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Clovis (CLVS) Q4 Loss Wider than Expected; Focus on Rubraca

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Clovis Oncology, Inc. reported fourth-quarter 2016 loss of $1.83 per share, wider than the Zacks Consensus Estimate of a loss of $1.65. However, the loss was much narrower than the year-ago loss of $2.23 per share.

Clovis did not generate significant revenues in the reported quarter, as was the case a year ago.

However, Clovis got a huge boost with the FDA granting accelerated approval to its advanced ovarian cancer treatment, Rubraca tablets in December last year, two months ahead of schedule. Continued approval in this indication will depend upon the verification and description of clinical benefit in confirmatory studies. Clovis in-licensed Rubraca from Pfizer, Inc. (PFE - Free Report) in 2011.

Clovis’ share price movement shows that the stock has significantly outperformed the Zacks classified Medical-Biomedical and Genetics industry, having surged 37.3% this year so far, while the industry rose 6.5%.

Quarter in Detail

During the reported quarter, research & development expenses decreased 28.3% year over year to $54.5 million, primarily due to decreased development activities related to rociletinib program.General and administrative (G&A) expenses increased 48.8% year over year to $12.2 million, reflecting commercialization costs for Rubraca launch, higher legal expense and personnel costs.

Cash used in operating activities for 2016 was $266.7 million, less than the guidance of approximately $276–$286 million.

The company ended 2016 with $266.2 million of cash equivalents and available-for-sale securities, exceeding the company’s guidance range of $245–$255 million. Thereafter, In January, Clovis raised net proceeds of $221.2 million through an offering of 5.75 million shares of common stock

Update on Rubraca

At the conference call, the company said that over 150 different healthcare practitioners had prescribed Rubraca till that date. Chief Executive Officer, Patrick Mahaffy said the drug has not been facing any reimbursement issues.

Rubraca is not only the first approved product in Clovis’ portfolio, but also has bright prospects given the immense commercial potential in the target market and the tremendous demand for PARP inhibitors. Successful commercialization will significantly boost Clovis’ top line, going forward. Rubraca is also under review in the EU for a comparable ovarian cancer indication. Clovis expects an approval in EU in late 2017 or early 2018 and is establishing the commercial infrastructure for the same.

Several studies on Rubraca, targeting different types of ovarian cancer patients, are currently underway. Clovis has completed enrollment in a pivotal maintenance confirmatory study - ARIEL3 - on Rubraca. Data is expected to be available in mid 2017. The ARIEL4 phase III treatment confirmatory study is open for enrolment.

Meanwhile, Clovis is looking to expand Rubraca’s label into additional indications like prostrate, breast and pancreatic cancers, among others. Several clinical studies in ovarian, prostate, breast and gastroesophageal cancers are either open for enrollment or expected to be open for enrollment this quarter.

Clovis carries a Zacks Rank #3 (Hold). 

Clovis Oncology, Inc. Price, Consensus and EPS Surprise

 

Clovis Oncology, Inc. Price, Consensus and EPS Surprise | Clovis Oncology, Inc. Quote

Stocks worth considering in the pharmaceutical sector are Momenta Pharmaceuticals, Inc. with a Zacks Rank #1 (Strong Buy) and Summit Therapeutics plc (SMMT - Free Report) with a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Momenta rose 65.9% in the past one year while loss estimates for 2017 have narrowed by almost 22% in the past 30 days.

Shares of Summit Therapeutics rose 55% in the past one year while loss estimates for 2017 have narrowed by more than 6% in the past 30 days.

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