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Analyst Blog

Clovis Oncology, Inc, (CLVS - Free Report) reported third-quarter 2016 loss of $1.70 per share, narrower than both the Zacks Consensus Estimate of a loss of $1.89 and the year-ago loss of $2.62. The company’s shares gained 4.6% following its third-quarter release.

With no approved product in its portfolio yet, Clovis did not generate any revenue in the reported quarter, as was the case a year ago.

Quarter in Detail

During the reported quarter, research & development expenses decreased 28.6% year over year to $54.3 million primarily due to decreased development activities related to rociletinib, partially offset by higher expenses associated with rucaparib development programs and launch preparation.

General and administrative (G&A) expenses increased 10% year over year to $9.2 million, reflecting higher legal expense and personnel costs for employees engaged in G&A.

Clovis expects cash used in operating activities for 2016 to be approximately $276–$286 million (old guidance: $294–$309 million) and anticipates ending the year with approximately $245–$255 million (old guidance: $220–235 million) in cash, cash equivalents and available-for-sale securities. The latest change in the cash guidance is primarily related to the recent amendment of the company’s worldwide license agreement with Pfizer, Inc. (PFE - Free Report) for rucaparib.

The company believes it will be able to fund operations through 2018.

Pipeline Update

Clovis has made significant progress with its lead pipeline candidate rucaparib. In Aug 2016, the FDA accepted the company’s new drug application (NDA) for rucaparib for accelerated approval and has granted priority review status to the candidate. The company is looking to get rucaparib approved for the monotherapy treatment of advanced ovarian cancer with deleterious BRCA-mutated tumors in patients who have been previously received two or more chemotherapies. A response should be out by Feb 23, 2016.

In preparation for the potential commercial launch for rucaparib in the U.S., Clovis signed a long-term manufacturing and supply agreement with Lonza, its current manufacturer.

Clovis also submitted a marketing authorization application for rucaparib to the European Medicines Agency for its approval in a comparable ovarian cancer treatment indication last week.

Meanwhile, Clovis has completed enrollment in the phase III ARIEL3 randomized maintenance study for second-line maintenance therapy in women with ovarian cancer who have responded to platinum-based therapy. Data are anticipated in the second half of 2017. These data will allow the company to follow up with a supplemental NDA for second-line maintenance therapy in women with ovarian cancer who have responded to platinum-based therapy

Several studies, including both Clovis-sponsored and investigator-initiated studies, have recently commenced or will begin enrolling patients in the fourth quarter. These include the Clovis-sponsored phase III TRITON3 comparative study for the treatment of metastatic castrate-resistant prostate cancer enrolling BRCA mutant and ATM mutant (both inclusive of germline and somatic) patients who have progressed on androgen-receptor targeted therapy and who have not yet received chemotherapy in the castrate-resistant setting. The study is expected to commence in the first quarter of 2017.

The study will compare rucaparib to physician’s choice of AR-targeted therapy or chemotherapy in these patients.

CLOVIS ONCOLOGY Price, Consensus and EPS Surprise


Zacks Rank & Other Stocks to Consider

Clovis currently has a Zacks Rank #4 (Sell). A couple of better-ranked stocks in the healthcare sector include Infinity Pharmaceuticals, Inc. (INFI - Free Report) and Anika Therapeutics (ANIK - Free Report) . Both of them sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Infinity’s loss estimates narrowed from $3.84 to $3.79 for 2016 and from 87 cents to 86 cents for 2017 over the last 60 days. The company has posted a positive surprise in all of the four trailing quarters with an average beat of 67.62%.

Anika’s earnings estimates increased from $1.96 to $2.06 for 2016 and from $2.03 to $2.09 for 2017 over the last 60 days. The company has posted a positive surprise in all of the four trailing quarters with an average beat of 33.14%. Its share price has gained 9.4% year to date.

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