Array BioPharma Inc. (NASDAQ:ARRY) today announced that it has received an additional $40 million funding commitment from Deerfield Management, a leading healthcare investment organization and one of Array’s largest shareholders. This funding commitment is in addition to the $80 million Array previously received from Deerfield in 2008. Together with existing capital, these funds will be available to advance Array’s deep pipeline of wholly owned small molecule drug programs in development.

“We are delighted to expand our relationship with Deerfield through securing this additional $40 million funding commitment from one of the industry’s leading healthcare investors,” said Robert E. Conway, Chief Executive Officer. “These additional funds will allow us to aggressively advance our development pipeline and enhances our position in ongoing partnering discussions.”

In connection with Array’s right to draw the additional funds, Deerfield will receive a transaction fee of $500,000 and Array has exchanged warrants to purchase six million shares of Array’s common stock previously issued to Deerfield in connection with the prior facility at an exercise price of $7.54 per share for warrants to purchase six million shares of its common stock at an exercise price of $3.65 per share. In addition, as part of the new agreement, the amount of Cash, Cash Equivalents and Marketable Securities Array is required to maintain under both facilities was reduced from $40 million to $20 million.

Should Array elect to draw down the additional $40 million, the interest rate on the outstanding $80 million principal will decrease from 8.5 percent to 7.5 percent annually and the new interest rate will also apply to the additional funds. All interest will be paid monthly in cash or stock at Array’s option. If Array’s Cash, Cash Equivalents and Marketable Securities, including amounts available under the new facility, fall below $60 million, higher interest rates will apply to both facilities. With the incremental $40 million draw, the Company will issue six million additional warrants and pay an additional $500,000 in fees. The additional warrants will have an exercise price equal to the greater of $3.13 or 120 percent of the volume weighted average stock price over the 15-day period prior to issuance. These warrants contain substantially identical terms as the previously issued warrants and will be exercisable six months from the date the funds are drawn down under the new facility.