of any and all Net Licensing Proceeds associated with such [ * ] that are not reflected on the face of such license) within ten (10) days after its execution.

(e) Payments due under Section 7.2.5(c) (royalties and/or percentage of Net Licensing Proceeds, as applicable) shall continue until [ * ] , but only to the extent Net Sales of Products occur during such period (with respect to royalties on Net Sales) and/or ASLAN receives Net Licensing Proceeds (with respect to sharing of Net Licensing Proceeds).

(f) In the event that one or more Third Parties is selling a generic version of a Product [ * ] (i.e., a pharmaceutical product containing the same compound as ARRY-543 which has obtained marketing approval [ * ] through an abbreviated regulatory pathway for generic products and that is not sold under authority of a license from ASLAN or Array), and the units of such generic versions of the Product represent at least [ * ] of the total units of the Product and related generic versions of the Product, combined, that were sold [ * ] in the preceding calendar year,

- 17 -

then royalties on Net Sales under Section 7.2.5(c)(i) (and, if applicable, under Section 7.2.5(c)(ii)) shall be reduced to [ * ] of such Net Sales.

7.3 Buy-Out Process . Either Party shall have the right to trigger a buy-out of the right to develop and commercialize Products at any time during the period that begins upon the conclusion of the Development Plan and ends on the earlier of (i) the date on which the first license to develop or commercialize any Product is granted to any Third Party under the Licensing Program or (ii) expiration or termination of this Agreement (the “Buy-Out Right Period”), as follows:

(a) A Party (the “Offeror”) may trigger a buy-out by providing to the other Party (the “Offeree”), during the Buy-Out Right Period, written notice specifically referencing this Section 7.3, in which the Offeror offers to buy out the right to grant licenses to Third Parties to develop and commercialize Products, and such notice shall set forth a lump sum payment amount (the “Buy-Out Price”) offered by the Offeror as payment for buying out such rights (such a notice referred to as the “the Offeror’s Buy-Out Notice”);

(b) Within forty-five (45) days after receiving the Buy-Out Notice, the Offeree may elect, in its sole discretion and upon written notice to the Offeror (the “the Offeree’s Buy-Out Notice”), to buy out the Offeror’s rights with respect to licensing Third Parties to develop and commercialize Products for the same lump sum Buy-Out Price that was offered by the Offeror in the Offering Party’s Buy-Out Notice;

(c) If the Offeree does not provide an Offeree’s Buy-Out Notice within forty-five (45) days after receiving the Offeror’s Buy-Out Notice, the Offeree shall be deemed to have accepted the Offeror’s buy-out offer in the Offeror’s Buy-Out Notice. The Offeree may, in its discretion, also accept the Offeror’s buy-out offer by written notice to the Offeror before expiration of such forty-five (45) day period;

(d) If the Offeree accepts, or is deemed to have accepted, the Offeror’s buy-out offer in the Offeror’s Buy-Out Notice, then (i) the Offeror shall pay the Offeree the Buy-Out Price within twenty (20) days and shall thereafter have the exclusive right to grant licenses to Third Parties under the Licensed Technology to develop and/or commercialize Products for pharmaceutical uses (and, for the avoidance of doubt, shall not be obligated to share Net Licensing Revenues from such licenses with the Offeree), and (ii) ASLAN and Array shall promptly prepare and enter into a definitive written agreement memorializing appropriate exclusive licenses to the Offeror under the Offeree’s interest in the Licensed Technology; and

(e) If the Offeree provides an Offeree’s Buy-Out Notice within the forty-five (45) day period described in Section 7.3(b), then (i) the Offeree shall pay to the Offeror the Buy-Out Price within twenty (20) days and shall thereafter have the exclusive right to grant licenses to Third Parties under the Licensed Technology to develop and/or commercialize Products for pharmaceutical uses (and, for the avoidance of doubt, shall not be obligated to share Net Licensing

- 18 -

Revenues from such licenses with the Offeror), and (ii) ASLAN and Array shall promptly prepare and enter into a definitive written agreement memorializing appropriate exclusive licenses to Array under the Offeror’s interest in the Licensed Technology (including without limitation rights to all data from the Committed Trials and other trials conducted in the Development Program) to facilitate such licensing.

In the event that a Party does not provide a Buy-Out Notice as set forth in Section 7.3(a) above prior to expiration of the Buy-Out Right Period, such Party’s right to trigger a buy-out of the right to grant licenses to Third Parties to develop and commercialize Products as described in this Section 7.3 shall expire. For the avoidance of doubt, neither Party shall have the right to trigger such a buy-out unless and until such time as the Development Program has been concluded (prior to expiration or termination of this Agreement).

ARTICLE VIII - OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS

8.1 Ownership of Inventions; Disclosure . Each Party shall retain all of its rights, title and interest in and to any Intellectual Property it owns as of the Effective Date, including the right to transfer or license such Intellectual Property to others for any purpose, subject only to its obligations under this Agreement. All right, title and interest in and to all Intellectual Property made solely by personnel of a Party after the Effective Date shall be owned by such Party. All right, title and interest in and to all Intellectual Property made jointly by personnel of ASLAN and Array after the Effective Date shall be jointly owned by ASLAN and Array, subject to any applicable licenses and payment and other terms or obligations set forth in this Agreement. Inventorship shall be determined in accordance with the patent laws of the United States. Except as expressly provided in this Agreement, neither Party shall have any obligation to obtain any consent of the other Party to license or exploit patented jointly-owned subject matter, by reason of joint ownership thereof, and each Party hereby waives any right it may have under the laws of any jurisdiction to require any such consent; except as otherwise provided in this Agreement, any profits resulting from such licensure or exploitation shall be split equally by the Parties.

8.2 Patent Filings . The Party responsible for Prosecution and Maintenance (as defined below) of patents covering inventions within the Collaboration Technology shall use Diligent Efforts to obtain a reasonable scope of protection for such inventions, and will consider in good faith reasonable comments provided by the other Party.

8.2.1 Joint Patents . The Prosecution and Maintenance of jointly owned Patents shall be only as mutually agreed by ASLAN and Array, and the costs associated with the Prosecution and Maintenance of such Patents shall be shared equally between the Parties. In such connection, the Parties agree to cooperate and to prepare and prosecute jointly-owned patent applications for Patents within the Collaboration Technology (“Collaboration Patents”) directed to such claims in a manner that ensures reasonable scope of protection for such subject matter.

- 19 -

8.2.2 Solely Owned Patents . ASLAN or Array, as the case may be, shall control the Prosecution and Maintenance of Patents within the Collaboration Technology that are owned by such Party, in each case at its own cost and using counsel of its choice and in such countries as such Party determines is appropriate.

8.2.3 Other Matters Pertaining to Prosecution of Patents.

(a) Each Party shall promptly disclose to the other any inventions made in connection with this Agreement. Each Party shall keep the other informed as to material developments with respect to the Prosecution and Maintenance of Collaboration Patents Technology, including without limitation, by providing upon request copies of any substantive documents that such Party receives from any patent office, including notice of all interferences, reissues, re-examinations, oppositions or requests for patent term extensions, and by providing the other Party the opportunity to have reasonable input into the strategic aspects of such Prosecution and Maintenance.

(b) The other Party shall reasonably cooperate with and assist the Prosecuting Party, at the Prosecuting Party’s request and expense, in connection with the Prosecution and Maintenance of such Collaboration Patents that are jointly owned, including without limitation by making scientists and scientific records reasonably available to the Prosecuting Party.

(c) “ Prosecution and Maintenance ” or “ Prosecute and Maintain ” with regard to a Patent shall mean the preparing, filing, prosecuting and maintenance of such Patent, as well as re-examinations, reissues, requests for patent term extensions and the like with respect to such Patent, together with the conduct of interferences, the defense of oppositions and other similar proceedings with respect to the particular Patent.

8.3 Defense and Settlement of Third Party Claims . If a Third Party asserts that a Patent or other right owned by it is infringed by the manufacture, use, marketing, sale or importation of any Product, the Party becoming aware of such a matter shall immediately notify the other of it. ASLAN shall have the right to initiate, prosecute, defend and control legal action (whether by suit, proceedings, counter-claim, oppositions, customs procedure or otherwise) in respect of any such assertion; provided that assertion of any counterclaim for enforcement of Licensed Technology shall be subject to Section 8.4 below. Array shall have the right actively to co-operate and join with ASLAN in any legal action if it considers it necessary or desirable, and ASLAN shall have the right to have Array joined as a passive party to any legal action if necessary, and in either circumstance each party shall reasonably co-operate with the other in regard to the same. All costs and expenses (including attorneys’ fees) of any legal action brought in accordance with this Section 8.3 other than all of Array’s costs and expenses if Array actively elects to be joined as a party to such action) shall be borne by ASLAN. Any monetary recovery in connection with legal action shall be applied first to reimburse ASLAN for its out-of-pocket costs and expenses (including management time and reasonable attorneys’ fees) incurred in connection with any legal action and second to reimburse

- 20 -

Array for its out-of-pocket costs and expenses if it actively elects to be joined in such proceedings (including reasonable attorneys’ fees), incurred in connection with such infringement action. The remainder shall be split between the Parties.

8.4 Enforcement Rights .

8.4.1 Infringement by Third Parties . Subject to the provisions of this Section 8.4, in the event that Array or ASLAN reasonably believes that any Licensed Technology is infringed or misappropriated by a Third Party in any country in the Territory or is subject to a declaratory judgment action arising from such infringement in such country, in each case with respect to the development, manufacture, use or sale of a product substantially similar to a Product in the Field, ASLAN or Array (respectively) shall promptly notify the other party hereto.

(a) Right to Enforce . Each Party shall have the right (but not the obligation) to enforce the intellectual property rights within the Licensed Technology Controlled by such Party, with respect to such infringement in the Territory (for purposes of this Section 8.4, an “ Enforcement Action ”).

(b) Enforcement Costs; Recoveries . If a Party brings an Enforcement Action (the “ Enforcing Party ”), the other Party agrees to be joined as a party plaintiff and to give the Enforcing Party reasonable assistance and authority to file and prosecute the suit. The costs and expenses of the Enforcement Action shall be borne by the Enforcing Party, and any damages or other monetary awards recovered shall be retained by the Enforcing Party. A settlement or consent judgment or other voluntary final disposition of an Enforcement Action may be entered into without the consent of the Other Party; provided that such settlement, consent judgment or other disposition does not admit the invalidity or unenforceability of any patent within the Licensed Technology and provided further, that any rights to continue the infringing activity in such settlement, consent judgment or other disposition shall be limited to those rights that the Enforcing Party otherwise has the right to grant.

ARTICLE IX - CONFIDENTIALITY

9.1 Confidentiality; Exceptions . Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, the Parties agree that the receiving Party shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than as provided for in this Agreement any confidential and proprietary information and materials furnished to it by the other Party pursuant to this Agreement or any information developed during the term of this Agreement (collectively, “Confidential Information”), except to the extent that it can be established by the receiving Party that such Confidential Information:

(i) was in the lawful knowledge and possession of the receiving party prior to the time it was disclosed to, or learned by, the receiving Party, or was otherwise

- 21 -

developed independently by the receiving Party, as evidenced by written records kept in the ordinary course of business, or other documentary proof of actual use by the receiving Party;

(ii) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party;

(iii) became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving Party in breach of this Agreement; or

(iv) was disclosed to the receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the disclosing Party not to disclose such information to others.

9.2 Authorized Disclosure . Except as expressly provided otherwise in this Agreement, each Party may use and disclose Confidential Information of the other Party as follows: (i) in connection with the exercise of rights granted or reserved in this Agreement (including the rights to develop Products and to grant licenses and sublicenses hereunder) or to potential investors, acquirers, licensees or sublicensees or others on a need to know basis, under reasonable and customary contractual obligations of confidentiality, or (ii) to the extent such disclosure is reasonably necessary in filing or prosecuting patent, copyright and trademark applications, prosecuting or defending litigation, complying with applicable governmental regulations, conducting preclinical or clinical trials, or otherwise required by law, provided, however, that if a Party is required by law or regulation to make any such disclosure of the other Party’s Confidential Information it will, except where impracticable for necessary disclosures, for example in the event of medical emergency, give reasonable advance notice to the other Party of such disclosure requirement and, except to the extent inappropriate in the case of patent applications, will use its reasonable efforts to secure confidential treatment of such Confidential Information required to be disclosed or (iii) to the extent mutually agreed to by the Parties.

9.3 Termination of Prior Agreements . This Agreement supersedes the Confidentiality Agreement between the Parties (or their predecessors) dated November 30, 2010, including all modifications. All information exchanged between the Parties under those Agreements shall be deemed Confidential Information and shall be subject to the terms of this Article IX. All other provisions intended to survive termination of those Agreements shall survive according to their terms.

9.4 Publications . Each Party shall submit any proposed publication containing Confidential Information to the other Party at least thirty (30) days in advance to allow that Party to review such planned public disclosure. The reviewing Party will promptly review such proposed publication and make any objections that it may have to the publication of Confidential Information of the reviewing Party contained therein. Should the reviewing Party make an objection to the

- 22 -

publication of any such Confidential Information, then the Parties shall discuss the advantages and disadvantages of publishing such Confidential Information.

ARTICLE X - REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

10.1 Representations and Warranties . Each of the Parties hereby represents and warrants and covenants as follows:

(a) This Agreement is a legal and valid obligation binding upon such Party and enforceable in accordance with its terms. The execution, delivery and performance of the Agreement by such Party does not conflict with any agreement, instrument or understanding, oral or written, to which it is a Party or by which it is bound, nor violate any law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it.

(b) Each Party has not, and during the term of the Agreement will not, grant any right to any Third Party relating to its respective technology in the Field which conflicts with the rights granted to the other Party hereunder.

(c) As of the Effective Date, each Party owns or otherwise Controls all of the rights, title and interest in and to its Patents and Know-How within the Licensed Technology.

10.2 Due Diligence: Openness . Array hereby represents and warrants and covenants to ASLAN as follows, that:

(a) ARRAY has made available to ASLAN such information as requested by ASLAN to enable ASLAN to carry out its due diligence investigations before entering into the Agreement to make a fair assessment of the viability of the opportunity presented by ARRY-543;

(b) to the best of Array’s knowledge, the information referred to in Section 10.2.(a) was true, accurate, complete and not misleading on the date it was disclosed; and

(c) no material facts or events have become known to Array between the time of disclosure and the Effective Date that were not disclosed to ASLAN, which facts or events might reasonably be expected to affect ASLAN’s decision to proceed with entering into this Agreement.

10.3 Due Diligence: Openness . ASLAN hereby represents and warrants and covenants to Array as follows, that:

(a) ASLAN Has made available to Array such information as requested by Array to enable Array to carry out its due diligence investigations before entering into the Agreement to make a fair assessment of the ability of ASLAN to perform its obligation under this Agreement;

- 23 -

(b) to the best of ASLAN’s knowledge, the information referred to in Section 10.3.(a) was true, accurate, complete and not misleading on the date it was disclosed; and

(c) no material facts or events have arisen known to ASLAN between the time of disclosure and the Effective Date that were not disclosed to Array, which facts or events might reasonably be expected to affect Array’s decision to proceed with entering into this Agreement.

10.4 Disclaimer . Array and ASLAN specifically disclaim any guarantee that the Development Program will be successful, in whole or in part. The failure or lack of success of any activities of either or both of the Parties in developing Products will not be construed to constitute a breach of any representation or warranty or other obligation under this Agreement. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, ARRAY AND ASLAN MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE LICENSED TECHNOLOGY, ARRAY TECHNOLOGY, ASLAN TECHNOLOGY, COLLABORATION TECHNOLOGY, INFORMATION DISCLOSED HEREUNDER OR PRODUCTS INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF ANY TECHNOLOGY LICENSED HEREUNDER, PATENTED OR UNPATENTED, OR NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

10.5 Indemnification .

10.5.1 Indemnification by ASLAN . ASLAN hereby agrees to indemnify, defend and hold each of Array and its Affiliates and the agents, directors, officers, and employees of Array and such Affiliates and the successors and assigns of any of the foregoing, harmless from and against any and all suits, claims, actions, demands, liabilities, expenses and/or loss, including reasonable legal expense and attorney’s fees (“Losses”) resulting from third party claims based on the development, manufacture, use, handling, storage, sale or other disposition of chemical agents or Products by or under authority of ASLAN, or its Affiliates, agents or Sublicensees, and shall not apply to chemical agents or Products provided under separate supply terms by Array and / or its contractors under a separate Agreement.

10.5.2 Indemnification by Array . Array hereby agrees to indemnify, defend and hold each of ASLAN and its Affiliates and the agents, directors and employees of ASLAN and such Affiliates and the successors and assigns of any of the foregoing, harmless from and against any and all Losses resulting from third party claims based on the development, manufacture, use, handling, storage, sale or other disposition of chemical agents or Products by or under authority of Array, or its Affiliates, agents or licensees (in each case other than by or under authority of ASLAN and its Sublicensees under this Agreement).

- 24 -

10.5.3 Procedure . In the event a Party is seeking indemnification under Sections 10.5.1 or 10.5.2, it shall inform the other Party (the “Indemnifying Party”) of a claim as soon as reasonably practicable after it receives notice of the claim, shall permit the Indemnifying Party to assume direction and control of the defense of the claim (including the right to settle the claim) and shall reasonably cooperate as requested by the Indemnifying Party (at the expense of the Indemnifying Party) in the defense of the claim.

ARTICLE XI - TERM AND TERMINATION

11.1 Term . This Agreement shall become effective as of the Effective Date and, unless earlier terminated or adjusted under this Section 11.1, shall continue in full force and effect until the date that is [ * ] after the scheduled conclusion of the initial Development Plan , unless, before the end of that period (or any agreed adjustment thereof) , ASLAN has entered into a license with a Third Party under the Licensing Program, in which case Section 11.2 shall apply as regards the term of this Agreement.

11.1.1 If the JSC amends the timeline in the Development Plan, the agreement expiration date will be adjusted accordingly; provided, however, that the Agreement termination date will not be so adjusted if the adjustment resulted solely from ASLAN casting a deciding vote at the JSC (i.e., without JSC or mutual CEO approval, the then-current agreement termination date will not change).

11.1.2 If ASLAN is in material and substantial negotiations with a third party under the Licensing Program at the time of the scheduled agreement expiration date, then ASLAN shall notify Array in writing and the agreement termination date will be automatically extended until the conclusion of such negotiations with such third party; provided, however that such extension shall not exceed six (6) months unless otherwise agreed in writing by Array. In the event of such an extension, ASLAN agrees to promptly notify Array in writing of any conclusion of such negotiations with such third party.

11.2 Term Where License(s) Have Been Entered Into . If, before the end of the period (or any agreed adjustment) referred to in Section 11.1, ASLAN has entered into a license(s) with a Third Party under the Licensing Program, then (i) the license to ASLAN under Section 7.1 of this Agreement, and the rights of ASLAN under this Agreement to grant a license or sublicense under other Licensed Technology pursuant to the Licensing Program, shall continue in full force and effect, solely to the extent necessary to permit the continued granting by ASLAN of the license or sublicense under the Licensed Technology to the applicable Third Party under such license(s), for so long as such license(s) granted by ASLAN remain in full force and effect, (ii) this Agreement shall in all other respects terminate, and (iii) in so far as applicable the remainder of this Section 11 (in so far as relevant) shall apply.

- 25 -

11.3 Termination For Breach . Either Party may terminate this Agreement in the event the other Party shall have materially breached or defaulted in the performance of any of its material obligations hereunder, and such default shall have continued for ninety (90) days after written notice thereof was provided to the breaching Party by the non-breaching Party. Any termination shall become effective at the end of such ninety (90) day period unless the breaching Party (or any other party on its behalf) has cured any such breach or default prior to the expiration of the ninety (90) day period.

11.4 Termination Upon Notice .

11.4.1 Either Party Notice . Either Party may terminate the Agreement at any time in the event that (i) pre-agreed stopping criteria set forth in the Development Plan are met, or (ii) in the event of a material safety risk associated with the Product.

11.4.2 Array Notice .

(a) Failure to Initiate Committed Trial Within One Year of Effective Date. In the event ASLAN does not initiate any of the Committed Trials within one year of the Effective Date, then, subject to Array having fully complied with all its obligations to ASLAN under this Agreement in respect of such Committed Trial(s), then Array may, in its discretion, terminate this Agreement, upon sixty (60) days written notice to ASLAN and the remainder of this Section 11 shall apply; provided that such termination shall be ineffective if ASLAN both (i) initiates the Committed Trial(s) on or before the date sixty (60) days after such notice from Array (or on or before such later date as the Parties may mutually agree in writing); and (ii) certifies such initiation of the Committed Trial in writing to Array prior to the expiration of such sixty (60) day period (or on or before such later date as the Parties may have mutually agreed in writing).

(b) Notification of Missed Timeline . In the event ASLAN does not initiate and complete (i.e., conduct through to Completion) any of the Committed Trials within the timeframe set forth for such Committed Trial as set forth in the applicable Development Plan, ASLAN shall notify Array, through Array’s representatives on the JDC, and on request of Array the Parties will discuss the matter and its potential effects on timing of the overall Development Program.

(c) Request for Extension . In the event that ASLAN believes that, despite using active and Diligent Efforts, it will not be able to complete the Development Program as a whole within the applicable timeframe set forth in the applicable Development Plan for reasons beyond its control, it may request that the JSC consider a potential extension of the timeframe to complete the Development Program, and the procedures in Section 2.2.3 shall apply. It is understood and agreed, however, that Array via the JSC may refuse to agree to any such extension for completion of the overall Development Program, if ASLAN has failed to use at all times active and Diligent Efforts of at least the level required by Article VII, or if Array believes in good faith

- 26 -

and on reasonable objective grounds that Completion of the Development Program would nonetheless have been achievable within the applicable timeframe, notwithstanding those reasons claimed to be beyond ASLAN’s control.

(d) Termination Upon Notice from Array . If ASLAN does not complete the Development Program within the timeframe set forth in the applicable Development Plan, taking into account any extensions thereof approved by the JSC (within the scope of its authority) or agreed to in writing by Array, then Array may, in its discretion, terminate this Agreement, upon one hundred and eighty (180) days written notice to ASLAN, provided that such termination shall be ineffective if ASLAN both (i) conducts all of the applicable Committed Trial(s) through to Completion on or before the date one hundred and eighty (180) days after such notice from Array (or on or before such later date as the Parties may mutually agree in writing); and (ii) certifies such Completion in writing to Array prior to the expiration of such one hundred and eighty (180) day period (or on or before such later date as the Parties may have mutually agreed in writing).

11.5 Termination on Insolvency . Either Party may terminate this Agreement by notice, if, at any time, the other Party (i) suspends payment of its debts or is unable to pay its debts as they fall due or admits inability to pay its debts or is deemed unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986; or (ii) a petition is filed, a notice is given, a resolution is passed, or an order is made, for or in connection with the winding up of that Party (other than for the sole purpose of a scheme for a solvent amalgamation of that Party with one or more other companies or the solvent reorganisation of that Party); or (iii) an application is made to court, or an order is made, for the appointment of an administrator, or if an administrator is appointed over that Party; or (iv) a receiver is appointed over all or any of the assets of that Party; or (v) a creditor or encumbrancer of that Party attaches or takes possession of, or a distress, execution, sequestration or other such process is levied or enforced on or sued against, the whole or any part of the assets of that Party and such attachment or process is not discharged within thirty (30) days; or (vi) any event occurs, or proceeding is taken, with respect to that Party in any jurisdiction to which it is subject that has an effect equivalent or similar to any of the events mentioned in this Section 11.5 (i) to (v); or (vii) that Party suspends or ceases, or threatens to suspend or cease, to carry on all or a substantial part of its business.

11.6 Effect of Termination .

11.6.1 Accrued Rights, Surviving Obligations . Termination, relinquishment or expiration of the Agreement for any reason shall be without prejudice to any obligations which shall have accrued prior to such termination, relinquishment or expiration, including, without limitation, any and all damages arising from any breach hereunder.

11.6.2 Survival . Articles I, X and XII and Sections 3.5(a), 7.1.4, 8.1.1, 9.1, 9.2, 11.6, 11.7 and 11.8 shall survive the expiration and any termination of this Agreement; and Article V shall survive the expiration but not an earlier termination (except as provided below) of this

- 27 -

Agreement. Except as provided in this Section 11.6.2, or as otherwise provided in this Section 11.6, all obligations of each Party under this Agreement shall terminate upon any termination of this Agreement in its entirety.

11.7 Effect of Certain Terminations . In the event of expiration (i.e., without a successful conclusion of the Licensing Program) or early termination of this Agreement pursuant to Section 11.4.2 or a termination of this Agreement under Section 11.3 by reason of breach by ASLAN, the following shall apply:

11.7.1 Array shall have (and ASLAN agrees to grant and hereby grants to Array) an irrevocable, exclusive, royalty-free worldwide license, with the right to grant and authorize sublicenses, under all Licensed Technology Controlled by ASLAN, and under any trademarks owned by ASLAN and used specifically by ASLAN to identify the Products (excluding the ASLAN trade name and trade dress), to make, use, sell, import and otherwise exploit all Products. The foregoing rights and license shall be fully paid and royalty-free, provided that, if Array subsequently commercializes Products or grants a third party a license to commercialize Products, then Array shall pay to ASLAN either (i) if Array commercializes Products itself, a royalty on the Net Sales of such Products worldwide at a rate of [ * ], or (ii) if Array grants a Third Party a License to commercialize Products [ * ] of the Net Licensing Proceeds received therefrom, in each case up to the amount equal to ASLAN’s actual costs expended by ASLAN in performing the Development Plan, plus [ * ] beginning on the date of first commercial sale of a Product by Array or an Array licensee. For the avoidance of doubt, no payments will be due under this Section 11.7.1 in the event that Array buys out ASLAN’s rights to license Third Parties to develop and commercialize Products as described in Section 7.3.

11.7.2 Development . In the event there are any ongoing clinical trials of any Product, at Array’s request, following the date a notice of termination has been issued by Array pursuant to Section 11.3 or 11.4.2, ASLAN agrees to continue such trials in the normal course until the effective date of the termination, or, to the extent so requested by Array, to promptly transition to Array or its designee such clinical trials or portions thereof; in each case, at ASLAN’s expense.

11.7.3 Other . ASLAN shall, at Array’s request, take all steps reasonably necessary to enable Array to develop and commercialize Products in the Territory, including transferring to Array any regulatory submissions for such Products, selling manufactured materials and Product inventory, in Development Data, reports, SOPs, protocols, ASLAN Know-How or other commercially reasonable arrangements as the Parties may agree.

11.8 Termination Not Sole Remedy . Termination is not the sole remedy under this Agreement and, whether or not termination is effected, all other remedies will remain available except as agreed to otherwise herein.

- 28 -

ARTICLE XII - MISCELLANEOUS

12.1 Publicity . Each of the Parties hereto agrees not to disclose to any Third Party the financial terms of this Agreement without the prior written consent of the other Party hereto, except to advisors, actual or potential investors or acquirers and others on a need-to-know basis under circumstances that reasonably ensure the confidentiality thereof, or to the extent required by law. Any press release to announce the execution of this Agreement, the achievement of a milestone or the progress of the collaboration shall require prior written agreement of the Parties; thereafter, ASLAN and Array may each disclose to third Parties the information contained in such press release and Question & Answer outline without the need for further approval by the other.

12.2 Governing Law . This Agreement and any dispute arising from the performance or breach hereof shall be governed by and construed and enforced in accordance with, the laws of England and Wales, without reference to conflicts of laws principles, except that inventorship of inventions shall be determined in accordance with the patent laws of the United States.

12.3 Assignment . This Agreement shall not be assignable by either Party to any Third Party hereto without the written consent of the other Party hereto; except either Party may assign this Agreement, without such consent, to an entity that acquires all or substantially all of the business or assets of such Party to which this Agreement pertains (whether by merger, reorganization, acquisition, sale or otherwise), provided that such entity agrees in writing to be bound by the terms and conditions of this Agreement. If any permitted assignment would result in withholding or other similar taxes becoming due on payments from the assigning Party to the other Party under this Agreement, the assigning Party shall be responsible for all such taxes resulting from such assignment, and the amount of such taxes shall not be withheld or otherwise deducted from any amounts payable to other Party. No assignment and transfer shall be valid and effective unless and until the assignee/transferee agrees in writing to be bound by the provisions of this Agreement. The terms and conditions shall be binding on and inure to the benefit of the permitted successors and assigns of the Parties.

12.4 Performance Warranty . Each Party may utilize its Affiliates in fulfilling its obligations and exercising its rights under this Agreement. Each Party hereby warrants and guarantees the performance of any and all obligations hereunder on behalf of its Affiliate(s).

12.5 Notices . All notices, requests and communications hereunder shall be in writing and shall be personally delivered or sent by facsimile transmission (confirmed by prepaid registered or certified mail, return receipt requested or by international express delivery service) (e.g., Federal Express), mailed by registered or certified mail (return receipt requested), postage prepaid, or sent by international express courier service, and shall be deemed to have been properly served to the addressee upon receipt of such written communication, to following addresses of the Parties, or such other address as may be specified in writing to the other Party hereto:

- 29 -

If to Array,

addressed to:	Array BioPharma Inc.
	3200 Walnut Street
	Boulder, Colorado 80301
	Attention: Chief Operating Officer
	Telephone: (303) 381-6699
	Telecopy: (303) 381-6697


With copy to:	Array BioPharma Inc.
	3200 Walnut Street
	Boulder, Colorado 80301
	Attention: General Counsel
	Telephone: (303) 381-6699
	Telecopy: (303) 386-1290

If to ASLAN,

addressed to:	ASLAN Pharmaceuticals
	10A Bukit Pasoh Road
	Singapore, 089824
	Attention: Head of Finance
	Telephone: +65 6222 4235
	Telecopy: +65 6225 2419

With copy to:	ASLAN Pharmaceuticals
	10A Bukit Pasoh Road
	Singapore, 089824
	Attention: Chief Business Officer
	Telephone: +65 6222 4235
	Telecopy: +65 6225 2419

12.6 Waiver . Neither Party may waive or release any of its rights or interests in this Agreement except in writing. The failure or either Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition. No waiver by either Party of any condition or term in any one or more instances shall be construed as a continuing waiver of such condition or term or of another condition or term.

12.7 Severability . If any provision hereof should be held invalid, illegal or unenforceable in any jurisdiction, the Parties shall negotiate in good faith a valid, legal and enforceable substitute

- 30 -

provision that most nearly reflects the original intent of the Parties and all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the Parties hereto as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction.

12.8 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

12.9 Entire Agreement . This Agreement and any separate supply agreement as contemplated by Section 3.4.2 sets forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto and supersede and terminate all prior agreements and understanding between the Parties. There are no covenants, promises, agreements, warranties, representations conditions or understandings, either oral or written, between the Parties other than as set forth herein and therein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties hereto unless reduced to writing and signed by the respective authorized officers of the Parties.

12.10 Force Majeure . Neither Party shall be in breach of this Agreement nor liable for delay in performing, or failure to perform, any of its obligations under this Agreement if such delay or failure results from events, circumstances or causes beyond its reasonable control, and in such circumstances the affected party shall be entitled to a reasonable extension of the time for performing such obligations, provided that if the period of delay or non-performance continues for six (6) months, the Party not affected may terminate this Agreement by giving 30 days’ written notice to the other Party.

12.11 Independent Contractors . Nothing herein shall be construed to create any relationship of employer and employee, agent and principal, partnership or joint venture between the Parties. Each Party is an independent contractor. Neither Party shall assume, either directly or indirectly, any liability of or for the other Party. Neither Party shall have the authority to bind or obligate the other Party, and neither Party shall represent that it has such authority.

12.12 Headings . Headings used herein are for convenience only and shall not in any way affect the construction of or be taken into consideration in interpreting this Agreement.

[Remainder of this page intentionally left blank.]

- 31 -

12.13 Counterparts . This Agreement may be executed in two counterparts, each of which shall be deemed an original, and all of which together, shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by their duly authorized representatives as of the date and year first above written.

Array BioPharma Inc.				ASLAN Pharmaceuticals

By:	/s/ Robert E. Conway			By:	/s/ Carl Firth

Name:			Robert E. Conway	Name:			Carl Firth

Title:		CEO		Title:		CEO

Date:		12 July 2011		Date:		12 July 2011

- 32 -

EXHIBIT 1.13

Committed Trials

1) [ * ]

2) [ * ]

- 33 -

EXHIBIT 3.2

Initial Development Plan

[ * ]

- 34 -

EXHIBIT 10.57

LICENSE AGREEMENT

BY AND BETWEEN

GENENTECH, INC.,

F. HOFFMANN-LA ROCHE, LTD

AND

ARRAY BIOPHARMA INC.

EXHIBIT 10.57

TABLE OF CONTENTS

		Page

Article 1 Definitions		2

1.1	“Accounting Standard”	2
1.2	“Affiliate”	2
1.3	“Alliance Manager”	2
1.4	“Annual Development Report”	2
1.5	“Array Compound”	2
1.6	“Array Companion Diagnostic IP”	2
1.7	“Array Existing IP”	2
1.8	“Array Future IP”	3
1.9	“Array IP”	3
1.10	“Array Licensed Product”	3
1.11	“Array Technology and Materials”	3
1.12	“ARRY-575”	3
1.13	“Bankruptcy Code”	3
1.14	“Business Day”	3
1.15	“Clinical Materials (ARRY-575)”	3
1.16	“Commercially Reasonable Efforts”	4
1.17	“Companion Diagnostic”	4
1.18	“Companion Diagnostic For Disease”	4
1.19	“Companion Diagnostic For Target”	4
1.20	“Compound”	4
1.21	“Compound Assay”	5
1.22	“Compound Criteria”	5
1.23	“Confidential Information”	5
1.24	“Controlled Affiliate”	5
1.25	“Controlled by”	5
1.26	“Disclosing Party”	5
1.27	“Dispute”	6
1.28	“Dispute Resolution Provisions”	6
1.29	“Dosed”	6
1.30	“Exclusivity Obligations”	6
1.31	“Field”	6
1.32	“First Commercial Sale”	6
1.33	“GDC-0425”	6
1.34	“Genentech IP”	6
1.35	“Included Affiliate”	6
1.36	“IND”	6

- i -

EXHIBIT 10.57

1.37	“Infringement”	6
1.38	“Initiate Clinical Development”	7
1.39	“Jointly Prosecuted and Maintained Patent”	7
1.40	“Know-How”	7
1.41	“License To Genentech”	7
1.42	“Licensed Product”	7
1.43	“Major EU Country”	7
1.44	“Milestone Amount”	7
1.45	“Milestone Event”	7
1.46	“Milestone Payment”	7
1.47	“Milestone Table”	7
1.48	“Net Sales”	8
1.49	“Owned or Controlled by Array”	8
1.50	“Owned or Controlled by Genentech”	8
1.51	“Patents”	8
1.52	“Phase II Clinical Trial”	8
1.53	“Phase III Clinical Trial”	8
1.54	“Product Enablement Package”	8
1.55	“Product Enablement Package Request”	9
1.56	“Program Manager”	9
1.57	“Receiving Party”	9
1.58	“Regulatory Approval”	9
1.59	“Royalty Adjustments”	9
1.60	“Royalty Payment”	9
1.61	“Royalty Rate”	9
1.62	“Royalty Report”	9
1.63	“Royalty Term”	9
1.64	“Sales”	9
1.65	“Sales Deductions”	9
1.66	“Satisfy the Compound Criteria”	9
1.67	“Sublicensee”	9
1.68	“Target”	9
1.69	“Termination Date”	10
1.70	“Territory”	10
1.71	“Third Party”	10
1.72	“Third Party IP”	10
1.73	“Third Party License Agreement”	10
1.74	“Third Party Payments”	10
1.75	“Transferred Technology and Materials”	10
1.76	“Treatment Regimen”	10
1.77	“Upfront Payment”	10

- ii -

EXHIBIT 10.57

Article 2 Program Managers; Technology and Material Transfer		10

2.1	Program Managers	10
2.2	Technology and Material Transfer	10

Article 3 Alliance Managers; Rights and Responsibilities of the Parties		11

3.1	Alliance Managers	11
3.2	Mutual Rights and Responsibilities	12
3.3	Genentech’s Rights and Responsibilities	12
3.4	Array’s Rights and Responsibilities	13
3.5	Genentech Option for Array to Perform CMC Activities	14

Article 4 Licenses		14

4.1	License To Genentech	14
4.2	Maintenance of Intellectual Property	15
4.3	No Implied Licenses	16

Article 5 Payments by Genentech to Array		17

5.1	Upfront Payment	17
5.2	Milestones	17
5.3	Royalties	20

Article 6 Financial Reports, Audits and Other Financial Provisions		22

6.1	Calculation of Net Sales	22
6.2	Royalty Reports	24
6.3	Payment Related Provisions	25
6.4	Records, Audits and Other Financial Provisions	26

Article 7 Intellectual Property		27

7.1	Disclosures of IP	27
7.2	Patent Prosecution and Maintenance	27
7.3	Patent Interferences	29
7.4	CREATE Act	29
7.5	Limitation on Rights and Obligations With Respect to IP	29
7.6	Bankruptcy Matters	30

Article 8 Enforcement and Defense of IP; Defense of Third Party Infringement Claims		30

8.1	Notice	30
8.2	Enforcement of IP	30
8.3	Defense of Patents	31
8.4	Defense of Third Party Infringement Claims	31

- iii -

EXHIBIT 10.57

Article 9 Confidentiality		32

9.1	Disclosure and Use of Confidential Information	32
9.2	Exceptions	32
9.3	Authorized Disclosures	32
9.4	Continuing Obligation	34
9.5	Termination of Prior Confidentiality Agreements	34

Article 10 Public Disclosures; Use of Names		34

10.1	Press Releases and Other Public Disclosures	34
10.2	Use of Names	36

Article 11 Term; Termination		36

11.1	Term	36
11.2	Termination for Material Breach	36
11.3	Termination for Convenience	37
11.4	Effects of Termination or Expiration	37
11.5	Accrued Rights and Obligations	39
11.6	Survival	39

Article 12 Representations and Warranties		40

12.1	Array Representations and Warranties	40
12.2	Genentech Representations and Warranties	41
12.3	Disclaimers	42

Article 13 Indemnification; Limitation on Liability; Insurance		42

13.1	Indemnification	42
13.2	Limitation on Liability	44
13.3	Insurance	44

Article 14 Dispute Resolution		45

14.1	Internal Resolution	45
14.2	Arbitration	45
14.3	Subject Matter Exclusions	47

Article 15 Miscellaneous		47

15.1	Notices	47
15.2	Governing Law	49
15.3	Actions of Affiliates	49
15.4	Assignment	49
15.5	Force Majeure	49
15.6	Relationship of the Parties	50
15.7	Amendment; Waiver	50

- iv -

EXHIBIT 10.57

15.8	Construction; Captions	50
15.9	Severability	50
15.10	Entire Agreement	50
15.11	Counterparts; Facsimiles	50


Exhibits

Exhibit A	Listed Array Technology and Materials
Exhibit B	Press Release
Exhibit C	Listed Compounds
Exhibit D	Compound Assay & Compound Criteria
Exhibit E	Listed Patents
Exhibit F	Specifications for Clinical Materials (ARRY-575)

- v -

EXHIBIT 10.57

LICENSE AGREEMENT

THIS LICENSE AGREEMENT (“ Agreement ”) is made and entered into, effective as of August 5, 2011 (“ Effective Date ”), by and between Genentech, Inc., a Delaware corporation, having a principal place of business at 1 DNA Way, South San Francisco, California 94080 (“ GNE ”); F. Hoffmann-La Roche, Ltd, having a principal place of business at Grenzacherstrasse 124, CH 4070 Basel, Switzerland (“ Roche ”) (GNE and Roche together referred to as “ Genentech ”) and Array BioPharma Inc., a Delaware corporation, having a principal place of business at 3200 Walnut Street, Boulder, Colorado 80301 (“ Array ”). Genentech and Array are each referred to, individually, as a “ Party ” and, collectively, as the “ Parties .”

RECITALS

A. Array and Genentech each possess certain proprietary compounds that bind to and inhibit a particular Target (as defined below);

B. Array and Genentech each possess certain intellectual property rights related to such compounds; and

C. Array and Genentech wish to contribute certain of their respective such compounds to a program under this Agreement, pursuant to which Genentech would engage in the research, development, manufacture and sale of pharmaceutical products containing such compounds.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Genentech and Array agree as follows:

- 1 -

EXHIBIT 10.57

Article 1
Definitions

Capitalized terms used in this Agreement shall have the meanings set forth below, unless otherwise specifically indicated.

1.1 “ Accounting Standard ” means, with respect to a given Party (or Sublicensee) either the (a) International Financial Reporting Standards (“ IFRS ”) or (b) United States generally accepted accounting principles (“ GAAP ”), in either case, that is currently used at the applicable time by, and as consistently applied by, such Party (or Sublicensee).

1.2 “Affiliate” of a Party means any company, corporation or other business entity that is controlled by, controlling, or under common control with such Party. For purposes of this definition, “control” of a business entity (including “controlled by,” “under common control with” or the like) means direct or indirect beneficial ownership of more than fifty percent (50%) interest in the voting stock (or the equivalent) of such business entity or having the right to direct, appoint or remove a majority of members of its board of directors (or their equivalents) or having the power to control the general management of such business entity, by law or contract. Notwithstanding the foregoing, for purposes of this Agreement, Chugai Pharmaceutical Co., Ltd, (for purposes of this definition, “ Chugai ”) and all business entities controlled by Chugai shall not be considered Genentech Affiliates, unless and until Genentech elects to include one or more of such business entities as a Genentech Affiliate, by providing written notice to Array of such election.

1.3 “ Alliance Manager ” is defined in Section 3.1.

1.4 “ Annual Development Report ” is defined in Section 3.3(d).

1.5 “ Array Compound ” means a Compound that, as between the Parties, is solely Owned or Controlled by Array.

1.6 “ Array Companion Diagnostic IP ” means (a) Array Existing IP and (b) all Patents and Know-How that are both (i) during the term of the Agreement, Owned or Controlled by Array and (ii) reasonably necessary to make, use, sell, offer for sale or import Companion Diagnostics, in each case, with respect to Third Party IP, subject to Section 4.2(b) and Section 4.2(c), as applicable.

1.7 “ Array Existing IP ” means all Patents and Know-How that are both (a) as of the Effective Date, Owned or Controlled by Array and (b) necessary or useful to make, use, sell, offer for sale or import Compounds, Licensed Products and/or Companion Diagnostics. For

- 2 -

EXHIBIT 10.57

purposes of this Agreement, any Patents and Know-How Controlled by Array by virtue of a license granted to Array in a Third Party License Agreement entered into prior to the Effective Date shall be deemed to be have been granted to Array as of the Effective Date.

1.8 “ Array Future IP ” means all Patents and Know-How (excluding Array Existing IP) that are both (a) during the term of the Agreement, Owned or Controlled by Array and (b) reasonably necessary to make, use, sell, offer for sale or import Compounds.

1.9 “ Array IP ” means Array Existing IP and Array Future IP, in each case, with respect to Third Party IP, subject to Section 4.2(b) and Section 4.2(c), as applicable.

1.10 “ Array Licensed Product ” means a Licensed Product that contains an Array Compound.

1.11 “ Array Technology and Materials ” means all Know-How and materials:

(a) listed on Exhibit A; and

(b) if not listed on Exhibit A, that are both (i) as of the Effective Date, Owned or Controlled by Array and (ii) reasonably necessary for Genentech to manufacture, develop and commercialize Compounds and/or Licensed Products, including (A) regulatory filings and supporting documents; (B) Clinical Materials (ARRY-575); and (C) study reports that support an IND filing by Genentech for a Licensed Product that contains ARRY-575.

1.12 “ ARRY-575 ” means the compound that Array refers to internally by such designation as of the Effective Date.

1.13 “ Bankruptcy Code ” means Title 11 United States Code, or any comparable bankruptcy and insolvency laws in any jurisdiction. References in this Agreement to particular paragraphs or other sections of the Bankruptcy Code shall refer to the United States Bankruptcy Code and, with respect to the Bankruptcy Code of another jurisdiction, shall be interpreted to the extent applicable to such Bankruptcy Code mutatis mutandis .

1.14 “ Business Day ” means a day, other than a Saturday, Sunday or day on which commercial banks located in the city of the principal place of business of a Party are authorized or required by law or regulation to close.

1.15 “ Clinical Materials ( ARRY-575 ) ” means the ARRY-575 drug materials produced by or on behalf of Array for phase I clinical trials.

- 3 -

EXHIBIT 10.57

1.16 “ Commercially Reasonable Efforts ” means, with respect to development and commercialization of a Licensed Product, Genentech’s use of those efforts and resources, consistent with the exercise of prudent scientific and business judgment, as are applied by Genentech to other pharmaceutical products of comparable commercial potential, stage of medical/scientific development, probability of technical success, technical and regulatory profile and patent protection, in a particular geographic locale.

1.17 “ Companion Diagnostic ” means any product or service that:

(a) identifies a person having a disease or condition, or a molecular genotype or phenotype that predisposes a person to such disease or condition, for which a Licensed Product could be used to treat and/or prevent such disease or condition;

(b) defines the prognosis or monitors the progress of a disease or condition in a person for which a Licensed Product could be used to treat and/or prevent such disease or condition;

(c) is used to select a Licensed Product alone or as part of a therapeutic or prophylactic regimen; and/or

(d) is used to predict or confirm a Licensed Product’s biological activity and/or to optimize dosing or the scheduled administration of a Licensed Product.

1.18 “ Companion Diagnostic For Disease ” means any Companion Diagnostic within clause (a) or clause (b) of the definition of Companion Diagnostic.

1.19 “ Companion Diagnostic For Target ” means any Companion Diagnostic within clause (c) or clause (d) of the definition of Companion Diagnostic.

1.20 “ Compound ” means:

(a) ARRY-575, GDC-0425 and the other compounds listed on Exhibit C; and

(b) any compound with a molecular weight of two thousand (2,000) unified atomic mass units or less that:

(i) is Owned or Controlled by Array or Owned or Controlled by Genentech and that, at any time during the term of the Agreement, Satisfies the Compound Criteria and is contained in a product for which Array or Genentech (or any of their respective (A) Included Affiliates or (B) collaborators, licensees or other parties on their behalf, in each

- 4 -

EXHIBIT 10.57

case in this clause (B), under an agreement with Array or Genentech (as the case may be) entered into on or after the Effective Date) Initiates Clinical Development; or

(ii) is Owned or Controlled by Genentech and that, at any time during the term of the Agreement, Satisfies the Compound Criteria and Genentech elects to include as a Compound by providing written notice to Array of such election.

References in this Agreement to “a unique Compound (or compound),” “the same Compound (or compound)” or the like mean a particular Compound (or compound) that has a unique chemical structure (which includes the salts, solvates, isomers, polymorphs and prodrugs of such Compound (or compound)).

1.21 “ Compound Assay ” means one or more assays, as set forth on Exhibit D, subject to amendment under Section 3.2(a). Each such assay, individually, and all such assays, collectively, are referred to as the Compound Assay.

1.22 “ Compound Criteria ” means, with respect to a given Compound Assay, the criteria associated with such Compound Assay, as set forth on Exhibit D, subject to amendment under Section 3.2(a).

1.23 “ Confidential Information ” (of given Party) means nonpublic information that is disclosed in connection with this Agreement (whether orally, electronically, visually or in writing) by or on behalf of such Party to the other Party or its designee (including, an Affiliate). Notwithstanding anything to the contrary, the terms and conditions of this Agreement are the Confidential Information of both Parties.

1.24 “ Controlled Affiliate ” of a Party means an Affiliate of such Party that is controlled by such Party as of the relevant date, where “controlled by” is as defined in the definition of Affiliate.

1.25 “ Controlled by ” or “ Control ,” or the like, means the possession by a party of, (a) with respect to materials or information, the right to physical possession of those items and, to the extent provided in this Agreement, the right of such party to use those items and/or provide them to a Party or a Third Party or (b) with respect to intellectual property rights, to the extent provided in this Agreement, the right of such party to exploit such rights and/or the right to grant to a Party or Third Party a license, sublicense or other right to exploit, in the case of either (a) or (b), without violating (i) any law or governmental regulation or (ii) the terms of any agreement with a Third Party that exists as of the Effective Date or, if such right is acquired after the Effective Date, as of the date such party first acquired possession of such right.

1.26 “ Disclosing Party ” is defined in Section 9.1.

- 5 -

EXHIBIT 10.57

1.27 “ Dispute ” or “Disputed Matter , ” or the like, means any disagreement, controversy, claim or legal proceeding arising out of or relating to this Agreement, or the breach, termination or invalidity thereof.

1.28 “Dispute Resolution Provisions” means the provisions for resolving Disputes set forth in Article 14.

1.29 “ Dosed ” is defined in Section 5.2(b).

1.30 “Exclusivity Obligations” is defined in Section 3.4(c).

1.31 “Field” means any use.

1.32 “ First Commercial Sale ” means, with respect to a given Licensed Product in a particular country, the first bona fide sale of such Licensed Product in such country, by or under authority of Genentech or a Sublicensee, which sale is included in the calculation of Net Sales. The date of sale of a Licensed Product shall be deemed to occur on the later of (a) the date such Licensed Product is shipped or (b) the date of the invoice to the purchaser of such Licensed Product.

1.33 “ GDC-0425 ” means the compound that GNE refers to internally by such designation as of the Effective Date.

1.34 “ Genentech IP ” means all Patents and Know-How that are both (a) as of the relevant date, Controlled by Genentech and (b) necessary or useful to make, use, sell, offer for sale or import Compounds, Licensed Products and/or Companion Diagnostics.

1.35 “ Included Affiliate ” of a Party means an Affiliate of such Party that (a) as of the Effective Date, is an Affiliate of such Party or (b) prior to the fourth anniversary of the Effective Date, becomes an Affiliate of such Party because such Party controls such Affiliate, or, in the case of Genentech, such Affiliate is controlled by an entity that controls Genentech as of the Effective Date, where “controls” and “controlled by” are as defined in the definition of Affiliate.

1.36 “ IND ” means an investigational new drug application filed with the United States Food and Drug Administration pursuant to 21 CFR Part 312 before commencing clinical trials with a product, or any comparable filing with a relevant regulatory authority in any jurisdiction, together with any additions, deletions and supplements thereto.

1.37 “ Infringement ” is defined in Section 8.1.

- 6 -

EXHIBIT 10.57

1.38 “ Initiate Clinical Development ” or “ Initiating Clinical Development ,” or the like, means, with respect to a given product, to file an IND for such product to the relevant regulatory authority. With respect to a product that is acquired by a Party from a Third Party (whether acquired under a license from such Third Party or otherwise) after the Effective Date, if an IND for such product was filed prior to such acquisition, and clinical development or commercialization remains on-going, Initiation of Clinical Development of such product shall be deemed to occur upon such acquisition.

1.39 “ Jointly Prosecuted and Maintained Patent ” is defined in Section 7.2(b).

1.40 “ Know-How ” means scientific or other technical information, including data, assays, protocols, methods, processes, techniques, unpublished patent applications, models, designs and databases.

1.41 “ License To Genentech ” means, collectively, the licenses granted by Array to Genentech under Section 4.1.

1.42 “ Licensed Product ” means a product, other than a Companion Diagnostic, that contains a Compound as an active ingredient. References in the Agreement to “a given Licensed Product,” “each Licensed Product” or the like, mean a Licensed Product that contains a particular unique Compound that is not (and was not previously) contained in any other Licensed Product. By way of example, but not limitation, if a first Licensed Product contains a single unique Compound (e.g., Compound X) and a subsequent (second) Licensed Product contains a different single unique Compound (e.g., Compound Y), a Licensed Product that contains Compound X and Compound Y is, for purposes of this Agreement, the same Licensed Product as such first Licensed Product. By way of further example, but not limitation, a Licensed Product that contains Compound X and another different unique Compound (e.g., Compound Z) is, for purposes of this Agreement, yet a third Licensed Product that contains Compound Z.

1.43 “ Major EU Country ” means any one of the following countries: France, Germany, Italy, Spain and the United Kingdom.

1.44 “ Milestone Amount ” is a milestone amount set forth in the Milestone Table.

1.45 “ Milestone Event ” is a milestone event set forth in the Milestone Table.

1.46 “ Milestone Payment ” is defined in Section 5.2(a).

1.47 “ Milestone Table ” is the milestone table set forth in Section 5.2(c).

- 7 -

EXHIBIT 10.57

1.48 “Net Sales” is defined in Section 6.1(c).

1.49 “ Owned or Controlled by Array ” means (a) owned or Controlled by Array or (b) owned or Controlled by an Array Included Affiliate. Notwithstanding the foregoing, if any Array Affiliate (including one that is not an Included Affiliate) discovers or creates any compounds or intellectual property rights through the use of Array’s Know-How exclusively licensed under the License To Genentech or the use of Genentech’s Confidential Information, such compounds and intellectual property rights shall be deemed to be Owned or Controlled by Array as of the Effective Date and during the term of the Agreement.

1.50 “ Owned or Controlled by Genentech ” means (a) owned or Controlled by Genentech or (b) owned or Controlled by a Genentech Included Affiliate. Notwithstanding the foregoing, if any Genentech Affiliate (including one that is not an Included Affiliate) discovers or creates any compounds or intellectual property rights through the use Array’s Know-How included in the License To Genentech or the use of Array’s Confidential Information, such compounds and intellectual property rights shall be deemed to be Owned or Controlled by Genentech as of the Effective Date and during the term of the Agreement.

1.51 “ Patents ” means all patents, patent applications, pipeline protections and invention certificates, in any country, including any reissues, extensions, supplementary protection certificates, registrations, divisions, continuations, continuations-in-part, reexaminations, substitutions or renewals thereof.

1.52 “Phase II Clinical Trial” means a study in humans, conducted by or on behalf of Genentech (or a Sublicensee), the principal purpose of which is a determination of safety and efficacy of a Licensed Product in patients with the disease or condition under study, as further described in 21 CFR. § 312.21(b), or a similar clinical study in a country other than the United States.

1.53 “Phase III Clinical Trial” means a study in humans, conducted by or on behalf of Genentech (or a Sublicensee), of the safety and efficacy of a Licensed Product that is prospectively designed, statistically powered and conducted to provide an adequate basis for obtaining Regulatory Approval for such Licensed Product for patients with the disease or condition under study, as further described in 21 CFR § 312.21(c) (as may be amended), or a similar clinical study in a country other than the United States.

1.54 “ Product Enablement Package ” means a package of particular Know-How and materials that (a) meet all the requirements described in Section 11.4(c)(i) and (b) are specified in writing by Array for inclusion in the Product Enablement Package under Section 11.4(c)(ii).

- 8 -

EXHIBIT 10.57

1.55 “ Product Enablement Package Request ” is defined in Section 11.4(b)(iv).

1.56 “ Program Manager ” is defined in Section 2.1.

1.57 “ Receiving Party ” is defined in Section 9.1.

1.58 “ Regulatory Approval ” is defined in Section 5.2(b).

1.59 “ Royalty Adjustments ” is defined in Section 5.3(d).

1.60 “ Royalty Payment ” is defined in Section 5.3(a).

1.61 “ Royalty Rate ” is defined in Section 5.3(a).

1.62 “ Royalty Report ” is defined in Section 6.2.

1.63 “ Royalty Term ” is defined in Section 5.3(b).

1.64 “Sales” is defined in Section 6.1(b).

1.65 “Sales Deductions” is defined in Section 6.1(c).

1.66 “ Satisfy the Compound Criteria ” or “ Satisfies the Compound Criteria ,” or the like, means, with respect to a given compound, such compound would (if tested) satisfy the applicable Compound Criteria associated with each of the Compound Assays, whether or not such compound has actually been so tested at any particular time. For clarity, if there is more than one Compound Assay, a given compound must satisfy the Compound Criteria of each Compound Assay to Satisfy the Compound Criteria.

1.67 “ Sublicensee ” means, with respect to a given Licensed Product: (a) a Third Party that is granted a license, sublicense or other right, under the License To Genentech or under other intellectual property rights Controlled by Genentech (or a Genentech Affiliate), to use and sell such Licensed Product (regardless of what other rights are or are not granted), including if granted to such Third Party directly by Genentech or indirectly through multiple tiers of sublicensees or (b) a Genentech Affiliate that exercises Genentech’s rights or performs Genentech’s obligations under this Agreement with respect to such Licensed Product (as permitted under Section 15.3), whether or not such Affiliate is expressly granted a license, sublicense or other right to conduct such activities.

1.68 “ Target ” means the kinase known as Chk1 (as identified in “Conservation of the Chk1 Checkpoint Pathway in Mammals: Linkage of DNA Damage to Cdk Regulation Through

- 9 -

EXHIBIT 10.57

Cdc25,” Yolanda Sanchez, et al., Science 277, 1497 (1997) - hChk1 Sequence identified with GenBank accession number AF016582 and functional variants thereof), including (a) its full length protein; (b) any of the isoforms, orthologues, deletional, substitutional and/or insertional variants of such full length protein; and (c) any fragments of the foregoing in (a) or (b).

1.69 “ Termination Date ” means the effective date of termination of this Agreement.

1.70 “ Territory ” means worldwide.

1.71 “ Third Party ” means any person or entity other than a party to this Agreement.

1.72 “ Third Party IP ” means Patents and Know-How that are Controlled by a Party by virtue of a Third Party License Agreement.

1.73 “ Third Party License Agreement ” means an agreement entered into by a Party and a Third Party pursuant to which such Party is granted a license, sublicense or other right under Patents and/or Know-How of such Third Party.

1.74 “ Third Party Payments ” is defined in Section 5.3(d)(ii).

1.75 “ Transferred Technology and Materials ” is defined in Section 2.2(b).

1.76 “ Treatment Regimen ” is defined in Section 5.2(b).

1.77 “ Upfront Payment ” is defined in Section 5.1.

Article 2
Program Managers; Technology and Material Transfer

2.1 Program Managers. Promptly following the Effective Date, each Party shall designate an individual to act as its primary contact for matters related to the transfer of Array Technology and Materials (each, such Party’s “ Program Manager ”). Either Party may replace its Program Manager at any time upon prior written notice (including by email) to the other Party’s Program Manager.

2.2 Technology and Material Transfer.

(a) Transfer; Costs. Within sixty (60) days after the Effective Date (unless otherwise agreed by Genentech or as otherwise specified on Exhibit A), Array shall complete the transfer to Genentech (and/or to a designated Third Party) of all Array Technology and

- 10 -

EXHIBIT 10.57

Materials. Any costs related to such transfer to Genentech (or a Genentech Affiliate) shall be borne by Array. Any costs related to such transfer to a Third Party (other than a Genentech Affiliate) shall be borne by Genentech.

(b) Documentation of Transferred Technology and Materials. The Parties shall generate (and update as necessary) a written document, signed by both Program Managers, that identifies the particular Know-How and materials that Array transfers under Section 2.2(a) or that Array otherwise elects to include in such transfer or to transfer at another time (all such transferred Know-How and Materials, individually and collectively, “ Transferred Technology and Materials ”).

(c) Tangible Materials. The provisions of this Section 2.2(c) apply to tangible materials included in the Transferred Technology and Materials. Except as otherwise expressly provided in this Agreement, as between the Parties, all right, title and interest in and to all such materials (and any intellectual property rights relating thereto) shall remain with Array. Genentech (or a Third Party on behalf of Genentech) may use such materials only in connection with activities contemplated by this Agreement or in order to further the purposes of this Agreement; provided, however, any such Third Party shall be subject to a written agreement under which such Third Party is permitted to use such materials only on behalf of Genentech for such purposes.

(d) Clinical Materials ( ARRY-575). On or before [ * ] , Array shall deliver to Genentech’s Alliance Manager the “Certificate of Analysis” demonstrating that Clinical Materials (ARRY-575), of at least the quantity for such materials specified in item #1 on Exhibit A, meet the specifications for such materials specified on Exhibit F. In the event that Array does not deliver the “Certificate of Analysis” on or before such date, Array shall [ * ] . [ * ] . In the event the Clinical Materials (ARRY-575) are not delivered when requested by Genentech as specified in item #1 on Exhibit A, [ * ] will be taken into account in determining other rights or remedies that Genentech may have at law or in equity or otherwise, in the event Genentech seeks compensation for such breach of delivery.

Article 3
Alliance Managers; Rights and Responsibilities of the Parties

3.1 Alliance Managers. Promptly following the Effective Date, each Party shall designate an individual to act as its primary contact for matters related to this Agreement, other than those matters for which other contacts are expressly provided in the Agreement (each, such Party’s “ Alliance Manager ”). The Alliance Managers shall facilitate the resolution of issues and Disputes and, if possible, avert escalation of such matters. Either Party may replace its

- 11 -

EXHIBIT 10.57

Alliance Manager at any time upon prior written notice (including by email) to the other Party’s Alliance Manager.

3.2 Mutual Rights and Responsibilities.

(a) Amendments to the Compound Assay. At one Party’s written request to the other Party’s Alliance Manager, the Parties shall discuss amending the definition of the Compound Assay (and associated Compound Criteria) as reasonably required to meet the needs of the requesting Party. The Parties agree that the definition of Compound Assay (and associated Compound Criteria) shall only be amended by a written document signed by both Parties, which document shall also specify the applicability of the previous and/or amended definitions in the context of particular (or all) references to the Compound Assay in this Agreement.

(b) Costs. Except as otherwise expressly provided in this Agreement, or agreed to by the Parties in writing, each Party shall be responsible for any costs it incurs in performing activities under this Agreement.

3.3 Genentech’s Rights and Responsibilities.

(a) Research, Development and Commercialization. As between the Parties, Genentech has the sole right and responsibility, under this Agreement, with respect to performing research, development and commercialization activities related to Compounds, Licensed Products and Companion Diagnostics (exclusively licensed to Genentech under the License To Genentech) in the Field in the Territory.

(b) Manufacturing. Except for materials transferred under Section 2.2, as between the Parties, Genentech has the sole right and responsibility, under this Agreement, with respect to manufacturing Compounds, Licensed Products and Companion Diagnostics (exclusively licensed to Genentech under the License To Genentech) for use or sale in the Field in the Territory.

(c) Diligence. Genentech shall use Commercially Reasonable Efforts to develop and commercialize at least one (1) Licensed Product, including exploring the full potential of such Licensed Product. Activities performed by Sublicensees shall be considered activities performed by Genentech under this Agreement for purposes of determining whether Genentech is fulfilling its diligence obligations under this Section 3.3(c).

(d) Annual Development Report; Updates. Until the First Commercial Sale of any Licensed Product in the Territory, prior to each anniversary of the Effective Date, Genentech shall provide to Array’s Alliance Manager a written summary of Genentech’s

- 12 -

EXHIBIT 10.57

pre-clinical and clinical progress on the development of Licensed Products (“ Annual Development Report ”). In addition to the Annual Development Report and notices of the achievement of Milestone Events under Section 5.2(d), until the First Commercial Sale of any Licensed Product in the Territory, Genentech shall inform (including by email or orally) Array’s Alliance Manager of the completion of any clinical trial with a Licensed Product conducted by or on behalf of Genentech (or a Sublicensee). All information in Annual Development Reports is for informational purposes only. Annual Development Reports and other information provided under this Section 3.3(d) are Genentech’s Confidential Information.

3.4 Array’s Rights and Responsibilities.

(a) IND Assistance. Array shall assist Genentech in drafting an IND for a Licensed Product that contains ARRY-575 as reasonably requested by Genentech.

(b) Termination of Certain Third Party Agreements. Array is a party to the following agreements with Third Parties, and agrees to terminate such agreements as soon as possible under the terms thereof, by taking all necessary actions to do so within ten (10) days after the Effective Date: (i) “Materials Transfer Agreement” with Baylor College of Medicine, effective March 25, 2011; (ii) “Materials Transfer Agreement” with The Ohio State University, effective July 29, 2010; and (iii) “Materials Transfer Agreement” with The Regents of the University of Colorado for and on behalf of the University of Colorado Denver, Anschutz Medical Campus, effective April 20, 2011.

(c) Exclusivity. The provisions of this Section 3.4(c), including activities by Array and by Array Controlled Affiliates, are referred to as Array’s “ Exclusivity Obligations .” Neither Array nor Array Controlled Affiliates, either alone or with a Third Party, shall (i) conduct, participate in, or fund, directly or indirectly, research or development for the purpose of discovering or developing compounds that Satisfy the Compound Criteria or (ii) commercialize a product that contains a compound that Satisfies the Compound Criteria or (iii) assign or otherwise transfer ownership of a compound(s) (and related intellectual property rights) that are known to Array to Satisfy the Compound Criteria to any Third Party in any manner that reduces the scope of the License To Genentech or would prevent the inclusion of such compound(s) in the definition of Compound under Section 1.20(b)(i). The Parties agree that it shall not be a breach of Array’s Exclusivity Obligations for Array or its Affiliates to license, transfer or otherwise convey rights to Third Parties with respect to compounds that (i) do not Satisfy the Compound Criteria or (ii) prior to the Effective Date, were not known to Array to Satisfy the Compound Criteria. For clarity, it shall not be a breach of Array’s Exclusivity Obligations if Array (or it Affiliates) provides to a Third Party a license or other right to make, use, offer for sale, sell or import compounds that do not Satisfy the Compound Criteria and such Third Party, under such license or other right from Array, makes uses, offers for sale, sells or

- 13 -

EXHIBIT 10.57

imports compounds that Satisfy the Compound Criteria. Notwithstanding anything to the contrary in this Section 3.4(c), Array has the right to sell, license or otherwise provide to Third Parties libraries of compounds, provided that Array removes from such library any compound that (i) is listed on Exhibit C or (ii) at the time Array provides such library to such Third Party, Array knows Satisfies the Compound Criteria.

3.5 Genentech Option for Array to Perform CMC Activities. During the period from the Effective Date until the third anniversary of the Effective Date (for purposes of this Section 3.5, “ CMC Option Period ”), Genentech shall have an option to have Array perform CMC-related activities during the CMC Option Period with respect to Compounds and/or Licensed Products, upon terms and conditions to be agreed to by the Parties. Genentech may exercise such option by providing written notice to Array at any time during the CMC Option Period. In the event that Genentech exercises such option, the Parties shall negotiate in good faith to define the activities to be performed by Array during the remainder of the CMC Option Period, together with the terms and conditions on which Array shall perform such activities, but in no event is it intended that Array would staff such activities with more than [ * ] FTEs at any given time.

Article 4
Licenses

4.1 License To Genentech.

(a) Array Existing IP (Compounds and Licensed Products). Array hereby grants to Genentech a royalty-bearing, exclusive (even as to Array), sublicensable (in accordance with Section 4.1(d)) license, under the Array Existing IP, to make, use, offer for sale, sell and import Compounds and Licensed Products in the Field in the Territory.

(b) Array Future IP (Compounds). Array hereby grants to Genentech a royalty-bearing, exclusive (even as to Array), sublicensable (in accordance with Section 4.1(d)) license, under the Array Future IP, to make, use, offer for sale, sell and import Compounds in the Field in the Territory.

(c) Array Companion Diagnostic IP (Companion Diagnostics). Array hereby grants to Genentech a sublicensable (in accordance with Section 4.1(d)) license, under the Array Companion Diagnostic IP, to make, use, offer for sale, sell and import Companion Diagnostics in the Territory, where such Companion Diagnostics are intended for use in connection with determining whether to prescribe or administer a particular compound that Satisfies the Compound Criteria to a patient or subject, which license shall be (i) exclusive (even

- 14 -

EXHIBIT 10.57

as to Array) with respect to Companion Diagnostics For Target and (ii) non-exclusive with respect to Companion Diagnostics For Disease.

(d) Sublicenses; Exercise of Licensed Rights by Third Parties. Genentech may sublicense the rights granted under the License To Genentech, and any such sublicense may be further sublicensed to multiple tiers of sublicensees. Further, the rights granted to Genentech (or a sublicensee) under the License To Genentech may be exercised by a Third Party on behalf of Genentech (or a sublicensee) without the grant of a sublicense of such rights; any activities conducted by a Third Party on behalf of Genentech (or a sublicensee) shall be deemed to be conducted by Genentech (or such sublicensee).

4.2 Maintenance of Intellectual Property.

(a) Generally. Array shall not license (except to Genentech pursuant to the licenses granted under this Agreement), assign, dispose of, encumber or otherwise impair any portion of its interest in the Array IP.

(b) Review and Inclusion of Third Party IP. In the event that Array enters into a Third Party License Agreement on or after the Effective Date that, to the knowledge of Array at the time (in light of information that Genentech has then provided to Array regarding Genentech’s then-current activities with respect to Compounds, Licensed Products and Companion Diagnostics), includes Array Future IP or Array Companion Diagnostic IP, Array shall provide to Genentech a copy of such Third Party License Agreement, within thirty (30) days of execution of such agreement. Array may redact such copies to the extent not relevant to Genentech’s review thereof for purposes of evaluating if Genentech elects to include the applicable Third Party IP in the Array Future IP (in accordance with Section 4.2(b)(i)) or the Array Companion Diagnostic IP (in accordance with Section 4.2(b)(ii)) and/or to the extent required by Array’s obligations of confidentiality under such Third Party License Agreement.

(i) If Genentech elects to include any given Third Party IP in the Array Future IP, such inclusion shall be automatically effective upon Array’s receipt of notice from Genentech of such election, subject to any requirements under the applicable Third Party License Agreement to perfect the grant of a sublicense to Genentech under such Third Party IP (which requirements, by way of example and not limitation, may potentially include notice to the applicable Third Party, providing a redacted or unredacted copy of this Agreement to the applicable Third Party, written agreement by Genentech to comply with certain terms of the applicable Third Party License Agreement, in each case, as may be required in connection with the applicable Third Party License Agreement), which requirements the Parties shall promptly fulfill

- 15 -

EXHIBIT 10.57

(ii) If Genentech elects to include any given Third Party IP in the Array Companion Diagnostic IP, such inclusion shall be subject to the provisions of this Section 4.2(b)(ii). Genentech has the right to elect to include Third Party IP in the Array Companion Diagnostic IP only if such Third Party IP is Controlled by Array by virtue of an exclusive license granted to Array in a Third Party License Agreement entered into on or after the Effective Date, subject to reasonable terms and conditions to be agreed to by the Parties. If Array exercises an option under an agreement with a Third Party that Array entered into prior to the Effective Date, and a license is granted to Array under a Third Party License Agreement as a result of the exercise of such option, such Third Party License Agreement shall be deemed to have been entered into prior to the Effective Date for purposes of this Agreement.

(c) Maintenance of Third Party IP. The provisions of this Section 4.2(c) apply to any Third Party IP included in the Array IP or the Array Companion Diagnostic IP and to the applicable Third Party License Agreement. Array shall be responsible for all payment obligations under each Third Party License Agreement entered into prior to the Effective Date, even if such obligations arise as a result of Genentech’s (or a Sublicensee’s) activities under this Agreement. Genentech shall be responsible for all payment obligations under each Third Party License Agreement entered into on or after the Effective Date, if and to the extent such payment obligations arise as a result of Genentech’s (or a Sublicensee’s) activities under this Agreement; any payments actually paid to fulfill such obligations shall, if applicable under Section 5.3(d)(ii), be included in Third Party Payments. Array shall not (i) commit any acts or omissions that could cause a material breach of a Third Party License Agreement or could otherwise result in a liability for or a loss of rights by Genentech under such Third Party License Agreement; (ii) amend or terminate a Third Party License Agreement; or (iii) exercise or waive any rights it may have under a Third Party License Agreement, in each of the foregoing cases (i) through (iii), in any way that could adversely affect the License To Genentech (including any sublicenses granted thereunder) or impose additional obligations on Genentech. Array IP and Array Companion Diagnostic IP shall only include Third Party IP to the extent Genentech (i) does not commit any acts or omissions that could cause a material breach of the Third Party License Agreement or could otherwise result in a liability for or a loss of rights by Array under the Third Party License Agreement and (ii) complies with the all relevant provisions of the Third Party License Agreement.

(d) Notice of Adverse Events. Array shall notify Genentech within ten (10) Business Days after Array first learns of any circumstances that could adversely affect the License To Genentech, including by receiving notice of an alleged breach of a Third Party License Agreement.

4.3 No Implied Licenses. Except as otherwise expressly provided in this Agreement, this Agreement does not grant any right or license to either Party under any of the other Party’s

- 16 -

EXHIBIT 10.57

intellectual property rights, and no other right or license is to be implied or inferred from any provision of this Agreement or by the conduct of the Parties.

Article 5
Payments by Genentech to Array

5.1 Upfront Payment. Within thirty (30) days after the Effective Date, Genentech shall pay to Array a one-time, upfront payment of twenty-eight million U.S. dollars (U.S. $28,000,000) (“ Upfront Payment ”).

5.2 Milestones.

(a) Milestone Payments. Genentech shall owe milestone payments to Array for (i) the [ * ] achievement of Milestone Events [ * ] and (ii) the [ * ] achievement of Milestone Events [ * ] for [ * ] Licensed Product, but only for [ * ] Licensed Products, in the case of all Milestone Events, by or on behalf of Genentech (or a Sublicensee) as set forth in Section 5.2 (each such payment, a “ Milestone Payment ”). For clarity, (i) Milestone Payments [ * ] will be owed (at most) [ * ] and (ii) Milestone Payments [ * ] will be owed (at most) [ * ] for any given Licensed Product and (at most) [ * ] , even if there are [ * ] Licensed Products under this Agreement.

(b) Definitions. The following capitalized terms are used solely for purposes of the Milestone Table:

(i) “ Dosed ” with a Licensed Product means the first administration to a patient in a given clinical trial of (A) such Licensed Product; (B) another active pharmaceutical ingredient for the treatment of the same indication as such Licensed Product; or (C) a placebo for such Licensed Product.

(ii) “ Regulatory Approval ” means all approvals, licenses, registrations or authorizations of any federal, state or local regulatory agency, department, bureau or other governmental entity, necessary for the use and/or sale of a particular Licensed Product for treatment of humans in a country or regulatory jurisdiction. For countries where governmental approval is required for pricing or reimbursement for a Licensed Product, “Regulatory Approval” shall not be deemed to occur until such pricing or reimbursement approval is obtained; provided, however, if Genentech has not accepted the pricing offered by the governmental authority of a particular country within [ * ] after the date the first Regulatory Approval application is approved in such country, Regulatory Approval shall be deemed to have occurred in such country.

- 17 -

EXHIBIT 10.57

(iii) “ Treatment Regimen ” means administration of a Licensed Product as a single agent, or in combination with one or more approved pharmacological, anti-tumor agents, in each case, regardless of dosing, formulation and route of administration. For purposes of Milestone Events [ * ] , the Treatment Regimen used in the (subsequent) clinical trial/approval differs from the Treatment Regimen used in the (prior) clinical trial/approval, if (A) at least one chemotherapy agent used in the Treatment Regimen in such (subsequent) clinical trial/approval acts through a different mechanism of action than each and every one of the chemotherapy agents used in the Treatment Regimen in such (prior) clinical trial/approval or (B) the Licensed Product is used/approved as a single agent in such (subsequent) clinical trial/approval or was so used/approved in such (prior) clinical trial/approval, but not in both. By way of example, but not limitation, [ * ] and [ * ] act through the same mechanism of action, whereas [ * ] and [ * ] act through different mechanisms of action.

(c) Milestone Table.

Milestone Event	Milestone Amount (in U.S. dollars)
*(#1) [ ]**	$ *[ ]**
(#2) *[ ]**	*$[ ]**
*(#3) [ ]**	*$[ ]**
*(#4) [ ]**	*$[ ]**
*(#5) [ ]**	*$[ ]**

- 18 -

EXHIBIT 10.57

Milestone Event	Milestone Amount (in U.S. dollars)
*(#6) [ ]**	*$[ ]**
*(#7) [ ]**	*$[ ]**
*(#8) [ ]**	*$[ ]**
*(#9) [ ]**	*$[ ]**
*(#10) [ ]**	*$[ ]**
*(#11) [ ]**	*$[ ]**
*(#12) [ ]**	*$[ ]**
*(#13) [ ]**	*$[ ]**

(d) Notices and Invoices for Milestone Payments. Promptly, but in no event later than [ * ] , after the achievement of a Milestone Event for which Genentech owes a

- 19 -

EXHIBIT 10.57

Milestone Payment, Genentech (or a Sublicensee) shall provide written notice (including by email) to Array’s Chief Financial Officer (or such other Array representative as Array may designate, at any time, upon prior written notice (including by email) to Genentech’s Alliance Manager) of such achievement. Genentech (or a Sublicensee) shall make Milestone Payments in accordance with Section 5.2 and Section 6.3. Array shall send invoices to Genentech for Milestone Payments after Array’s receipt of a notice under this Section 5.2(d) regarding the achievement of a Milestone Event. Each invoice shall identify the trigger for the payment obligation and, unless otherwise requested by Genentech in writing, Array shall send invoices to Genentech at the address for GNE in the preamble of this Agreement, to the attention of Finance Manager, Business Development, M/S 53.

5.3 Royalties.

(a) Royalty Rates. Genentech shall pay to Array royalties as a percentage of Net Sales of Licensed Products in the Territory (each payment under this Section 5.3(a), a “ Royalty Payment ”). Genentech (or a Sublicensee) shall make Royalty Payments, on a Licensed Product-by-Licensed Product and country-by-country basis, in accordance with Section 6.3, based on the following royalty rates (each, a “ Royalty Rate ”) for the applicable Royalty Term, subject to Royalty Adjustments and the other provisions of Section 5.3 and this Agreement:

(i) [ * ] percent ( [ * ] %) of Net Sales of a given Licensed Product during that portion of the calendar year in which the worldwide Net Sales of such Licensed Product are less than or equal to U.S. $ [ * ] ; and

(ii) [ * ] percent ( [ * ] %) of Net Sales of a given Licensed Product during that portion of the calendar year in which the worldwide Net Sales of such Licensed Product are greater than U.S. $ [ * ] .

(b) Royalty Term. Genentech’s obligation to make Royalty Payments (with respect to a given Licensed Product in a particular country, the “ Royalty Term ”) shall begin on the date of the First Commercial Sale of such Licensed Product in such country and continue at the then-applicable Royalty Rate for the calendar year, for a period of [ * ] years from the date of the First Commercial Sale of such Licensed Product in such country.

(c) Fully Paid Licenses. Upon the expiration of the Royalty Term for a given Licensed Product in a particular country, the License To Genentech with respect to such Licensed Product (and the Compound(s) contained therein and associated Companion Diagnostics) in such country shall become fully paid and irrevocable.

- 20 -

EXHIBIT 10.57

(d) Royalty Adjustments. Reductions of Royalty Rates and deductions from Royalty Payments made under this Section 5.3(d) are referred to collectively as “ Royalty Adjustments .” Subject to the last clause of Section 5.3(d)(ii), each of the following royalty adjustment mechanisms shall operate independently, and either or both may apply to a given Licensed Product in a particular country if a Royalty Payment is owed with respect to such Licensed Product in such country:

(i) if (A) one or more Third Parties (other than a Genentech Affiliate), without a license from Genentech (or a Sublicensee), sells a product that contains a compound that is the same as a Compound contained in a given Licensed Product sold by Genentech (or a Sublicensee) in a particular country (for purposes of this Section 5.3(d)(i), each such product, a “ Generic Competitor ”) and (B) the quarterly Net Sales of such Licensed Product in such country decrease to less than [ * ] of the Net Sales of such Licensed Product in such country in the calendar quarter prior to the first commercial sale of the first Generic Competitor in such country (for purposes of this Section 5.3(d)(i), the “ Generic Threshold Net Sales ”), the Royalty Rate for such Licensed Product in such country shall be reduced to [ * ] for as long as quarterly Net Sales of such Licensed Product in such country are less than the Generic Threshold Net Sales (and a Royalty Payment is otherwise owed to Array); and

(ii) if it is necessary for Genentech (or a Sublicensee) to obtain any licenses or other rights under intellectual property owned or controlled by Third Party(ies) (other than a Genentech Affiliate) in order to make, use, offer for sale, sell or import a given Licensed Product in a particular country, Genentech (or a Sublicensee) shall have the right to deduct from the Royalty Payments owed for such Licensed Product in a such country [ * ] of any payments actually paid (using a true-up mechanism to be agreed to by the Parties’ respective finance representatives) by Genentech (or its Sublicensees) to such Third Party(ies) for such licenses and rights (“ Third Party Payments ”); provided, however, in no event shall a given Royalty Payment (A) be less than [ * ] of what would otherwise be owed (but for such deduction) or (B) result in an effective royalty rate of less than [ * ] of Net Sales.

(e) Single Royalty Payment. In no event shall Genentech (or a Sublicensee) be obligated to make more than one Royalty Payment with respect to the sale of a given Licensed Product, even if such Licensed Product contains more than one Compound.

(f) Negotiated Royalties and Other Financials. The Parties considered various structures for the financial provisions of this Agreement, and agree that the Royalty Rates, Royalty Terms, Royalty Adjustments and other financial provisions of this Agreement (which are not based on particular patents or know-how of the Parties, but on the total contributions of the Parties hereunder), represent fair and reasonable consideration for the rights and obligations of the Parties hereunder.

- 21 -

EXHIBIT 10.57

Article 6
Financial Reports, Audits and Other Financial Provisions

6.1 Calculation of Net Sales.

(a) General. The determination of Sales and Net Sales (including deductions and adjustments used to calculate such amounts) shall, in all cases, be determined in accordance with the applicable Accounting Standard.

(b) Definition of Sales. “ Sales ” of a Licensed Product means, in a given period, the amounts stated in the “Sales” line (or its equivalent, regardless of description) of Genentech’s (or a Sublicensees’) (externally published, if applicable) audited financial statements with respect to such Licensed Product for such period (or, if audited financial statements are not prepared for such period, the corresponding amount as reasonably determined for unaudited financial statements for such period, which amounts, and associated royalties and reports, shall be reconciled with an audited financial statement at such time as an audited financial statement for a period covering such period is prepared). This amount reflects the gross invoice price at which such Licensed Product was sold or otherwise disposed of (other than for use as clinical supplies or free samples) by Genentech and Sublicensees to Third Parties (other than Affiliates and Sublicensees) in such period, reduced by gross-to-net deductions, if not previously deducted from such invoiced amount. For the avoidance of doubt, in the event that a reserve amount, accrual or other amount is deducted in determining Sales for a given period and then subsequently adjusted in a later period in a manner that would have increased Sales if the adjustment had been made in the applicable period, incremental royalties on the resulting increase will be due when such adjustment is made.

(c) Definition of Net Sales. “ Net Sales ” of a Licensed Product means, in a given period, the amount calculated by deducting from the Sales of such Licensed Product for such period the following deductions (individually and collectively, “ Sales Deductions ”): (x) a lump sum deduction of four percent (4%) of Sales in lieu of those deductions that are not accounted for within Genentech (or its Sublicensees) on a Licensed Product-by-Licensed Product basis (e.g., freight, postage charges, transportation insurance, packing materials for dispatch of goods, custom duties); (y) uncollectible amounts and credit card charges (including processing fees) accrued during such period on such Sales and not already taken as a gross-to-net deduction in accordance with the Accounting Standard in the calculation of Sales of such Licensed Product for such period; and (z) government mandated fees and taxes and other government charges accrued during such period on such Sales not already taken as a gross-to-net deduction in accordance with the Accounting Standard in the calculation of Sales of such Licensed Product for such period, including, for example, any fees, taxes or other charges that become due in connection with any healthcare reform, change in government pricing or discounting schemes, or

- 22 -

EXHIBIT 10.57

other action of a government or regulatory body. By way of example, and not limitation, the following items may be deducted only if, and to the extent, such items are part of Genentech’s (or its Sublicensees’) gross-to-net deductions taken in determining the “Sales” line of its audited financial statements as described in Section 6.1(b):

(i) credits, reserves or allowances granted for (A) damaged, outdated, returned, rejected, withdrawn or recalled Licensed Product; (B) wastage replacement and short-shipments; (C) billing errors; and (D) indigent patient and similar programs (e.g., price capitation);

(ii) governmental price reductions and government mandated rebates;

(iii) chargebacks, including those granted to wholesalers, buying groups and retailers;

(iv) customer rebates, including cash sales incentives for prompt payment, cash and volume discounts; and

(v) taxes, duties and any other governmental charges or levies imposed upon or measured by the import, export, use, manufacture or sale of a Licensed Product (excluding income or franchise taxes).

(d) Sales Among Affiliates and Sublicensees. Sales between or among Genentech, its Affiliates and/or their respective Sublicensees shall be excluded from the computation of Sales, but Sales shall include the first sales to Third Parties by any such Affiliates or Sublicensees.

(e) Supply as Samples/Test Materials. Notwithstanding anything to the contrary in the definition of Sales or Net Sales, the supply or other disposition of Licensed Products (i) as samples; (ii) for use in non-clinical or clinical studies; (iii) for use in any tests or studies reasonably necessary to comply with any applicable law, regulation or request by a regulatory or governmental authority; or (iv) as is otherwise reasonable and customary in the industry to supply or dispose of without payment, in each case, shall be excluded from the computation of Sales or Net Sales.

(f) Licensed Products Sold in Combinations.

(i) In the event that a Licensed Product is sold in combination (in the same package, including as a co-formulation, or otherwise sold together for a single price) with one or more other active ingredients that are not the subject of this Agreement (for purposes of this Section 6.1(f), a “ Combination ”), the Sales for such Licensed Product shall be calculated by multiplying the Sales for such Combination by the fraction A/(A+B), where “A” is the unit Sales

- 23 -

EXHIBIT 10.57

for such Licensed Product sold separately and “B” is the unit Sales for such other active ingredient(s) sold separately, in each case in comparable doses.

(ii) In the event that such other active ingredient(s) are not sold separately (but such Licensed Product is), the Sales for such Licensed Product shall be calculated by multiplying the Sales for such Combination by the fraction A/C, where “A” is the unit Sales for such Licensed Product, and “C” is the unit Sales for the Combination, in each case in comparable doses.

(iii) In the event that such Licensed Product is not sold separately, Net Sales for royalty calculations shall be determined based on an apportionment to reflect the relative value of such Licensed Product and the one or more other active ingredients in such Combination, as agreed by the Parties (and, if the Parties do not reach an agreement on such apportionment, the Dispute shall be resolved in accordance with the Dispute Resolution Provisions.

6.2 Royalty Reports. With each Royalty Payment, Genentech shall provide to Array, on a Licensed Product-by-Licensed Product basis, the following information for the applicable calendar (“ Royalty Report ”):

(a) Sales in Swiss Francs (“ CHF ”), on a country-by-country basis;

(b) adjustments in CHF made to Sales, on a country-by-country basis, to account for Licensed Products sold in a Combination, as defined in and pursuant to Section 6.1(f);

(c) each Sales Deduction to calculate Net Sales, pursuant to the definition of Net Sales;

(d) Net Sales in CHF, on a country-by-country basis;

(e) the applicable Royalty Rate(s), on a country-by-country basis, including any adjustment to account for Generic Competitors, as defined in and pursuant to Section 5.3(d)(i);

(f) deductions from Royalty Payments in CHF, on a country-by-country basis, to account for Third Party Payments;

(g) total Net Sales in the Territory, in CHF;

(h) total Net Sales in the Territory, in U.S. dollars (“ USD ”);

(i) total Royalty Payment, payable in USD; and

- 24 -

EXHIBIT 10.57

(j) exchange rate used to convert Net Sales from CHF to USD, pursuant to Section 6.3(c) (which shall be the same exchange rate used to convert USD to CHF, in the event any amounts have been converted from USD to CHF in determining Sales or Net Sales for the applicable period).

6.3 Payment Related Provisions.

(a) Timing of Payments. Milestone Payments shall be due within thirty (30) days of Genentech’s receipt of an invoice for such payment. Royalty Payments shall be due, on a calendar quarterly basis, ninety (90) days after the end of any calendar quarter for which Genentech has an obligation to make Royalty Payments.

(b) Mode of Payment. All payments under this Agreement shall be made in immediately available funds by wire transfer to a United States based account to be identified by the payee.

(c) Currency of Payments. All payments under this Agreement shall be made in U.S. dollars, unless otherwise expressly provided in this Agreement. Net Sales outside of the United States shall be first determined in the currency in which they are earned and shall then be converted into an amount in U.S. dollars as follows: (i) with respect to sales by or on behalf of Genentech, using Genentech’s customary and usual conversion procedures, consistently applied and (ii) with respect to sales by or on behalf of a given Sublicensee, using the conversion procedures applicable to payments by such Sublicensee to Genentech for such sales.

(d) Blocked Currency. If, at any time, legal restrictions prevent Genentech (or a Sublicensee) from remitting part or all of Royalty Payments when due with respect to any country in the Territory where Licensed Products are sold, Genentech shall continue to provide Royalty Reports for such Royalty Payments, and such Royalty Payments shall continue to accrue in such country, but Genentech shall not be obligated to make such Royalty Payments until such time as payment may be made through reasonable, lawful means or methods that may be available, as Genentech shall determine.

(e) Taxes. Each Party shall comply with applicable laws and regulations regarding filing and reporting for income tax purposes. Neither Party shall treat their relationship under this Agreement as a pass through entity for tax purposes. All payments made under this Agreement shall be free and clear of any and all taxes, duties, levies, fees or other charges, except for withholding taxes. Each Party shall be entitled to deduct from its payments to the other Party under this Agreement the amount of any withholding taxes required to be withheld, to the extent paid to the appropriate governmental authority on behalf of the other

- 25 -

EXHIBIT 10.57

Party (and not refunded or reimbursed). Each Party shall deliver to the other Party, upon request, proof of payment of all such withholding taxes. Each Party shall provide reasonable assistance to the other Party in seeking any benefits available to such Party with respect to government tax withholdings by any relevant law, regulation or double tax treaty.

6.4 Records, Audits and Other Financial Provisions.

(a) Records. Genentech shall keep complete and accurate records for a period of at least two (2) years for each reporting period during which Royalty Payments are due, showing sales of Licensed Products and applicable deductions in sufficient detail to enable Royalty Reports to be verified.

(b) Audits. Array shall have the right to request that Royalty Reports it receives be verified by an independent and internationally recognized certified public accounting firm (for purposes of Section 6.4, the “ CPA Firm ”) selected by Array (for purposes of Section 6.4, the “ Auditing Party ”) and acceptable to Genentech (for purposes of Section 6.4, the “ Audited Party ”), such acceptance not to be unreasonably withheld. The foregoing audit right shall not be exercised more than once in any calendar year or more frequently than once with respect to records covering any specific period of time; provided, however, in the event of a Dispute between the Parties with respect to payments under this Agreement, such limitations on the audit right shall not be construed as a limitation on discovery that would be otherwise available to the Auditing Party in connection with such Dispute, which shall be resolved in accordance with the Dispute Resolution Provisions. Subject to Section 6.4(c), the Audited Party shall, upon reasonable advance notice and at a mutually agreeable time during its regular business hours, make its records available for audit by the CPA Firm at such place or places where such records are customarily kept, solely for the purpose of verifying the accuracy of the reports being verified and the related payments due under this Agreement.

(c) Confidentiality. Prior to any audit under Section 6.4(b), the CPA Firm shall enter into a written confidentiality agreement with the Audited Party that (i) limits the CPA Firm’s use of the Audited Party’s records to the verification purpose described in Section 6.4(b); (ii) limits the information that the CPA Firm may disclose to the Auditing Party to whether the payments made accurately reflect the payments due under this Agreement and, if there is a discrepancy, the amount of such discrepancy; and (iii) prohibits the disclosure of any information contained in such records to any Third Party for any purpose. The Parties agree that all information subject to review under Section 6.4(b) and/or provided by the CPA Firm to the Auditing Party is the Audited Party’s Confidential Information, and the Auditing Party shall not use any such information for any purpose that is not germane to Section 6.4.

- 26 -

EXHIBIT 10.57

(d) Underpayment/Overpayment; Payment for Audit. After reviewing the CPA Firm’s audit report, Genentech shall promptly pay any uncontested, understated amounts due to Array. Any overpayment made by Genentech shall be promptly refunded or fully creditable against amounts payable in subsequent payment periods, at Array’s election. Any audit under Section 6.4(b) shall be at Array’s expense; provided, however, Genentech shall reimburse reasonable audit fees for a given audit if (i) the results of such audit reveal that Genentech underpaid Royalty Payments by [ * ] or more for the audited period and (ii) such audited period includes [ * ] .

Article 7
Intellectual Property

7.1 Disclosures of IP. During the term of the Agreement, Array shall promptly disclose to Genentech all Patents and Know-How within the Array IP (including any that becomes Owned or Controlled by Array after the Effective Date) that are within the scope of the licenses granted to Genentech under this Agreement.

7.2 Patent Prosecution and Maintenance.

(a) Definitions. The following definitions are for purposes of Section 7.2:

(i) “ Prosecution and Maintenance, ” “ Prosecute and Maintain ” or the like, with regard to a given Patent, means the preparation, filing, prosecution and maintenance of such Patent, as well as re-examinations, reissues, applications for patent term extensions and the like with respect to such Patent, together with the conduct of interferences, the defense of oppositions and other similar proceedings with respect to such Patent.

(ii) “ Outside Patent Counsel ” means outside patent counsel agreed to by Genentech and Array.

(b) Exclusive Array IP. Subject to Section 7.5, the provisions of this Section 7.2(b) shall apply to the Prosecution and Maintenance of any Patent (y) within the Array IP, to the extent such Patent contains a claim the entire scope of which is exclusively licensed to Genentech or (z) listed on Exhibit E. Any such Patent is referred to as a “ Jointly Prosecuted and Maintained Patent .”

(i) Prosecution and Maintenance. Genentech and Array shall jointly decide on a strategy for the Prosecution and Maintenance of any Jointly Prosecuted and Maintained Patent, including deciding on (A) the content of the application; (B) the countries in which Prosecution and Maintenance should be conducted; and (C) whether to retain Outside

- 27 -

EXHIBIT 10.57

Patent Counsel to conduct all or particular Prosecution and Maintenance activities (e.g., to prosecute a Patent application, but not to draft, file or maintain it). Notwithstanding anything to the contrary, in the event that Genentech and Array disagree about retaining Outside Patent Counsel for all or particular activities, Outside Patent Counsel shall be retained for such activities.

(ii) Cooperation. Each Party shall cooperate with and assist the other Party in the Prosecution and Maintenance of any Jointly Prosecuted and Maintained Patent, including (A) consulting with the other Party after receiving any substantial action or development in the Prosecution and Maintenance of such Patent and (B) making its relevant scientists and scientific records reasonably available. In addition, each Party shall sign and deliver, or use reasonable efforts to have signed and delivered, at no charge to the other Party, all documents necessary in connection with such Prosecution and Maintenance.

(iii) Instructions to Outside Patent Counsel. With respect to any Jointly Prosecuted and Maintained Patent, the Outside Patent Counsel (if any) shall be instructed to (A) keep the Parties informed regarding the Prosecution and Maintenance thereof; (B) promptly furnish to each Party a copy of such Patent and copies of documents relevant to such Prosecution and Maintenance, including copies of correspondence with any patent office, foreign associates and outside counsel; and (C) act on the Parties’ instructions relating to such Prosecution and Maintenance.

(iv) Costs. [ * ] Jointly Prosecuted and Maintained Patent (e.g., filing and maintenance fees or the cost of Outside Patent Counsel). Subject to the foregoing, each Party shall be responsible for any costs it incurs in performing activities related to such Prosecution and Maintenance.

(v) Dispute Resolution. With respect to decisions related to the Prosecution and Maintenance of Jointly Prosecuted and Maintained Patents, Genentech and Array shall attempt to make decisions by reaching agreement. If Genentech and Array cannot reach agreement, the Dispute shall be referred to Genentech’s and Array’s executives for resolution in accordance with Section 14.1. If the executives cannot resolve such Dispute, then, notwithstanding the arbitration provisions of Section 14.2, Genentech shall have final decision making authority; provided, however, Genentech shall incorporate all reasonable instructions of Array with respect to claims contained in any Jointly Prosecuted and Maintained Patent that do not cover subject matter included within the License to Genentech. Notwithstanding the foregoing, Genentech shall have no obligation to incorporate such instructions of Array that could adversely affect claims contained in any Jointly Prosecuted and Maintained Patent that do cover subject matter included within the License to Genentech. Notwithstanding the foregoing Dispute resolution process, if, in order to preserve rights in, or the scope of, any Jointly Prosecuted and Maintained Patent, action is required in a time frame that does not reasonably

- 28 -

EXHIBIT 10.57

permit resolution using the process described above in this Section 7.2(b)(v), Genentech shall make the final decision without referring the Dispute to the executives; provided, however, if reasonably possible, Genentech shall consult with Array prior to making any such final decision.

7.3 Patent Interferences. Subject to Section 7.5, if an interference is declared by the U.S. Patent and Trademark Office between (a) a claim in one or more Patents within the Array IP and (b) a claim in one or more Patents within the Genentech IP, the Parties shall in good faith establish within thirty (30) days of the declaration of such interference, or such other time as agreed upon, a mutually agreeable process to resolve such interference in a reasonable manner (including control and costs thereof), in conformance with all applicable legal standards.

7.4 CREATE Act. It is the intention of the Parties that this Agreement is a “joint research agreement” as that phrase is defined in 35 USC § 103(c)(3). In the event that either Party to this Agreement intends to overcome a rejection of a claimed invention within the Array IP or the Genentech IP pursuant to the provisions of 35 USC § 103(c)(2), such Party shall first obtain the prior written consent of the other Party. Following receipt of such written consent, such Party shall limit any amendment to the specification or statement to the patent office with respect to this Agreement to that which is strictly required by 35 USC § 103(c) and the rules and regulations promulgated thereunder and which is consistent with the terms and conditions of this Agreement (including the scope of the Research Program). To the extent that the Parties agree that, in order to overcome a rejection of such a claimed invention pursuant to the provisions of 35 USC § 103(c)(2), the filing of a terminal disclaimer is required or advisable, the Parties shall first agree on terms and conditions under which the patent application subject to such terminal disclaimer and the patent or application over which such application is disclaimed shall be jointly enforced, to the extent that the Parties have not previously agreed to such terms and conditions. In the event that Genentech enters into an agreement with a Third Party with respect to the further research, development or commercialization of a Compound, Licensed Product or Companion Diagnostic (exclusively licensed to Genentech under the License To Genentech), Array shall, upon Genentech’s request, similarly enter into such agreement with such Third Party for the purposes of furthering the Parties’ objectives under this Agreement, provided that such agreement does not place any material obligation on Array. The provisions of this Section 7.4 are subject to Section 7.5.

7.5 Limitation on Rights and Obligations With Respect to IP. When this Section 7.5 is referenced with respect to the rights or obligations of the Parties under this Agreement related to Patents that are Third Party IP, such rights and obligations with respect to such Patents are subject to any limitations, restrictions, necessary consents or actions by a Third Party and other provisions of the applicable Third Party License Agreement.

- 29 -

EXHIBIT 10.57

7.6 Bankruptcy Matters.

(a) Retention of Rights. All rights and licenses granted under or pursuant to this Agreement by Array to Genentech are, and shall otherwise be deemed to be, for purposes of paragraph 365(n) of the Bankruptcy Code, licenses of rights to “intellectual property” as defined under paragraph 101(35A) of the Bankruptcy Code. The Parties agree that Genentech, as a licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code. The Parties further agree that in the event of the commencement of a bankruptcy proceeding by or against Array, including under the Bankruptcy Code, Genentech shall be entitled to complete access to any such intellectual property of Array that pertains to the rights granted in the licenses under this Agreement and all embodiments of such intellectual property.

(b) Patent Prosecution. Genentech acknowledges that certain Array IP may contain subject matter that is not exclusively licensed to Genentech. The Parties agree that, in the event of the commencement of a bankruptcy proceeding by or against Array under the Bankruptcy Code, to the extent consistent with the Bankruptcy Code and Array’s existing obligations to Third Parties, and to the extent permitted by Array’s trustee, subject to Section 7.5, Genentech shall have the right to Prosecute and Maintain (as defined in Section 7.2(a)) the Jointly Prosecuted and Maintained Patents.

Article 8
Enforcement and Defense of IP; Defense of Third Party Infringement Claims

8.1 Notice. With respect to intellectual property that is within the scope of the License To Genentech, each Party shall promptly notify the other Party upon learning of any (a) actual or suspected infringement or misappropriation (collectively, an “ Infringement ”) by a Third Party of (i) the Array IP or (ii) other Patents Controlled by Array or by an Array Included Affiliate that claim a compound that Satisfies the Compound Criteria or (b) claim by a Third Party of invalidity, unenforceability or non-infringement of a Patent within the Array IP.

8.2 Enforcement of IP.

(a) Array IP. With respect to Patents listed on Exhibit E, Genentech (the Party “controlling” such action) shall have the sole right (but not the obligation) to seek to abate any Infringement of such Patents by a Third Party, or to file suit against such Third Party. With respect to Patents Controlled by Array or by an Array Included Affiliate that claim the composition of matter, manufacture (of a compound, but not an intermediate therefor) or use of a compound that Satisfies the Compound Criteria ( other than the Patents listed on Exhibit E), [ * ] .

- 30 -

EXHIBIT 10.57

(b) Settlement. The Party controlling any action described in Section 8.2(a) shall not settle or consent to an adverse judgment (including any judgment that affects the scope, validity or enforcement of any Array IP) without the express written consent of the non-controlling Party (such consent not to be unreasonably withheld). [ * ]

(c) Damages. Unless otherwise agreed by the Parties, and subject to the Parties’ respective obligations under Article 13, all monies recovered upon the final judgment or settlement of any action described in Section 8.2(a) for which Genentech has the sole or secondary right to take action shall be used as follows: [ * ] Net Sales of Licensed Products, subject to the royalty obligations set forth in Section 5.3.

8.3 Defense of Patents. If a Third Party brings a claim of invalidity, unenforceability or non-infringement of a given Patent within the Jointly Prosecuted and Maintained Patents (e.g., a declaratory judgment action or a nullity proceeding), subject to Section 7.5, [ * ] Notwithstanding the foregoing, Section 8.2(a) shall govern the rights and obligations of the Parties with respect to a counterclaim relating to Array IP.

8.4 Defense of Third Party Infringement Claims. If a Third Party brings a claim of infringement or misappropriation against Genentech on account of the manufacture, use, offer for sale, sale or import of any Compound, Licensed Product or Companion Diagnostic (exclusively licensed to Genentech under the License To Genentech), [ * ] Notwithstanding the foregoing, Section 8.2(a) shall govern the rights and obligations of the Parties with respect to a counterclaim relating to Array IP.

- 31 -

EXHIBIT 10.57

Article 9
Confidentiality

9.1 Disclosure and Use of Confidential Information. Except to the extent expressly authorized by this Agreement, each Party (in context, referred to as the “ Receiving Party ”) in possession of the Confidential Information of the other Party (in context, referred to as the “ Disclosing Party ”) agrees to: (a) hold in confidence and not disclose the Disclosing Party’s Confidential Information to any Third Party (other than an Affiliate under an obligation of confidentiality) and (b) only use (or permit the use of) the Disclosing Party’s Confidential Information in connection with activities contemplated by this Agreement or in order to further the purposes of this Agreement.

9.2 Exceptions. The obligations of the Receiving Party set forth in Section 9.1 shall not apply to the Disclosing Party’s Confidential Information to the extent that the Receiving Party establishes by written evidence that such Confidential Information:

(a) was already known to the Receiving Party, other than under an obligation of confidentiality, at the time of its disclosure by the Disclosing Party;

(b) was generally available to the public or otherwise part of the public domain at the time of its disclosure by the Disclosing Party;

(c) became generally available to the public or otherwise part of the public domain, other than through any act or omission of the Receiving Party in breach of this Agreement, after its disclosure by the Disclosing Party;

(d) was disclosed to the Receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others;

(e) was subsequently developed by or on behalf of the Receiving Party without use of the Disclosing Party’s Confidential Information; or

(f) is no longer subject to the provisions of Section 9.1 by the prior written consent of the Disclosing Party.

9.3 Authorized Disclosures.

(a) Legal Compliance. A Party may disclose the other Party’s Confidential Information if such disclosure is required by law, rule or regulation (including to comply with the order of a court or governmental regulations or the disclosure requirements of the Securities

- 32 -

EXHIBIT 10.57

and Exchange Commission or the securities exchange or other stock market on which such Party’s securities are traded), but only to the extent such disclosure is reasonably necessary for such compliance; provided, however, except for disclosures otherwise permitted under Section 9.3, or as otherwise required or necessitated by law, such Party shall provide prompt notice of such disclosure requirement to the other Party and provide reasonable assistance to enable such other Party to seek a protective order or otherwise prevent such disclosure.

(b) Regulatory Authorities. A Party may disclose the other Party’s Confidential Information to the extent such disclosure is required to comply with applicable governmental regulations or to conduct preclinical or clinical studies related to Compounds, Licensed Products or Companion Diagnostics (exclusively licensed to Genentech under the License To Genentech).

(c) Patent Prosecution. A Party may disclose the other Party’s Confidential Information to the extent such disclosure is reasonably necessary for the filing or publication of any patent application or patent on inventions, subject to the provisions of Section 7.2.

(d) Permitted Third Parties. The Receiving Party may disclose and grant use of particular Confidential Information of the Disclosing Party to the Receiving Party’s permitted sublicensees (actual or prospective), agents, consultants, clinical investigators, collaborators or contractors as the Receiving Party reasonably determines is necessary to receive the benefits of or fulfill its obligations pursuant to this Agreement; provided, however, any such permitted sublicensees, agents, consultants, clinical investigators, collaborators or contractors must be contractually bound in writing by obligations reasonably similar to those set forth in Section 9.1. Except as otherwise expressly provided in this Agreement, nothing in Article 9 shall restrict either Party from using or disclosing any of its own Confidential Information for any purpose whatsoever.

(e) Financing. A Party may disclose the financial terms and conditions of this Agreement to the extent that such disclosure is reasonably necessary to obtain an actual or potential debt or equity financing of such Party; provided, however, any Third Party(ies) receiving such a disclosure shall agree to be bound by obligations reasonably similar to those set forth in Section 9.1 and to only use such disclosed information for the purpose for which it was provided.

(f) M&A. A Party may disclose the financial terms and conditions of this Agreement and the scope of the License To Genentech to the extent that such disclosure is reasonably necessary in connection with an actual or prospective merger, acquisition, consolidation, share exchange or other similar transaction involving such Party; provided, however, any Third Party(ies) receiving such a disclosure shall agree to be bound by obligations

- 33 -

EXHIBIT 10.57

reasonably similar to those set forth in Section 9.1 and to only use such disclosed information for the purpose for which it was provided.

9.4 Continuing Obligation. Article 9 shall survive the expiration or termination of this Agreement for a period of ten (10) years.

9.5 Termination of Prior Confidentiality Agreements. As of the Effective Date, this Agreement supersedes the following agreements:

(a) Mutual Confidentiality Agreement between GNE and Array, effective as of January 20, 2009, as amended (for purposes of Section 9.5, “ Mutual CDA ”) with respect to all INFORMATION (as defined in the Mutual CDA);

(b) Confidential Disclosure Agreement between GNE, Array and [ * ];

(c) Confidential Disclosure Agreement between GNE, Array and [ * ]; and

(d) Confidentiality Agreement between [ * ].

The foregoing specified INFORMATION and Confidential Information disclosed to GNE and Array under the Mutual CDA, [ * ]

Article 10
Public Disclosures; Use of Names

10.1 Press Releases and Other Public Disclosures.

(a) Generally. For purposes of Section 10.1, a “ Disclosure ” means a press release or other public disclosure concerning this Agreement or the subject matter hereof, including (i) the terms and conditions of this Agreement and (ii) chemical entities known by either Party to be Compounds, and any information specifically related to such Compounds. Disclosures include public communications that contain previously disclosed information. The provisions of Section 10.1 are in addition to the provisions of Article 9.

(b) Review and Approval. Except as otherwise expressly provided in Section 10.1, each Party agrees that the other Party shall have no less than five (5) Business Days (before the date of a proposed Disclosure) to review, provide comments and approve any proposed Disclosure (even if such proposed Disclosure is required by law, rule or regulation), unless a shorter time period is agreed to by both Parties.

- 34 -

EXHIBIT 10.57

(c) Disclosures by Array. Genentech hereby approves the Disclosure by Array of the press release set forth in Exhibit B, following the signing of this Agreement by both Parties. Array may also make Disclosures regarding the achievement of Milestone Events, including a general description of the Milestone Event achieved (but not including the amount of the associated Milestone Payment, subject to Section 10.1(e)), subject to review and approval by Genentech under Section 10.1(b).

(d) Disclosures By Genentech. Except with respect to Disclosures of the financial terms and conditions of this Agreement, Disclosures by Genentech shall not be subject to either review or approval by Array under Section 10.1(b).

(e) Disclosure Required by Law. In the event that one Party reasonably concludes that a Disclosure is required by law, rule or regulation (including the disclosure requirements of the Securities and Exchange Commission or the securities exchange or other stock market on which such Party’s securities are traded (for purposes of Section 10.1, collectively, an “ Exchange ”)) and the other Party would prefer not to make such Disclosure, the Party seeking such Disclosure shall either (i) limit such Disclosure to address the concerns of the other Party or (ii) provide a written opinion from counsel stating that such limited Disclosure is not sufficient to comply with the applicable law, rule or regulation before making such Disclosure). Each Party agrees that it shall obtain its own legal advice with regard to its compliance with securities laws, rules and regulations, and will not rely on any statements made by the other Party relating to such securities laws, rules and regulations.

(f) Filing of Agreement. With respect to complying with the disclosure requirements of an Exchange, in connection with any required filing of this Agreement with such Exchange, the filing Party shall, at the request of the other Party, seek confidential treatment for portions of this Agreement from such Exchange and shall provide such other Party with the opportunity, for no less than fifteen (15) days (before the date of the proposed filing), to review and comment on any such proposed filing, and shall thereafter provide reasonable advance notice and opportunity for comment on any subsequent changes to such filing. Array shall, whether or not requested by Genentech, redact and request confidential treatment for (i) the Upfront Payment, Milestone Events, Milestone Amounts, Royalty Rates, Royalty Terms and Royalty Adjustments and (ii) the content of all the Exhibits, other than Exhibit B.

- 35 -

EXHIBIT 10.57

10.2 Use of Names. Except as otherwise expressly provided in this Agreement, no right, express or implied, is granted by the Agreement to use in any manner the name of “Array,” “Genentech,” “Roche” or any other trade name or trademark of the other Party in connection with the performance of this Agreement.

Article 11
Term; Termination

11.1 Term. This Agreement shall be effective as of the Effective Date. Unless sooner terminated as provided in Article 11, this Agreement shall expire on the date on which all of Genentech’s possible obligations under this Agreement with respect to Milestone Payments and Royalty Payments (other than Royalties Payments under Article 11) have passed or expired.

11.2 Termination for Material Breach.

(a) Generally. Subject to Section 11.2(b), either Party may terminate this Agreement, by notice to the other Party, for any material breach of this Agreement by the other Party, if such breach is not cured within sixty (60) days after the breaching Party receives notice of such breach from the non-breaching Party; provided, however, if such breach is not capable of being cured within such sixty (60) day period, the cure period shall be extended for such amount of time that the Parties agree to in writing is reasonably necessary to cure such breach, so long as the breaching Party is using diligent efforts to do so. Such termination shall be effective upon the expiration of the cure period. Any Dispute as to whether a notice of termination pursuant to this Section 11.2(a) is proper, or whether a breach has occurred, is material or has been cured, shall be resolved under Article 14. In such event, if the allegedly breaching Party is found to be in material breach, such breaching Party shall have sixty (60) days (or longer, as determined during the resolution of such Dispute) to cure such material breach following the resolution of such Dispute.

(b) Related to a Licensed Product. If Array has the right to terminate this Agreement due to a material breach by Genentech, and if such breach relates solely to a given Licensed Product, Array may only exclude such Licensed Product from the scope of the License To Genentech, and Array may not terminate the entire Agreement.

- 36 -

EXHIBIT 10.57

11.3 Termination for Convenience. Genentech shall have the right to terminate this Agreement in its entirety, in its sole discretion, upon sixty (60) days’ notice to Array.

11.4 Effects of Termination or Expiration.

(a) Termination by Genentech for Array’s Material Breach. In the event that Genentech terminates this Agreement pursuant to Section 11.2(a) (for Array’s material breach):

(i) as of the Termination Date, the License To Genentech shall become irrevocable; and

(ii) for sales of Licensed Products on or after the Termination Date, Genentech shall pay a royalty of [ * ] of Net Sales of a given Licensed Product for the remainder of the Royalty Terms for such Licensed Product (and such royalty shall be in lieu of a royalty based on the Royalty Rates and Royalty Adjustments, but shall otherwise be deemed a Royalty Payment, subject to Article 6); provided, however, if such termination is due to a knowing and willful breach of Array’s Exclusivity Obligations, the License To Genentech [ * ] .

(b) Termination by Genentech for Convenience or by Array for Genentech’s Material Breach. In the event that Genentech terminates this Agreement pursuant to Section 11.3 (for Genentech’s convenience) or Array terminates this Agreement pursuant to Section 11.2(a) (for Genentech’s material breach):

(i) as of the Termination Date, the License To Genentech shall terminate;

(ii) with respect to Licensed Products for which Genentech Initiated Clinical Development prior to the Termination Date, for as long as Array (and Array Controlled Affiliates) continue to satisfy Array’s Exclusivity Obligations and Array continues to comply with the provisions of Article 10, Genentech shall continue to pay any Milestone Payments and Royalty Payments that would otherwise be owed to Array (but for such termination), in accordance with Article 5 and Article 6; provided, however, Array, in its sole discretion, may elect under this Section 11.4(b)(ii) at any time, to immediately terminate its Exclusivity Obligations and its compliance with the provisions of Article 10 by providing notice of such election to Genentech;

(iii) within ninety (90) days after the Termination Date (unless otherwise agreed by Array), Genentech shall complete the transfer to Array (and/or to a designated Third Party) of all Transferred Technology and Materials, to the extent such Transferred Technology and Materials still exist and it is otherwise reasonable (where any costs related to such transfer to Array (or an Array Affiliate) shall be borne by Genentech and any

- 37 -

EXHIBIT 10.57

costs related to such transfer to a Third Party (other than an Array Affiliate) shall be borne by Array); and

(iv) within sixty (60) days after the Termination Date, Array may provide a written notice to Genentech’s Alliance Manager that requests that Genentech provide a Product Enablement Package to Array (“ Product Enablement Package Request ”), and if Array makes a Product Enablement Package Request, the provisions of Section 11.4(c) shall apply.

(c) Product Enablement Package. In the event that Array makes a Product Enablement Package Request, the provisions of this Section 11.4(c) shall apply.

(i) The Product Enablement Package may potentially include Know-How and materials that meet all the following requirements: (A) as of the Termination Date, are Controlled by Genentech or a Genentech Controlled Affiliate and are reasonably collectible; (B) were made or developed in the course of developing, or otherwise incorporated into, an Array Compound or Array Licensed Product under this Agreement; and (C) are reasonably necessary for Array to manufacture, develop and commercialize Array Compounds and/or Array Licensed Products in the form existing as of the Termination Date, including (1) data, reports, SOPs and protocols; (2) regulatory filings and supporting documents; and (3) manufacturing process information and drug materials produced by or on behalf of Genentech or a Genentech Controlled Affiliate for clinical trials. Following a Product Enablement Package Request from Array, Genentech shall identify Know-How and materials that meet all of the requirements for potential inclusion in the Product Enablement Package and provide a list of such Know-How and materials to Array’s Alliance Manager.

(ii) Within thirty (30) days of Array’s receipt of the list of Know-How and materials under Section 11.4(c)(i) for potential inclusion in the Product Enablement Package (unless Genentech agrees to a longer period of time), (A) Array shall review such identified Know-How and materials (and Genentech shall respond in a timely manner to reasonable inquires and requests from Array in support of such review) and (B) if Array elects to proceed, Array shall provide a written notice to Genentech’s Alliance Manager that specifies the particular Know-How and materials to be included in the Product Enablement Package. The Parties shall then negotiate (taking into account the value contributed by Genentech to any Array Compounds and Array Licensed Products existing as of the Termination Date) the terms and conditions of an agreement to be entered into by the Parties under which Genentech shall (A) provide the Product Enablement Package to Array and (B) grant a license to Array, under the Genentech IP and Patents and Know-How Controlled by a Genentech Controlled Affiliate (in all cases) that exists as of the Termination Date and is reasonably necessary to make, use, offer for sale, sell and import Array

- 38 -

EXHIBIT 10.57

Compounds and Array Licensed Products in the form existing as of the Termination Date, which license shall be to make, use, offer for sale, sell and import Array Compounds and Array Licensed Products for which Genentech had Initiated Clinical Development.

(iii) If the Parties are unable to agree on the financial terms and conditions of such an agreement under Section 11.4(c)(ii) within sixty (60) days after Genentech’s receipt of Array’s notice specifying the particular Know-How and materials to be included in the Product Enablement Package, the Dispute shall be resolved in accordance with the Dispute Resolution Provisions, including the provisions of Section 14.2(d) for resolving disputes under this Section 11.4(c)(iii) and, in such event, Array shall have the right (but not the obligation) to receive the Product Enablement Package and the license described in Section 11.4(c)(ii) on the financial terms and conditions selected by the arbitrators under Section 14.2(d).

(d) [ * ].

(e) Continuation of Sublicenses. In the event that the License To Genentech terminates for any reason other than termination of this Agreement by Genentech pursuant to Section 11.3 (for Genentech’s convenience), or a Licensed Product is excluded from the scope of the License To Genentech, any existing sublicenses granted by Genentech or a Sublicensee under the License To Genentech to a Sublicensee (other than a Sublicensee that is a Genentech Affiliate), shall continue in full force and effect (but only for as long as such existing sublicense remains in force in accordance with its terms), provided that such Sublicensee agrees to be bound by all the terms and conditions of this Agreement that are applicable to such Sublicensee, including rendering directly to Array all payments and other obligations due to Array related to such sublicense (e.g., Milestone Payments for the achievement of Milestone Events by such Sublicensee and Royalty Payments based on sales of Licensed Products by such Sublicensee). An existing sublicense that continues in accordance with this Section 11.4(e) shall continue to be sublicensable (in accordance with Section 4.1(d)) other than to Genentech or Genentech Affiliates.

11.5 Accrued Rights and Obligations. Except as otherwise expressly provided in this Agreement, termination of this Agreement shall not affect the rights and obligations of the Parties that accrued prior to the Termination Date. Any right that a Party has to terminate this Agreement, and any rights or obligations that the Parties have under Article 11 in the case of such termination, shall be taken into account in determining other rights or remedies that such terminating Party may have at law or in equity or otherwise.

11.6 Survival. Except as otherwise expressly provided in this Agreement, the following shall survive this Agreement’s expiration or termination for any reason: (a) Sections 2.2(c), 4.2 (except if the License To Genentech has terminated or this Agreement has expired), 4.3, 5.3(c) and 7.6 (except if the License To Genentech has terminated or this

- 39 -

EXHIBIT 10.57

Agreement has expired) and (b) Article 1, Article 8 (except if the License To Genentech has terminated or this Agreement has expired), Article 9, Article 10 (except if the License To Genentech has terminated or this Agreement has expired), Article 11, Article 12, Article 13, Article 14 and Article 15 (as applicable). To the extent applicable to a Section or Article that survives the expiration or termination of this Agreement, any other Sections and Articles that are (directly or indirectly) referenced in, or refer to, such surviving Section or Article shall survive.

Article 12
Representations and Warranties

12.1 Array Representations and Warranties. Array hereby represents and warrants the following to Genentech:

(a) Array has the full right, power and authority, and has obtained all approvals, permits or consents necessary, to enter into this Agreement, to perform all of its obligations hereunder and to grant the licenses granted hereunder.

(b) Array has not prior to the Effective Date entered into, and shall not following the Effective Date enter into, any agreement that conflicts in any way with this Agreement or Array’s obligations hereunder with respect to Array’s Compounds listed on Exhibit C.

(c) To its knowledge, Array has not prior to the Effective Date entered into, and shall not following the Effective Date enter into, any agreement that conflicts in any way with this Agreement or Array’s obligations hereunder with respect to Licensed Products or Companion Diagnostics.

(d) Array has not prior to the Effective Date agreed to grant in the future, and shall not following the Effective Date grant, any license, sublicense or other right to exploit any intellectual property rights that conflicts in any way with the licenses granted to Genentech under this Agreement.

(e) [ * ] .

(f) As of the Effective Date, (i) Array has sufficient legal and/or beneficial title to grant to Genentech the License To Genentech and other licenses and rights purported to be granted to Genentech under this Agreement, and with respect to the Patents within the Existing Array IP, all fees required to be paid in order to maintain such Patents have been paid to

- 40 -

EXHIBIT 10.57

date, and none of such Patents have been abandoned or canceled for failure to prosecute or maintain them; [ * ]

(g) [ * ]

(h) Array has provided to Genentech copies of all Third Party License Agreements entered into prior to the Effective Date that include Array IP with respect to Array’s Compounds listed on Exhibit C, together with any agreements granting licenses or other rights to Third Parties thereunder.

(i) To its knowledge, Array has provided to Genentech copies of all Third Party License Agreements entered into prior to the Effective Date that include Array IP with respect to Licensed Products or Companion Diagnostics, together with any agreements granting licenses or other rights to Third Parties thereunder.

(j) In addition to those Third Party License Agreements referenced in Section 12.1(h) and Section 12.1(i), Array has provided to Genentech copies of all other Third Party agreements entered into prior to the Effective Date that relate to the Target and/or compounds that are Array Compounds as of the Effective Date.

(k) The Clinical Materials (ARRY-575) provided to Genentech under this Agreement, at the time of delivery to Genentech (or its designated recipient or carrier), (i) conform to the applicable product specifications as of the Effective Date; (ii) were manufactured in compliance with the requirements of current good manufacturing practice and all applicable national, state and local laws, ordinances and governmental rules and regulations; (iii) comply with the manufacturer’s standard operating procedures; (iv) were manufactured in compliance with the applicable quality agreement(s); and (v) will be transferred free and clear of any liens, claims or encumbrances of any kind to the extent arising through or as a result of the acts or omissions of the manufacturer or Array, its Affiliates or their respective agents.

12.2 Genentech Representations and Warranties. Genentech hereby represents and warrants the following to Array:

(a) Genentech has the full right, power and authority, and has obtained all approvals, permits or consents necessary, to enter into this Agreement and to perform all of its obligations hereunder.

(b) [ * ]

(c) [ * ]

- 41 -

EXHIBIT 10.57

(d) [ * ]

(e) As of the Effective Date, (i) Genentech has legal and/or beneficial title to the Patents within the Genentech IP as of the Effective Date, all fees required to be paid by Genentech in order to maintain such Patents that claim GDC-0425 have been paid to date, and none of the such Patents have been abandoned or canceled for failure to prosecute or maintain them; (ii) [ * ]

(f) [ * ]

(g) [ * ]

12.3 Disclaimers. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO MATERIALS OR INFORMATION SUPPLIED BY IT TO THE OTHER PARTY HEREUNDER, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.

Article 13
Indemnification; Limitation on Liability; Insurance

13.1 Indemnification.

(a) Definitions. The following definitions are for purposes of Section 13.1:

(i) “ Claims ” means claims, suits, actions, demands or other proceedings by any Third Party.

(ii) “ Indemnitee ” means, as applicable, a Array Indemnitee (as defined in Section 13.1(b)(i)) or a Genentech Indemnitee (as defined in Section 13.1(c)(i)).

(iii) “ Losses ” means any and all liabilities, damages, settlements, penalties, fines, costs or expenses (including, reasonable attorneys’ fees and other expenses of litigation).

(b) Indemnification by Genentech .

(i) Indemnification Scope . Genentech hereby agrees to indemnify, defend and hold harmless each of Array and its officers, directors, employees and agents (for

- 42 -

EXHIBIT 10.57

purposes of Section 13.1, each, an “ Array Indemnitee ”) from and against Losses resulting directly from Claims to the extent attributable to (A) Genentech’s breach of its representations or warranties under this Agreement or (B) activities performed by Genentech under this Agreement, including the discovery, development, manufacture, use, handling, storage, sale or other disposition of Licensed Products by Genentech under this Agreement. Genentech’s obligations under this Section 13.1(b)(i) shall not apply to the extent that any such Losses are attributable to (A) Array’s breach of its representations or warranties under this Agreement or (B) the negligence or willful misconduct of any Array Indemnitees.

(ii) Indemnification Procedures. Array shall (A) notify Genentech of any Claim for which it seeks to exercise its rights under Section 13.1(b)(i) as soon as reasonably possible after it receives notice of such Claim; (B) permit Genentech to assume the sole control of the defense thereof, with counsel mutually satisfactory to the Parties, including the right to settle or conclude such defense; (C) cooperate as reasonably requested (at the expense of Genentech) in the defense of such Claim; and (D) not settle such Claim without the express, prior written consent of Genentech. Genentech’s obligations under Section 13.1(b)(i) shall not apply to amounts paid in settlement of any Claims if such settlement is effected without Genentech’s consent.

(c) Indemnification by Array .

(i) Indemnification Scope . Array hereby agrees to indemnify, defend (if requested by Genentech) and hold harmless each of Genentech and its officers, directors, employees and agents (for purposes of Section 13.1, each, a “ Genentech Indemnitee ”) from and against Losses resulting directly from Claims to the extent attributable to (A) Array’s breach of its representations or warranties under this Agreement or (B) activities performed by Array under this Agreement. Array’s obligations under this Section 13.1(c)(i) shall not apply to the extent that any such Losses are attributable to (A) Genentech’s breach of its representations or warranties under this Agreement or (B) the negligence or willful misconduct of any Genentech Indemnitees.

(ii) Indemnification Procedures. Genentech shall notify Array of any Claim for which it seeks to exercise its rights under Section 13.1(c)(i) as soon as reasonably possible after it receives notice of such Claim. If requested by Genentech, Array shall assume control of the defense thereof, with counsel mutually satisfactory to the Parties, including the right to settle or conclude such defense. In the event that Genentech requests that Array assume such control, Genentech shall (A) cooperate as reasonably requested (at the expense of Array) in the defense of such Claim and (B) not settle such Claim without the express, prior written consent of Array. Array’s obligations under Section 13.1(c)(i) shall not apply to amounts paid in settlement of any Claims if such settlement is effected without Array’s consent.

- 43 -

EXHIBIT 10.57

(d) Limitations . The failure of an Indemnitee to deliver notice to the other Party (for purposes of this Section 13.1(d), the “ Indemnitor ”) within a reasonable time after the commencement of any Claim for which such Indemnitee seeks to exercise its rights under Section 13.1, if prejudicial to the Indemnitor’s ability to defend such Claim, shall relieve the Indemnitor of its obligation to the Indemnitees under Section 13.1. The Parties agree that only Array or Genentech may seek to exercise the rights under Section 13.1 (on its own behalf or on behalf of its Indemnitees), and other Indemnitees may not directly seek to exercise such rights.

13.2 Limitation on Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES, HOWEVER CAUSED; PROVIDED HOWEVER, NOTHING IN THIS SECTION 13.2 IS INTENDED TO LIMIT THE RIGHTS OR OBLIGATIONS OF EITHER PARTY UNDER SECTION 13.1.

13.3 Insurance.

(a) General. Each Party shall maintain insurance coverage as set forth in Section 13.3 at its own cost; provided, however, Genentech has the right, in its sole discretion, to self-insure, in part or in whole, for any such coverage. The insurance policies for such coverage shall be an occurrence form, but if only a claims-made form is available to a Party, such Party shall maintain such coverage for at least five (5) years after such Party has no further obligations under this Agreement. Insurance coverage shall be primary insurance with respect to each Party’s own participation under this Agreement and shall be maintained with an insurance company or companies having an A.M. Best’s rating (or its equivalent) of A-VII or better. On written request, each Party shall provide to the other Party certificates of insurance evidencing the insurance coverage required under Section 13.3. Each Party shall provide to the other Party at least thirty (30) days’ notice of any cancellation, nonrenewal or material change in any of the required insurance coverages.

(b) Commercial General Liability Insurance. Each Party shall maintain commercial general liability insurance (including contractual liability, personal advertising and products/completed operations coverage) with limits not less than [ * ] . Each Party shall name the other Party as an additional insured by endorsement under its commercial general liability insurance.

(c) Products Liability Insurance. Commencing not later than thirty (30) days prior to the first use in humans of the Clinical Materials (ARRY-575) in a clinical trial conducted by or on behalf of Genentech, Array shall have and maintain such type and amounts of products liability insurance covering such use of the Clinical Materials (ARRY-575) as is normal and customary in the industry generally for parties similarly situated, but, in any event,

- 44 -

EXHIBIT 10.57

with a minimum combined single limit per occurrence for products liability of [ * ] for any period during which the Clinical Materials (ARRY-575) are being so used.

Article 14
Dispute Resolution

14.1 Internal Resolution. Except as otherwise expressly provided in this Agreement, any Disputes shall be first referred to a Genentech Vice President and the Chief Executive Officer of Array for resolution, prior to proceeding under the other provisions of Article 14. A Dispute shall be referred to such executives upon one Party providing the other Party with notice that such Dispute exists, and such executives (or their designees) shall attempt to resolve such Dispute through good faith discussions. In the event that such Dispute is not resolved within thirty (30) days of such other Party’s receipt of such notice, subject to Section 14.3, either Party may initiate the Dispute resolution provisions in Section 14.2. The Parties agree that any discussions between such executives (or their designees) regarding such Dispute do not constitute settlement discussions, unless the Parties agree otherwise in writing.

14.2 Arbitration.

(a) Rules. Except as otherwise expressly provided in this Agreement (including under Section 14.3), the Parties agree that any Dispute not resolved internally by the Parties pursuant to Section 14.1 shall be resolved through binding arbitration conducted by the American Arbitration Association in accordance with the then prevailing Commercial Arbitration Rules of the American Arbitration Association (for purposes of Article 14, the “ Rules ”), except as modified in this Agreement, applying the substantive law specified in Section 15.2.

(b) Arbitrators; Location. Each Party shall select one (1) arbitrator, and the two (2) arbitrators so selected shall choose a third arbitrator. All three (3) arbitrators shall serve as neutrals and have at least ten (10) years of (i) dispute resolution experience (which may include judicial experience) or (ii) legal or business experience in the biotech or pharmaceutical industry. In any event, at least one (1) arbitrator shall satisfy the foregoing experience requirement under clause (ii). If a Party fails to nominate its arbitrator, or if the Parties’ arbitrators cannot agree on the third arbitrator, the necessary appointments shall be made in accordance with the Rules. Once appointed by a Party, such Party shall have no ex parte communication with its appointed arbitrator. The arbitration proceedings shall be conducted in San Francisco if Array initiates the arbitration or in Denver, Colorado if Genentech initiates the arbitration.

- 45 -

EXHIBIT 10.57

(c) General Procedures; Awards. Each Party agrees to use reasonable efforts to make all of its current employees available, if reasonably needed, and agrees that the arbitrators may deem any party as “necessary.” The arbitrators shall be instructed and required to render a written, binding, non-appealable resolution and award on each issue that clearly states the basis upon which such resolution and award is made. The written resolution and award shall be delivered to the Parties as expeditiously as possible, but in no event more than ninety (90) days after conclusion of the hearing, unless otherwise agreed by the Parties. Judgment upon such award may be entered in any competent court or application may be made to any competent court for judicial acceptance of such an award and order for enforcement. Each Party agrees that, notwithstanding any provision of applicable law or of this Agreement, it will not request, and the arbitrators shall have no authority to award, punitive or exemplary damages against any Party.

(d) Specific Procedures for a Product Enablement Package/License. In addition to the other Dispute Resolution Provisions, with respect to Disputes arising under Section 11.4(c)(iii): (i) each Party shall prepare a written report setting forth its position with respect to the financial terms and conditions under which Genentech shall provide the Product Enablement Package and grant the associated license to Array, together with supporting documents or affidavits as such Party deems appropriate; (ii) the arbitrators shall not order nor require discovery against either Party; and (iii) the arbitrators shall select one of the Party’s positions as their decision, and shall not have authority to render any substantive decision other than to so select the position of either Genentech or Array.

(e) Costs. The “prevailing” Party, as determined by the arbitrators, shall be entitled to (i) its share of fees and expenses of the arbitrators and (ii) its attorneys’ fees and associated costs and expenses. In determining which Party “prevailed,” the arbitrators shall consider (i) the significance, including the financial impact, of the claims prevailed upon and (ii) the scope of claims prevailed upon, in comparison to the total scope of the claims at issue. If the arbitrators determine that, given the scope of the arbitration, neither Party “prevailed,” the arbitrators shall order that the Parties (i) share equally the fees and expenses of the arbitrators and (ii) bear their own attorneys’ fees and associated costs and expenses.

(f) Interim Equitable Relief. Notwithstanding anything to the contrary in Section 14.2 in the event that a Party reasonably requires relief on a more expedited basis than would be possible pursuant to the procedure set forth in Article 14, such Party may seek a temporary injunction or other interim equitable relief in a court of competent jurisdiction pending the opportunity of the arbitrators to review the decision under Section 14.2. Such court shall have no jurisdiction or ability to resolve Disputes beyond the specific issue of temporary injunction or other interim equitable relief.

- 46 -

EXHIBIT 10.57

(g) Protective Orders; Arbitrability. At the request of either Party, the arbitrators shall enter an appropriate protective order to maintain the confidentiality of information produced or exchanged in the course of the arbitration proceedings. The arbitrators shall have the power to decide all questions of arbitrability.

14.3 Subject Matter Exclusions. Notwithstanding the provisions of Section 14.2, any Dispute not resolved internally by the Parties pursuant to Section 14.1 that involves the validity, infringement or enforceability of a Patent included in a license granted in this Agreement (a) that is issued in the United States shall be subject to actions before the United States Patent and Trademark Office and/or submitted exclusively to the federal court located in the jurisdiction of the district where any of the defendants reside; and (b) that is issued in any other country (or region) shall be brought before an appropriate regulatory or administrative body or court in that country (or region), and the Parties hereby consent to the jurisdiction and venue of such courts and bodies.

Article 15
Miscellaneous

15.1 Notices. Except as otherwise expressly provided in this Agreement, any notice required under this Agreement shall be in writing, shall specifically refer to this Agreement and shall be sent in accordance with the provisions of this Section 15.1. Notices shall be sent via one of the following means and will be effective (a) on the date of delivery, if delivered in person; (b) on the date of receipt, if sent by a facsimile (with delivery confirmed); or (c) on the date of receipt, if sent by private express courier or by first class certified mail, return receipt requested (or its equivalent). Any notice sent via facsimile shall be followed by a copy of such notice by private express courier or by first class mail. Notices shall be sent to the other Party at the addresses set forth below. Either Party may change its addresses for purposes of this Section 15.1 by sending written notice to the other Party.

If to Array:

Array BioPharma Inc.

3200 Walnut Street

Boulder, Colorado 80301

Attn: Chief Operating Officer

Telephone: (303) 381-6699

Facsimile: (303) 381-6697

- 47 -

EXHIBIT 10.57

with a required copy to:

Array BioPharma Inc.

3200 Walnut Street

Boulder, Colorado 80301

Attn: General Counsel

Telephone: (303) 381-6679

Facsimile: (303) 386-1290

If to Genentech:

Genentech, Inc.

1 DNA Way,

South San Francisco, CA 94080

Attn: Corporate Secretary

Telephone: (650) 225-1000

Facsimile: (650) 467-9146

and to:

F. Hoffmann -La Roche Ltd

Grenzacherstrasse 124

CH-4070 Basel

Switzerland

Attention: Group Legal Department

Facsimile: 41 61 688 13 96

with a required copy to:

Genentech, Inc.

1 DNA Way,

South San Francisco, CA 94080

Attn: Head of Alliance Management, gPartnering

Telephone: (650) 225-1000

Facsimile: (650) 225-3009

and to:

- 48 -

EXHIBIT 10.57

F. Hoffmann -La Roche Ltd

Grenzacherstrasse 124

CH-4070 Basel

Switzerland

Attention: Global Head, Alliance Management and Operations

Facsimile: 41 61 688 79 90

15.2 Governing Law. This Agreement shall be governed by and construed under the laws of the State of Delaware, without regard to conflict of laws principles. The Parties hereby exclude from this Agreement the application of the United Nations Convention on Contracts for the International Sale of Goods.

15.3 Actions of Affiliates. Each Party may exercise its rights or perform its obligations under this Agreement personally or through one or more Affiliates, provided that such Party shall nonetheless be primarily liable for the performance of its Affiliates and for any failure by its Affiliates to comply with the restrictions, limitations and obligations set forth in this Agreement.

15.4 Assignment. Except as otherwise expressly provided in this Agreement, neither Party may assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of the other Party, such consent not to be unreasonably withheld. Either Party may assign this Agreement, in its entirety, to (a) an Affiliate or (b) an acquirer of all its capital stock (by reverse triangular merger or otherwise) or all or substantially all its assets relating to the subject matter of this Agreement, provided, in each case, that the party to which this Agreement is assigned expressly agrees in writing to assume and be bound by the obligations of the assigning Party under this Agreement. A copy of such writing shall be provided to the non-assigning Party within thirty (30) days of the assignment. Subject to the foregoing, this Agreement will inure to the benefit of and bind the Parties’ successors and assigns. Any assignment in contravention of the foregoing shall be null and void.

15.5 Force Majeure. Neither Party shall be deemed to have breached this Agreement for failure to perform its obligations under this Agreement to the extent such failure results from causes beyond the reasonable control of the affected Party, such causes including acts of God, earthquakes, fires, floods, embargoes, wars, acts of terrorism, insurrections, riots, civil commotions, omissions or delays in action by any governmental authority, acts of a government or agency thereof and judicial orders or decrees. If a force majeure event occurs, the Party unable to perform shall promptly notify the other Party of the occurrence of such event, and the Parties shall meet (in person or telephonically) promptly thereafter to discuss the circumstances relating thereto. The Party unable to perform shall (a) provide reasonable status updates to the

- 49 -

EXHIBIT 10.57

other Party from time to time; (b) use commercially reasonable efforts to mitigate any adverse consequences arising out of its failure to perform; and (c) resume performance as promptly as possible.

15.6 Relationship of the Parties. The Parties to this Agreement are independent contractors, and nothing contained in this Agreement shall be deemed or construed to create a partnership, joint venture, employment, franchise, agency or fiduciary relationship between the Parties.

15.7 Amendment; Waiver. Except as otherwise expressly provided in this Agreement, no amendment to this Agreement shall be effective unless made in writing and executed by an authorized representative of each Party. A Party’s failure to exercise, or delay in exercising, any right, power, privilege or remedy under this Agreement shall not (a) operate as a waiver thereof or (b) operate as a waiver of any other right, power, privilege or remedy. A waiver will be effective only upon the written consent of the Party granting such waiver.

15.8 Construction; Captions. Each Party acknowledges that it participated in the negotiation and preparation of this Agreement and that it had the opportunity to consult with an attorney of its choice in connection therewith. Ambiguities, if any, in this Agreement shall not be construed against either Party, irrespective of which Party may be deemed to have drafted the Agreement or authorized the ambiguous provision. Capitalized terms defined in the singular shall include the plural and vice versa. The terms “includes” and “including” mean “includes, without limitation,” and “including, without limitation,” respectively. Titles, headings and other captions are for convenience only and shall not affect the meaning or interpretation of this Agreement.

15.9 Severability. If any of the provisions of this Agreement are held to be illegal, invalid or unenforceable, such illegal, invalid or unenforceable provisions shall be replaced by legal, valid and enforceable provisions that will achieve to the maximum extent possible the intent of the Parties, and the other provisions of this Agreement shall remain in full force and effect.

15.10 Entire Agreement. This Agreement contains the entire understanding between the Parties with respect to the subject matter hereof and supersedes and terminates all prior agreements, understandings and arrangements between the Parties with respect to such subject matter, whether written or oral.

15.11 Counterparts; Facsimiles. This Agreement may be executed in two (2) or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. A facsimile (including a PDF image delivered via email) copy of

- 50 -

EXHIBIT 10.57

this Agreement, including the signature pages hereto, will be deemed to be an original. Notwithstanding the foregoing, the Parties shall deliver original execution copies of this Agreement to one another as soon as practicable following execution thereof.

[Signature page follows]

- 51 -

EXHIBIT 10.57

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective duly authorized representatives as set forth below.

ARRAY BIOPHARMA INC .		GENENTECH, INC.

Signed:	/s/ Robert E. Conway	Signed:	/s/ Robert Andreatta

Name:	Robert E. Conway	Name:	Robert Andreatta

Title:	Chief Executive Officer	Title:	VP, Controller


		F. HOFFMANN-LA ROCHE, LTD

		Signed:	/s/ Zan Zabrowski

		Name:	Zan Zabrowski

		Title:	General Head, Roche Partnering


		Signed:	/s/ Stefan Arnold

		Name:	Stefan Arnold

		Title:	Head Legal Pharma

- 52 -

EXHIBIT 10.57

EXHIBIT A

LISTED ARRAY TECHNOLOGY AND MATERIALS

Array Technology and Materials shall include, among other items, the following:

[ * ]

Exhibit A-1

EXHIBIT 10.57

EXHIBIT B

PRESS RELEASE

CONTACT: Tricia Haugeto

(303) 386-1193

thaugeto@arraybiopharma.com

ARRAY ANNOUNCES NEW ONCOLOGY AGREEMENT WITH GENENTECH

Boulder, Colo., (August X, 2011) –Array BioPharma (Nasdaq: ARRY) today announced an oncology agreement with Genentech, a member of the Roche Group (SIX: RO, ROG; OTCQX: RHHBY), for the development of each company’s small-molecule Checkpoint kinase 1 (ChK-1) program. The programs include Genentech’s compound GDC-0425 (RG7602), currently in Phase 1, and Array’s compound ARRY-575, which is being prepared for an investigational new drug application to initiate a Phase 1 trial in cancer patients.

Under the terms of the agreement, Genentech is responsible for all clinical development and commercialization activities. Array will receive an upfront payment of $28 million and is eligible to receive clinical and commercial milestone payments up to $685 million and up to double-digit royalties on sales of any resulting drugs. Full financial terms have not been disclosed.

“We’re delighted to expand our long-standing relationship with Genentech, a leading innovator of important new cancer therapies,” said Robert E. Conway, chief executive officer, Array BioPharma. “Combining both companies’ programs will maximize our chances for success in developing and commercializing this novel cancer therapy. We believe ChK-1 inhibition is a key strategy for enhancing the efficacy of chemotherapeutic and other agents in cancer patients.”

ChK-1 is a protein kinase that regulates the tumor cell’s response to DNA damage often caused by treatment with chemotherapy. In response to DNA damage, ChK-1 blocks cell cycle progression in order to allow for repair of damaged DNA, thereby limiting the efficacy of chemotherapeutic agents. Inhibiting ChK-1 in combination with chemotherapy can enhance tumor cell death by preventing these cells from recovering from DNA damage. Both GDC-0425 and ARRY-575 are highly selective, oral ChK-1 inhibitors designed to enhance the efficacy of some chemotherapeutic agents.

Exhibit B-1

EXHIBIT 10.57

Genentech and Array Relationship

Genentech and Array have worked together since 2004 to advance certain oncology programs into clinical development. In 2010, one resulting drug, GDC-0068, an AKT inhibitor, entered Phase 1 clinical testing. GDC-0068 is currently advancing into a Phase 1b trial. Array researchers continue to advance other preclinical programs under Array’s collaboration agreement with Genentech.

About Array BioPharma

Array BioPharma Inc. is a biopharmaceutical company focused on the discovery, development and commercialization of targeted small-molecule drugs to treat patients afflicted with cancer and inflammatory diseases. Our proprietary drug development pipeline includes clinical candidates that are designed to regulate therapeutically important target proteins and are aimed at significant unmet medical needs. For more information on Array, please go to www.arraybiopharma.com.

Array BioPharma Forward-Looking Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our potential to earn future milestone and royalty payments under our agreement with Genentech, the potential for the results of preclinical and clinical trials to support regulatory approval or the marketing success of a drug candidate and future plans to progress and develop ARRY-575 and other compounds covered by the License Agreement. These statements involve significant risks and uncertainties, including those discussed in our most recent annual report filed on form 10-K, in our quarterly reports filed on Form 10-Q, and in other reports filed by Array with the Securities and Exchange Commission. Because these statements reflect our current expectations concerning future events, our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors. These factors include, but are not limited to, our ability to continue to fund and successfully progress internal research and development efforts and to create effective, commercially viable drugs; the ability of Array and our collaborators to effectively and timely conduct clinical trials in light of increasing costs and difficulties in locating appropriate trial sites and in enrolling patients who meet the criteria for certain clinical trials; risks associated with dependence on third-party service providers to successfully conduct clinical trials within and outside the United States; our ability to achieve and maintain profitability and maintain sufficient cash resources; risks associated with our dependence on our collaborators for the clinical development and commercialization of our out-licensed drug candidates; the ability of our collaborators and of Array BioPharma Inc. to meet objectives tied to milestones and royalties; our ability to attract and retain experienced scientists and management. We are providing this information as of August X, 2011. We undertake no duty to

Exhibit B-2

EXHIBIT 10.57

update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements or of anticipated or unanticipated events that alter any assumptions underlying such statements.

Exhibit B-3

EXHIBIT 10.57

EXHIBIT C

LISTED COMPOUNDS

Genentech’s Compounds

GDC-0425 and [ * ]

Array’s Compounds

ARRY-575 and the Compounds in the following table: [ * ]

Exhibit D-1

EXHIBIT 10.57

Exhibit D

COMPOUND ASSAY & COMPOUND CRITERIA

Biochemical Assay :

Compound Assay: [ * ]

Compound Criteria: [ * ]

Cellular Assay :

Compound Assay: [ * ]

Compound Criteria: [ * ]

Exhibit D-2

EXHIBIT 10.57

EXHIBIT E

[ * ]

Exhibit E-1

EXHIBIT 10.57

EXHIBIT F

SPECIFICATIONS FOR CLINICAL MATERIALS ( ARRY-575 )

RSD0043-015.01 [ * ]

RSD0043-060.01 [ * ]

RSC0251.01 [ * ]

Exhibit F-1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert E. Conway, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Array BioPharma Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within this entity, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 2, 2011	/s/ Robert E. Conway
	Robert E. Conway
	Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, R. Michael Carruthers, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Array BioPharma Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 2, 2011	/s/ R. Michael Carruthers
	R. Michael Carruthers
	Chief Financial Officer

Exhibit 32.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this quarterly report of Array BioPharma Inc. (the “Registrant”) on Form 10-Q for the quarterly period ended September 30, 2011 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the date indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(a) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act; of 1934, amended, and

(b) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date November 2, 2011

	/s/ Robert E. Conway

	Robert E. Conway
	Chief Executive Officer


	/s/ R. Michael Carruthers

	R. Michael Carruthers
	Chief Financial Officer