Clovis (CLVS) Q2 Wider than expected loss, revenue missed – August 8, 2022

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Clovis Oncology (CLVS Free Report) reported a net loss of 50 cents per share in the second quarter of 2022, lower than the year-ago loss of 61 cents.

The adjusted loss (excluding the $9.7 million non-cash adjustment of other manufacturing costs related to the scheduled expiration of Rubraca currently in stock) was 43 cents per share, higher than Zacks’ consensus estimate of a loss of 42 cents. In the prior year quarter, the company posted an adjusted loss of 61 cents.

Net revenue — entirely from Clovis’ only PARP inhibitor, Rubraca — fell 13% year-over-year to $32.1 million, missing Zacks’ consensus estimate of $37.8 million of dollars.

Quarter in detail

Rubraca’s US sales were $22.7 million, down 18.1% year-on-year. US non-market sales were $9.4 million in the second quarter, up 3.3% year-over-year. The decline in sales in the United States was due to the impacts of COVID-19, as fewer patients were being treated for second-line ovarian cancer amid the pandemic. Overall, Rubraca sales were also down 6% quarter over quarter.

For the second quarter, research and development expenses decreased 20% year-over-year to $36.4 million, primarily due to lower spending on clinical studies of Rubraca.

Selling, general and administrative expenses decreased 1% year over year to $32.6 million.

Clovis ended the quarter with $94.6 million in cash equivalents and available-for-sale securities, compared to $122.2 million as of March 31, 2022.

CLVS also faces the risk of a severe cash flow crisis. The company announced the need to raise additional capital to support its operations beyond February 2023. Clovis shares fell 12.1% in premarket trading on August 8 following the announcement.

The stock was down 38.8% during the year, compared to the industry’s 18.0% decline.

Image source: Zacks Investment Research

Pipeline updates

Label expansion studies on Rubraca

Rubraca is currently approved for the treatment of certain patients with ovarian and prostate cancer. Several label extension studies are underway on Rubraca.

The phase III ATHENA study is evaluating Rubraca as monotherapy and in combination with Bristol Myers‘ (BMY Free report) Opdivo for advanced ovarian cancer as first-line maintenance therapy.

In March 2022, Clovis reported the first positive data from the monotherapy arm of the ATHENA study (ATHENA-MONO), which met its primary endpoint of statistically significant progression-free survival (PFS) compared to placebo. Based on these data, CLVS intends to apply for label extension of Rubraca as a first-line maintenance treatment for ovarian cancer in the United States and Europe in Q3 2022. .

The first data from the combined arm of the ATHENA study (ATHENA-COMBO) are expected in the first quarter of 2023. The ATHENA study is part of a larger clinical collaboration with Bristol Myers, finalized in 2017. Opdivo is one of the Bristol Myers top line key engines. During the second quarter of 2022, Bristol Myers recorded $2.1 billion in Opdivo sales.

A confirmatory Phase III TRITON3 study is evaluating Rubraca in patients with metastatic castration-resistant prostate cancer (mCRPC) with tumors associated with BRCA mutations and ATM mutations. Data from this study is now expected in the fourth quarter of 2022, a one-quarter delay. This will serve as a confirmatory study for continued approval of Rubraca to treat mCRPC. It will also serve as a potential second-line tag expansion for Rubraca to treat mCRPC.

FAP-2286

Clovis is currently evaluating FAP-2286, its lead candidate peptide-targeted radionuclide therapy (PTRT) and imaging agent, in the LuMIERE Phase I/II study in multiple tumor types.

In June 2022, management reported initial data from the Phase I LuMIERE study, which showed preliminary evidence for the activity of FAP-2286 as a treatment and imaging agent across a broad spectrum solid tumors. The company intends to use this data to initiate the Phase II study in Q4 2022. CLVS is also currently recruiting participants in the third dose cohort of this study.

Management is currently engaged in discussions with potential partners to license development and commercial rights to FAP-2286. This will help the business meet its cash flow needs and continue to operate.

Zacks Ranking and Other Stocks to Consider

Clovis currently carries a Zacks Rank #3 (Hold). Other top-ranked stocks in the overall healthcare sector include Alkermes (ALKS free report) and Novavax (NVAX Free Report), each carrying a Zacks Rank #2 (Buy) at present. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Alkermes shares are up 10.8% this year so far. Alkermes’ estimates for 2022 have risen from a loss of 17 cents per share to a profit of 20 cents per share, while the consensus earnings estimate for 2023 has risen from 31 cents per share to 50 cents per share at the course of the last 30 days.

Alkermes has exceeded earnings estimates in each of the past four quarters, delivering an average earnings surprise of 325.48%, on average. During the last reported quarter, ALKS announced a surprise profit of 50.00%.

Novavax’s stock has plunged 57.9% this year so far. Novavax earnings estimates for 2023 have fallen from $10.43 per share to $10.62 per share in the past 30 days.

Novavax has missed earnings estimates in each of the past four quarters, delivering a negative earnings surprise of 184.49%, on average. In the last reported quarter, NVAX reported a negative earnings surprise of 23.12%.

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