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Clovis Crashes 70%, FDA Seeks More Data on Rociletinib

Clovis Oncology, Inc.CLVS shares touched a 52-week low of $26.05 on Nov 16 with the company saying that the FDA has asked for additional data for both the 500 mg and 625 mg twice daily dosage patient groups for analyzing the efficacy of its lead pipeline candidate rociletinib. Shares plummeted almost 70% on the news.

We note that rociletinib is currently under priority review in the U.S. for the treatment of patients suffering from mutant EGFR non-small cell lung cancer (NSCLC), who were previously treated with an EGFR-targeted therapy and have the EGFR T790M mutation.

What Led to the Share Price Slump?

In a Mid-Cycle Communication meeting held last week, the FDA highlighted that its efficacy analysis of the candidate will focus entirely on confirmed responses. The regulatory agency said that the new drug application for rociletinib contained immature data sets based on both unconfirmed and confirmed response rates. Moreover, as the studies on rociletinib were undergoing rapid enrollment, Clovis presented interim data both publicly and at medical meetings, which included a data set based mainly on unconfirmed responses. The regulatory agency further stated that this was also true when the company had submitted data for gaining Breakthrough Therapy designation.

Additionally, the FDA stated that the immature data sets were updated in the 90-day efficacy update that the company submitted at the end of October. With the efficacy data maturing, the number of patients with an unconfirmed response who converted to a confirmed response has been lower than expected.

Currently, the confirmed response rates for 625 mg (170 patients) and 500 mg (79 patients) dosing groups are 34% and 28%, respectively. However, the duration of response was found to be encouraging for both doses. The most common reasons for the lack of confirmation in a subsequent scan were progression (due to brain metastasis) and the failure to demonstrate tumor shrinkage greater than 30%.

As a result, Clovis now expects the review of this additional information to push out the FDA action date of Mar 30, 2016, thereby leading to a delay in the candidate's approval. Clovis had planned to launch rociletinib immediately in the U.S. upon receiving FDA approval. Timely approval would have allowed the company to start generating sales as early as next year.

Meanwhile, the candidate is also under accelerated assessment in the EU for the same indication. A decision can be expected in mid-2016 with launch thereafter slated for late 2016.

Our Take

Considering that Clovis has no approved product in its portfolio at the moment with rociletinib being the company's lead pipeline candidate, the latest development comes as a major blow for the company. Moreover, visibility on the length of delay to be faced by the candidate is low.

Meanwhile, AstraZeneca plc's AZN shares gained 4.8% on the news. AstraZeneca got a head start late last week when it gained accelerated approval in the U.S. for Tagrisso (80 mg once-daily) for the treatment of patients with metastatic EGFR T790M mutation-positive NSCLC, as detected by an FDA-approved test, and who have progressed on or after EGFR tyrosine kinase inhibitor therapy. This makes Tagrisso the only drug to be approved for metastatic EGFR T790M mutation-positive NSCLC.

With the delay in rociletinib's approval weighing on Clovis' prospects, Tagrisso could end up capturing a significant market share for this indication.

Clovis is a Zacks Rank #3 (Hold) stock. Better-ranked stocks in the health care sector include Actelion Ltd. ALIOF and Anika Therapeutics Inc. ANIK . Both carry a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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