A month has gone by since the last earnings report for Clovis Oncology (CLVS). Shares have lost about 36.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Clovis due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Clovis Q2 Earnings & Sales Lag Estimates
Clovis 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 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.
Operating Expenses & Cash 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.
Clovis provided full-year guidance for product revenues. The company expects Rubraca to generate sales in the range of $137 million to $147 million in 2019.
How Have Estimates Been Moving Since Then?
Estimates review followed a downward path over the past two months. The consensus estimate has shifted -6.71% due to these changes.
Currently, Clovis has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Clovis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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