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Clovis (CLVS) Q2 Earnings & Sales Lag Estimates, Shares Down

Zacks Equity Research

Clovis Oncology CLVS incurred loss of $2.27 per share in the second quarter of 2019, wider than the Zacks Consensus Estimate of a loss of $1.70 and the year-ago loss of $1.94 per share.

Net revenues, entirely from Clovis’ only marketed drug, Rubraca, were approximately $33 million in the quarter, missing the Zacks Consensus Estimate of $34.9 million. The company had recorded total revenues of $18.5 million, entirely from Rubraca sales in the United States, in the year-ago quarter.

Shares of Clovis declined almost 15.9% on Aug 1, following the dismal results and sales guidance. The stock has plunged 50.6% so far this year compared with the industry’s decline of 0.4%.

Quarter in Details

Rubraca sales in the United States were up 3% sequentially to $32.7 million during the quarter. Ex-U.S. market sales were $0.3 million in the second quarter. Sales in ex-U.S. markets were down sequentially as large shipments were made in March to support launch in European markets, following label expansion in second-line setting in January. These shipments were recorded in first-quarter revenues. However, the company expects an increase in ex-U.S. sales in the third quarter.

In the second quarter, research & development expenses increased 34.2% year over year to $70.7 million, primarily due to increased expenses for label expansion studies on Rubraca. Selling, general and administrative (SG&A) expenses escalated 6.9% year over year to $48 million, reflecting increased activities to support commercialization of Rubraca in the United States as well as Europe.

The company expects R&D and SG&A expenses to be higher in 2019 due to ongoing clinical studies on Rubraca and to support launch of the same in approved indications in international markets.

Cash used in operating activities in the quarter was $98.9 million, lower than $110.2 million in the year-ago quarter. The company expects lower cash utilization for operating activities in the second half of 2019 due to anticipated reduction in product supply costs and milestone payments.

Clovis ended the quarter with $315.9 million of cash equivalents and available-for-sale securities compared with $460.8 million as of Mar 31, 2018.

2019 Guidance

Clovis provided full-year guidance for product revenues. The company expects Rubraca to generate sales in the range of $137 million to $147 million. The Zacks Consensus Estimate stands at $148.29 million.

Update on Rubraca

Clovis is planning to file a supplemental new drug application (sNDA) in the fourth quarter of 2019, seeking label expansion of Rubraca in advanced prostate cancer based on data from the TRITON clinical study program. In October, the company presented encouraging initial data from the phase II TRITON2 study evaluating Rubraca in metastatic castration resistant prostate cancer. The company expects to provide updated data from the study to the FDA later this month. A phase III TRITON3 study evaluating Rubraca in prostate cancer patients who have not received chemotherapy is currently enrolling patients.

The company has a collaboration with Bristol-Myers BMY to develop Rubraca and pipeline candidate, lucitanib, in combination with the latter’s PD-L1 inhibitor, Opdivo, for several cancer indications. The phase III ATHENA study evaluating Rubraca plus Opdivo as first-line maintenance treatment in advanced ovarian cancer is currently enrolling patients. Two phase II studies are evaluating the same combination in relapsed ovarian cancer and prostate cancer. Another phase II study is planned for the fourth quarter to evaluate a combination of Rubraca and Bristol-Myers’ Yervoy in patients with advanced gastric cancer. In May, the company entered into a clinical trial financing for up to $175 million to support ATHENA study.

Several early-stage and exploratory studies are evaluating Rubraca as monotherapy or as combination therapy in several solid tumors. Apart from Rubraca, the company is also developing a tyrosine kinase inhibitor, lucitanib, in combination with PD-1 inhibitors or PARP inhibitors for multiple indications. The company has a preclinical research collaboration with Alkermes ALKS to evaluate the latter’s ALKS 4230 in combination with lucitanib as well as Rubraca.

Clovis Oncology, Inc. Price, Consensus and EPS Surprise

 

Clovis Oncology, Inc. Price, Consensus and EPS Surprise

Clovis Oncology, Inc. price-consensus-eps-surprise-chart | Clovis Oncology, Inc. Quote

Zacks Rank & Stock to Consider

Clovis currently has a Zacks Rank #4 (Sell).

Axovant Sciences Ltd. AXGT is a better-ranked stock in the biotech sector, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Axovant’s loss estimates have narrowed from $7.00 to $5.34 for 2019 and from $6.48 to $3.59 for 2020 over the past 60 days.

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