Please ensure Javascript is enabled for purposes of website accessibility

Positive Prostate Cancer Results for Lynparza Are Bad News for Clovis Oncology

By Cory Renauer – Apr 27, 2020 at 1:17PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Strong clinical trial results from AstraZeneca and Merck just made it harder for Clovis Oncology to reach profitability.

Investment bank SVB Leerink on Monday downgraded Clovis Oncology (CLVS 0.00%) after poring over the latest clinical trial results reported by the biotech's competition. On Friday, AstraZeneca (AZN 0.41%) and Merck (MRK -0.40%) 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.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Clovis Oncology, Inc. Stock Quote
Clovis Oncology, Inc.
CLVS
$1.05 (0.00%) $0.00
Merck & Co., Inc. Stock Quote
Merck & Co., Inc.
MRK
$85.84 (-0.40%) $0.34
AstraZeneca PLC Stock Quote
AstraZeneca PLC
AZN
$53.24 (0.41%) $0.22

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
327%
 
S&P 500 Returns
105%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.