With the Nasdaq Biotechnology Index up 65% since the start of the year, it's clear that the biotech sector performed extraordinarily well in 2013-but which stocks were the biggest winners? Several small-cap and mid-cap biotech companies posted returns of 200% or more through the middle of December this year, and, in this series, I review the 15 biggest movers.

Let's continue this 2013 review with number 14 on the list, Clovis Oncology (CLVS). Investors weren't sure whether Clovis, which rallied 229% this year through the middle of December, would emerge from 2013 as an independent company.  Rumors swirled Clovis was seeking a buyer in September. But instead of getting acquired, it struck a $420 million deal to buy Ethical Oncology in November.

Expanding cancer drug pipeline

That deal gave Clovis Ethical's mid stage drug lucitanib and potential milestone payments tied to Ethical's pre-existing collaboration with French drug maker Servier.

Servier inked a deal with Ethical in 2012 to gain rights to lucitanib outside the U.S., Japan, and China. Clovis could stand to receive up to $470 million in milestones from Servier if lucitanib succeeds in trials. Clovis also benefits from a cost-sharing arrangement with Servier in which Servier will pay up to $108 million in development costs and then split any additional costs with Clovis.

Lucitanib showed a 50% response rate in breast cancer patients with FGF aberrant genes during a phase 1/2a trial. So Clovis expects to ramp development with an early focus on the 25% of breast cancer patients that have the FGF mutation.  If the drug eventually wins approval, it will join a host of oncology medications targeting specific genes related to breast cancer, including Roche's (RHHBY -1.23%) Kadcyla.  Roche won approval for Kadcyla in February for HER2 positive breast cancer  and analysts estimate Kadcyla could see peak sales of up to $2.5 billion a year.

The addition of lucitanib strengthens Clovis cancer pipeline, which includes rucaparib -- a PARP inhibitor drug in phase 2 trials for the treatment of ovarian cancer.  Following data showing 89% of ovarian cancer patients responded to rucaparib in a phase 1 trial, Clovis announced it will move the compound into late stage trials before year end.   That puts rucaparib slightly behind AstraZeneca's (AZN -1.22%) olaparib.  In September, AstraZeneca filed for approval of olaparib in Europe as a treatment for ovarian breast cancer patients with the BRCA gene mutation.

Clovis' pipeline also includes the early stage drug, CO-1686, which targets lung cancer.   In October, Clovis announced an agreement for Qiagen (QGEN 0.47%)  to develop a companion diagnostic test that can be used to identify those patients most likely to benefit from CO-1686. That agreement comes following Qiagen's previous success in developing tests identifying EGFR mutations using its Therascreen platform, including a companion diagnostic test used alongside colorectal drug Erbitux.

Fool-worthy final thoughts

Clovis plans to advance lucitanib as a treatment for non small cell lung cancer too, and thinks the drug may also prove valuable against kidney cancer and thyroid cancer.   That suggests Clovis may have a diverse pipeline of opportunities targeting breast, ovarian,  lung, kidney, and thyroid cancer.  According to the National Cancer Institute, over $37 billion was spent treating those conditions in the U.S. during 2010, suggesting investors ought to keep a close eye on Clovis trial results over the coming couple years.  

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