Investment bank SVB Leerink on Monday downgraded Clovis Oncology (CLVS) after poring over the latest clinical trial results reported by the biotech's competition. On Friday, AstraZeneca (AZN -2.13%) and Merck (MRK -1.30%) reported positive results from a study of Lynparza involving that same type of prostate cancer patients Clovis would like to treat with a similar drug, Rubraca.  

In a tight spot

Rubraca is Clovis Oncology's lead drug, but its sales as an approved treatment for certain ovarian cancer patients have been disappointing since its launch in 2016. During the last three months of 2019, Rubraca sales grew to an annualized $157 million which isn't nearly enough to cover operating expenses that climbed to an annualized $524 million over the same period. 

Hospital patient

Image source: Getty Images.

The company finished 2019 with $297 million in cash on its balance sheet, which the company expects will be enough to take it into the second half of next year. However, Clovis's estimate includes sales that might not happen thanks to Lynparza's recently reported overall survival benefit.

The FDA is reviewing an application for Rubraca to be used as a prostate cancer treatment for patients with BRCA-mutant tumors. Unfortunately for Clovis, the FDA's also reviewing an application from AstraZeneca and Merck to treat prostate cancer patients with BRCA mutations, plus additional mutations.

In a clinical trial supporting AstraZeneca's application, Lynparza showed a statistically significant overall survival benefit when compared to standard care. Unless Rubraca demonstrates equally positive survival results, there's a chance the FDA won't approve it to treat prostate cancer. And even if Clovis receives a green light, it could find competing with two pharmaceutical giants for this patient group nearly impossible.