Is Now the Right Time to Buy Clovis Oncology (CLVS)?

April was not a good month for Clovis Oncology, Inc.’s (CLVS) stock. Shares tanked 28.2% last month as the company faces revenue woes and trouble with its latest drug application. Is now the right time to snatch up shares at a discount price, or should investors steer clear?

Clovis Oncology is a biopharmaceutical company that focuses primarily on developing cancer therapies. Rocilentinib, the company’s most developed candidate and a treatment for advanced cases of lung cancer, faced some resistance from the FDA. After being reviewed by an independent advisory committee, the panel felt there wasn’t enough data.

Last November, shares for the company plummeted after its application for the same drug was sent back for more data. The stock plummeted 71% not because the application was sent back, but because the company failed to mention that it had known about the drug’s lower confirmed response rate.

In its latest attempt, the committee essentially told Clovis to resubmit its application once it has controlled data.

Rather than moving forward, Clovis has decided to terminate any ongoing studies on rociletinib and withdraw its application in the EU. The company plans to reduce its staff by more than a third, so it can focus its resources on its remaining drugs.

While rocilentinib may not see the light of day, another drug from Clovis might. Rucaparib, a treatment for ovarian cancer, was given the designation of Breakthrough Therapy by the FDA. This designation is only given to drugs that show a potential to provide a better outcome than existing therapies, and it often accelerates the regulatory process.

Clovis is planning to complete an application for the drug in the current quarter, but given the company’s history, the potential for approval doesn’t look too promising. Clovis has a habit of withholding negative clinical data, which often lands the troubled biotech company is hot water.

While share prices may be low, investors may want to steer clear of Clovis. Another failed drug application may just drive this biotech company into the ground.

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Daniel Simmons