Clovis: Wrapping UP 2013 Print E-mail
By Brian Wilson - Lead Contributor   
Wednesday, 11 December 2013 12:26
A little over two months after Clovis Oncology (NASDAQ: CLVS) failed to find a bid after shopping itself to large pharmaceutical companies, we see that the company is continuing the development of its drug pipeline. We warned investors about the optimistic valuation of Clovis when it was trading well above $70 & $80 per share after ASCO, although we believe that the danger has been largely diminished after the stock dropped and hit an approximate floor of $50/share. As predicted, large pharmaceutical companies did not look at Clovis at a >$2 B valuation due to the risk associated with an acquisition of that size for two Phase I/II assets.

Updated Financials

The company’s most recently 10-Q filing reveals the company’s financial data as of September 30th, 2013. We believe that this is one of Clovis’ strengths, because the company already has enough cash to complete Phase II for lead compound CO-1686. However, we believe that this recent equity raise is not going to be the last.

 The company had $357 M in cash, with no debt and an approximate quarterly burn rate of $16 M. We believe that this cash burn will be higher next year due to the larger expected R&D expense. There were 26 M shares outstanding, although this number is expected to change in the near future.

Quick Pipeline Review

CO-1686

A very potent EGFR inhibitor that produced exceptional early-stage trial data in non-small cell lung cancer. Seem usable in patients with T790M mutations (and l858R, del19), which usually disable the mechanism of action of other EGFR inhibitors. This drug is also highly specific for cancer cells, lowering the toxicity. Also note that the formulation of this drug is being changed to the hydrobromide salt tablet version, in the next clinical trial, which should reduce toxicity.

Rucaparib

PARP inhibitor that is a potent inhibitor of both PARP 1 and PARP 2. Certain cancers are sensitive to PARP inhibition, although Clovis is currently focusing on the ovarian cancer indication. Currently in two Phase II trials.

Lucitanib

Lucitanib is a dual inhibitor of FGFR1/2and VEGF, and has completed a Phase I/IIa trial. High response rates in patients with gene-amplified breast cancer suggest that the drug may should do well in Phase II trials. 

Mutant cKIT Inhibitor

A drug being developed under a collaboration agreement for a cKIT inhibitor that targets gastrointestinal stromal tumors (GIST). Currently a preclinical candidate.

 




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