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What happened

Shares of Clovis Oncology (NASDAQ:CLVS), a cancer-focused drug developer, were up by more than 15% as of 12:15 a.m. EDT, after the company received some news from the U.S. Food & Drug Administration related to its most recent drug submission. 

So what

Clovis Oncology disclosed in a SEC filing today that the FDA is not planning an advisory committee meeting to discuss the company's New Drug Application, or NDA, for rucaparib. Rucaparib is a PARP inhibitor that Clovis recently submitted for approval as a treatment for ovarian cancer. The FDA officially accepted rucaparib for priority review just a few weeks ago.

It's a common practice for the FDA to schedule a meeting with a panel of outside experts to gain insight into whether a drug should be approved. Today's news that the FDA has chosen to forgo this step has some traders believing the drug's chances of winning the green light are even better than they were yesterday, which is why shares are moving higher today.

Now what

The FDA had already assigned rucaparib a PDUFA date of February 23, but today's news could hint that the agency might be willing to make an approval decision at an earlier date. If so, it could be a huge, huge win for Clovis, as peak sales estimates for rucaparib are currently running in the billion-dollar range. That's quite a figure for a company that's currently valued at just over a billion dollars itself.

It's possible that today's news could also catch the attention of big pharma companies looking to beef up their exposure to the oncology space. After all, we recently saw pharma giant Pfizer shell out $14 billion to acquire Medivation (NASDAQ:MDVN), in part to get its hands on that company's own PARP inhibitor, talazoparib. Talazoparib is being researched as a treatment for breast cancer, not ovarian cancer, so the two drugs wouldn't compete if they both wind up winning over regulators. But the acquisition does show that big pharma is keeping a close eye on development in the space.

Of course, it's also worth remembering that Clovis has a checkered history with the FDA, so success is still far from guaranteed. Thus, while I'm certainly encouraged by today's news, I'd just be keeping Clovis stock on my radar until we have an official ruling in hand.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.