Shares of Clovis Oncology (CLVS 2.07%) tumbled as much as 11.8% today as investors nervously await the company's fourth-quarter and full-year 2019 earnings report after the market closes. The stock has been in a near-continuous fall for the last three years thanks to disappointing sales figures for its lead product, the oncology drug Rubraca. Only brief tailwinds, spurred by speculation the company could be a buyout candidate, have provided any relief.
Investors appear to be bracing for a disappointing update. While Clovis Oncology has already told investors that fourth-quarter 2019 revenue for Rubraca is expected to be between $38.3 million and $39.3 million, guidance for the year ahead is likely to be the focus of the earnings report.
As of 12:23 p.m. EST, the pharma stock had settled to an 11.5% loss.
To be fair to investors, Clovis Oncology has been a disappointment recently. In the third quarter of 2019, the company reported revenue of $37.6 million and an operating loss of $106 million. Preliminary fourth-quarter 2019 revenue suggests a similar operating loss was generated in the final period of last year.
The hinge point might be guidance for the year ahead. Wall Street is expecting full-year 2020 revenue of $200 million, according to numbers compiled by Yahoo! Finance. That would mark year-over-year growth of about 39%, which could be slightly optimistic.
Investors will also be eager to know how management is thinking of Rubraca's future. The drug earned priority review from the U.S. Food and Drug Administration (FDA) for advanced prostate cancer in mid-January. While that was a promising development in a potentially massive market opportunity, the excitement didn't last long. A few days later, AstraZeneca and Merck announced that Lynparza, the lead drug in the class that includes Rubraca, had also earned priority review in advanced prostate cancer.
Simply put, Clovis Oncology finds itself in a difficult position both financially and competitively. Investors aren't optimistic much will change after the next financial report.