What's Behind Clovis' (CLVS) One-Year Rally of 146.3%?
Shares of Clovis Oncology, Inc. CLVS got a huge boost in Dec 2016, when the company received accelerated FDA approval for its lead drug, Rubraca (rucaparib).
In fact, Clovis’ shares have surged 37.1% in the past one month, outperforming the Zacks classified Medical-Biomedical and Genetics industry, which gained 2.8% during this period. Moreover, shares of Clovis have significantly outperformed the industry in the past one year. The stock surged 146.3% during this period, while the industry witnessed a decline of 10.4%.
Clovis’ path to gaining regulatory approval for Rubraca has been very smooth. The company completed the submission of a new drug application (NDA) to the FDA for Rubraca in late Jun 2016, followed by its acceptance by the regulatory agency for accelerated approval and granting of priority review status in August. It was finally approved in Dec 2016, earlier than expected. In fact, the approval came more than two months ahead of schedule. The FDA was initially expected to render a final decision on Rubraca by Feb 23, 2017.
We note that Rubraca has been approved as monotherapy for patients with deleterious BRCA mutation (germline and/or somatic)-associated advanced ovarian cancer, who have been treated with two or more chemotherapies, and selected for therapy based on an FDA-approved companion diagnostic test.
This makes Rubraca the first and only PARP inhibitor to be approved by the FDA for this indication. The approval was based on the encouraging objective response rate and duration of response data from two multi-center, single-arm, open-label studies.
Continued approval in this indication will depend upon the verification and description of Rubraca’s clinical benefit in confirmatory studies. Several studies on Rubraca, targeting different types of advanced ovarian cancer patient populations, are currently underway. While the ARIEL3 maintenance confirmatory study has completed enrollment, that in the ARIEL4 treatment confirmatory study is ongoing. An approval would give Rubraca access to a broader advanced ovarian cancer patient population.
The FDA concurrently approved Foundation Medicine, Inc.’s FMI FoundationFocus CDxBRCA companion diagnostic to help identify patients eligible for treatment with Rubraca. Clovis had collaborated with Foundation Medicine to co-develop the companion diagnostic test.
Clovis is currently working on the launch of Rubraca. Since Rubraca is the first approved product in Clovis’ portfolio, its successful commercialization will significantly boost the company’s top line. Rubraca has bright prospects given the immense commercial potential in the target market and tremendous demand for PARP inhibitors.
Meanwhile, Rubraca is under review in the EU for a comparable ovarian cancer treatment indication.
Clovis is also looking to develop Rubraca for a variety of solid tumor types including breast cancer and prostate cancer.
We expect investors focus to remain on the commercialization and sales ramp-up of Rubraca.
The Zacks Rank #3 (Hold) company’s 2016 loss estimates have been stable over the last 60 days. For 2017, however, the same narrowed from $4.31 to $4.25 over the same time frame.
Clovis Oncology, Inc. Price and Consensus
Clovis Oncology, Inc. Price and Consensus | Clovis Oncology, Inc. Quote
Stocks to Consider
A couple of better-ranked stocks in this industry include Anika Therapeutics, Inc. ANIK and Acorda Therapeutics, Inc. ACOR. While Anika is a Zacks Rank #1 (Strong Buy) stock, Acorda a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Anika’s earnings estimates for 2016 and 2017 were up 3.9% and 0.5%, respectively, over the last 60 days. The company recorded a positive earnings surprise in each of the last four quarters, the average being 33.14%. Its share price was up 31% in the past one year.
Acorda’s loss estimates narrowed from 82 cents to 40 cents for 2017 over the last 60 days. The company has recorded an average positive surprise of 168.27%.
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