Clovis More Than Halves on FDA Hurdle

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Clovis Oncology Inc. (NASDAQ: CLVS) was leading the bears in Monday’s trading session on news that its lung cancer drug may be delayed. This was announced in the company’s most recent update on rociletinib.

The company announced that during its regularly scheduled Mid-Cycle Communication Meeting held last week with the U.S. Food and Drug Administration (FDA), the agency requested additional clinical data for use in the efficacy analysis for both the 500 mg and 625 mg BID dose patient groups for rociletinib. The company will provide this information in a major amendment to the FDA by close of business Monday.

The current confirmed response rate in the 500 mg group is 28%, and 34% in the 170 patients in the 625 mg dose group, with an encouraging duration of response in both doses. The most frequent reasons that patients’ responses were not confirmed in a subsequent scan were due to progression, often due to brain metastasis, and due to subsequent scans not demonstrating tumor shrinkage greater than 30%.

Perhaps the most important part of this story is that Clovis anticipates that the review of this additional information will result in a delay of a potential approval. This additional review could lead to an extension of its March 30, 2016 Prescription Drug User Fee Act (PDUFA) date.

In simpler terms, the FDA is asking for more information, and when this is the case investors generally do not respond well.

Patrick J. Mahaffy, president and CEO of Clovis, said:

We remain confident in rociletinib and its potential to treat patients with mutant EGFR T790M-positive lung cancer. We will continue to work diligently with the FDA on our NDA submission.

Previously this company had a market cap of roughly $4 billion, while currently the market cap is just over $1 billion.

Shares of Clovis were trading down about 67% at $32.82, with a consensus analyst price target of $118.83 and a 52-week trading range of $27.56 to $116.75.

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