What happened

Shares of Clovis Oncology (CLVS) were skyrocketing 41.9% higher at 11:12 a.m. ET on Friday. The huge gain came after the company reported the voting results on three proposals following the market close on Thursday.

Clovis' annual shareholder meeting was adjourned on June 9, 2022. This meeting was resumed on July 7 for shareholders to vote on proposals related to a 1-for-7 reverse stock split. Two of the proposals were not approved. A proposal to issue 4 million new shares was approved. However, the issuance was contingent upon the implementation of the reverse stock split, which won't be conducted as a result of the vote.

So what

The bottom line with Clovis' shareholder vote is that the stock won't be diluted further at this point. The stock would have likely fallen had the proposals passed. This wasn't good news for short-sellers, who were betting that Clovis stock would fall on the reverse stock split.

Nearly 29% of outstanding shares were sold short as of June 15, 2022. However, Clovis has been on a roll in recent weeks with positive clinical news and speculation that the company could be an acquisition target. This surge made a reverse stock split unnecessary for Clovis to retain its listing on the Nasdaq (NASDAQ: NDAQ) stock exchange.

Now what

The primary challenge for Clovis now is that sales of its only product, Rubraca, are declining. However, upcoming clinical data could improve the outlook for the drug.

Clovis expects to report results from a late-stage study of Rubraca as a second-line treatment for prostate cancer in the third quarter of 2022. It also anticipates results from a phase 3 study of Rubraca in combination with immunotherapy Opdivo as a first-line ovarian cancer maintenance therapy in the first quarter of 2023.