Results

Clovis soars as a new round of PhIII Rubraca data looks promising — but roci scandal bites again with $142M settlement

Shares of Clovis Oncology soared 50% Monday morning, after the biotech reported a solid slate of progression-free survival data for its PARP drug Rubraca (rucaparib) that will help it line up right alongside rivals in the field, possibly eliminating an advantage held by Tesaro for access to a wider group of ovarian cancer patients.

Soon after the data hit, though, Clovis revealed in an SEC filing that it had tentatively reached a deal to settle a class action lawsuit brought by shareholders after Clovis’ disastrous setback on rociletinib, rejected by the FDA after questions arose about the dodgy data that had been circulated about that cancer therapy ahead of the FDA’s decision. The biotech is setting aside $142 million in cash and stock to settle allegations that it actively misled investors on roci. And Clovis also disclosed that it is under investigation by the SEC as well as the Justice Department over the roci case.

Rubraca, though, looks better than ever.

Investigators reported that the drug hit all three primary endpoints for progression-free survival in tumor BRCA-mutant, HRD-positive and overall intent-to-treat populations. It also hit a key secondary endpoint for an independent review of those results.

If it all holds up at the FDA, the data should pave the way to broader use of the drug, Clovis’ only marketed therapy. And it may well end up eating into Tesaro’s market share, a point that helped drive down its shares by 8% this morning.

Clovis says that it will file a supplemental application “within the next four months for a second-line and later maintenance treatment indication for all women with platinum-sensitive ovarian cancer who have responded to their most recent platinum therapy.”

The new data comes as market leader AstraZeneca, with Lynparza, lines up to compete with Clovis and Tesaro with comparable PARPs. It also adds pressure on Pfizer, which picked up a PARP in its $14 billion Medivation buyout, which continues to look like a heavily inflated price for the assets the pharma giant netted in the deal.

Leerink’s Michael Schmidt says he was impressed by Rubraca’s latest performance. He noted:

The results look particularly impressive when compared to previous competitor data and we think should support a broad label for Rubraca in a broad 2L maintenance patient population, independent of BRCA/HRD status and testing. We recently initiated coverage of CLVS with an OP rating (LINK). The top-line data reported this morning clearly reflect the best-case outcome for CLVS highlighted in our prior report indicating that efficacy of the 3 leading PARP inhibitors looks very comparable and we expect shares to trade up significantly. With best-case data in hand, we think CLVS should be a prime takeout candidate, and we reiterate our OP rating on the stock.

Over the last few weeks we’ve been treated to a number of stores about Tesaro’s auction to sell the company. As today’s news about the PFS data spreads, that could put a crimp on the high end of the market valuations being applied to its drug, Zejula.

Clovis, meanwhile, is finding it hard to put the roci scandal behind it. The biotech was forced to restate its data submitted for an approval of rociletinib, prompting an embarrassing and devastating drop in the number of responses that the biotech had claimed for their drug. An FDA panel subsequently rejected the drug, followed by a formal rejection by the agency, prompting Clovis to restructure and lay off staffers while burying roci as a loser. Shareholders filed dozens of lawsuits as a result, forcing the company to go on the defensive. Clovis had earlier noted in SEC filings that it was under federal investigation, but had not disclosed who was handling the probe.

“Based on these encouraging data, it is clear that rucaparib demonstrates a clinically meaningful impact in delaying disease recurrence in women in this trial with advanced ovarian cancer,” said Robert Coleman, the principal investigator for the ARIEL3 study. “The PFS and safety results achieved in this study are particularly promising, because they suggest women are able to stay on rucaparib for a prolonged period of time while gaining benefit. It is also clinically significant that rucaparib not only sustained the most recent response to platinum, but in some patients also enhanced that response, including the elimination of residual tumor.”


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