Clovis Oncology Inc (NASDAQ:CLVS) has suddenly stepped into a spotlight in the biotech space once again following GlaxoSmithKline’s takeout of Tesaro (TSRO) for $5.1 billion early Monday morning – Clovis’s Rubraca is perhaps the only remaining major PARP inhibitor left on the market for the big pharma machine to gobble up now that Tesaro’s Zejula is off the market.
PARP inhibitors block an enzyme used by cancer cells for maintaining and repairing DNA damage. They are particularly in focus right now for treatment of ovarian and prostate cancers with a great deal of active R&D potential when combined with immunotherapy drugs. The real question for CLVS investors is about whether or not there are willing buyers for the company and whether or not CLVS wants to sell.
Clovis Oncology Inc (NASDAQ:CLVS) definitely has an incentive to market itself for sale, as we see it.
The company is moving toward potential insolvency on its current course, with about 24 months of life left. They are losing almost $300M per year with about $600M in cash and marketable securities left to burn, and that’s with 35% y/y sales growth.
That’s an unwinnable equation, and its why we have seen the stock grind lower over the past year. Tesaro was suffering from some of the same issues. But investors there just made a mint, with shares rising in value from $26 to $73 in 11 days as the value of the PARP inhibitor technology for major development and marketing plays in the mega-cap pharma space manifested itself in the form of a major multi-billion dollar acquisition.
That combination is hard to miss when it comes to corporate strategy.
In the grand scheme, the company is last to the race in the PARP space and has shown the slowest sales growth curve. But there is probably room at the table especially given the potential to move along a combinatorial development line for new indications with immunotherapy pairings.
That suggests the company may have potential willing buyers, but one should likely not expect quite the same premium seen for Tesaro.
At the end of the day, we would assume the company is motivated to walk through an exit door if one comes concretely onto the radar.
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 (NASDAQ:CLVS) managed to rope in revenues totaling $22.8M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top-line growth of 35.4%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($604.4M against $76.5M).