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Clovis tumbles on pancreatic cancer drug failure

NEW YORK (AP) -- Shares of Clovis Oncology Inc. plunged Monday after the company said its drug CO-101 failed in a clinical trial as a treatment for pancreatic cancer.

THE SPARK: Clovis said patients who were treated with CO-101 did not live any longer than patients who were treated with gemcitabine, an older cancer drug. Both groups of patients lived for about six months after the start of treatment. The company said it will suspend all development of CO-101 while it reviews results from the study.

CO-101 was the company's most advanced drug candidate.

THE BIG PICTURE: CO-101 is a form of gemcitabine, a drug that is sold by Eli Lilly and Co. as Gemzar. Gemzar lost patent protection in 2010. CO-101 is intended to treat tumors that are resistant to treatment with the standard version of gemcitabine. The trial was designed to compare CO-101 and gemcitabine as primary treatments for pancreatic cancer that had metastasized. Clovis is also studying the drug as a secondary treatment for the disease and as a treatment for non-small cell lung cancer.

The Boulder, Colo., company was also developing a diagnostic treat to identify patients who would benefit from treatment with CO-101.

Clovis is also running early-stage studies of a drug called CO-1686 as a treatment for non-small cell lung cancer and another drug called rucaparib as a treatment for ovarian and breast cancers. It is also studying diagnostic tests to go along with those products.

Clovis said it expects to end 2012 with about $140 million in cash.

SHARE ACTION: Clovis stock dropped $7.49, or 34.9 percent, to $14 in midday trading. That took the shares to their lowest price since early August. Clovis completed its initial public offering in November 2011, selling 10 million shares for $13 each. The stock traded as high as $27.55 in March.