Clovis Oncology Inc (NASDAQ:CLVS) shares are correcting a bit in recent action. The stock has been at the forefront of speculation about a possible takeout bid given its placement in the PARP space and GlaxoSmithKline’s high profile recent takeout of Tesaro (TSRO) for $5.1 billion.
CLVS shares briefly moved above the 50-day MA, but slipped again on Monday in broad-based market declines.
Clovis Oncology Inc (NASDAQ:CLVS) shares were quite strong on the TSRO buyout because, as we have detailed, investors are betting that someone else out there in the land of “Big Pharma” will want to own a developed PARP program given the promise shown thus far for the method.
A report emerged today (Monday) – on Bloomberg, no less – that one of the company’s key investors is beginning to push for the company to actively advertise itself to the market as “for sale”. Armistice Capital LLC is a hedge fund that owns a 9.8% stake in Clovis (and is therefore its second largest stakeholder).
As noted above, the key here is the fact that the company is one of the only remaining choices for big pharma players looking to get into the PARP inhibitor space.
If there is an interesting wrinkle here, it’s actually that the documents around the TSRO sale went public last week and revealed that the sale had little to do with its PARP asset or development program.
The documents show that the bulk of the companies/parties contacted throughout Tesaro’s review of alternatives were more interested in a royalty, licensing, or co-development partnership, rather than an outright acquisition.
As previously reported, Tesaro agreed to be acquired by GSK (GSK) for $75/share in cash earlier this month. Ahead of, and since that announcement, Clovis has been the at the forefront of M&A speculation.
Also worth recognizing that shares of Clovis are up nearly 70% since October. This obviously suggests a troublesome narrative.
That further suggests that Armistice is in a “strike while the iron is hot” mood at this point. Ultimately, as we see it, this is all about confidence.
As we noted in our last piece, the company has reason to have little confidence in its length of runway from a financial standpoint. We suggested at that time the very same thing that Armistice is suggesting now: Guys, strike while the iron is hot!
From the Top
Clovis Oncology Inc (NASDAQ:CLVS) bills itself as a biopharmaceutical company that focuses on acquiring, developing, and commercializing anti-cancer agents in the United States, Europe, and internationally.
Its commercial product includes Rubraca (rucaparib) tablet, a small molecule poly ADP-ribose polymerase inhibitor, used as monotherapy for the treatment of patients with deleterious BRCA mutation associated advanced ovarian cancer, who have been treated with two or more chemotherapies, and selected for therapy by an FDA-approved companion diagnostic for Rubraca.
The company’s product candidates include lucitanib, an oral inhibitor of the tyrosine kinase activity of vascular endothelial growth factor receptors, platelet-derived growth factor receptors alpha and beta, and fibroblast growth factor receptors; and rociletinib, an oral mutant-selective inhibitor of epidermal growth factor receptor.
It distributes its products primarily through specialty distributors and pharmacy providers to patients and health care providers. The company has license agreements with Pfizer Inc., AstraZeneca UK Limited, Advenchen Laboratories LLC, and Celgene Corporation; collaboration and license agreement with Les Laboratoires Servier; a clinical collaboration with Bristol-Myers Squibb Company; a partnership with Foundation Medicine, Inc; and a diagnostic collaboration with Myriad Genetics, Inc.
Clovis Oncology, Inc. was founded in 2009 and is headquartered in Boulder, Colorado.
Clovis Oncology Inc (NASDAQ:CLVS) pulled in sales of $22.8M in its last reported quarterly financials, representing top line growth of 35.4%.
In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($604.4M against $76.5M).