What happened

Shares of small-cap cancer company Clovis Oncology (NASDAQ:CLVS) gained a whopping 33.7% over the course of April, according to data from S&P Global Market Intelligence. Clovis' stock regained its footing last month for two overarching reasons. 

So what

First and foremost, Clovis' stock lost a noteworthy 15% of its value during March in response to the COVID-19 pandemic. As the company didn't announce any major hiccups in its commercial operations stemming from the public health crisis in April, bargain hunters apparently felt comfortable buying shares in the wake of this double-digit decline.

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Secondly, Clovis is set to receive the Food and Drug Administration's ruling on the label expansion for Rubraca as a treatment for advanced BRCA-mutant prostate cancer on May 15. As this indication could boost Rubraca's annual sales by several hundred million, and quite possibly transform the company into a cash-flow-positive operation within a few short years, it's not surprising to see Clovis' stock perk up heading into this long-awaited regulatory decision. 

Now what

Can Clovis' stock head even higher in the days and weeks ahead? It's hard to tell. A positive regulatory nod for Rubraca in advanced BRCA-mutant  prostate cancer would certainly help matters, but the company still needs to address its unsightly cash burn rate in order to win over long-term investors. In the most recent quarter, for example, Clovis reported a net loss of $99.3 million. That kind of burn rate is hard to justify for a company with a market cap under $700 million. In short, this biotech stock may struggle to print new highs until the company becomes cash flow positive on a consistent basis.