Weeks after a Pfizer/Merck KGaA breakdown, Clovis gambles on a $175M loan to finish a global PhIII PARP/PD-1 combo study
Clovis Oncology CEO Patrick Mahaffy $CLVS has engineered a risky gamble to pay for his big Phase III study combining his PARP Rubraca with Bristol-Myers Squibb’s Opdivo. He’s borrowing up to $175 million for his Phase III ATHENA trial, and he’s committed to paying back up to twice that amount for the cash runway.
“ATHENA is also our largest study, with a planned target enrollment of approximately 1000 patients,” Mahaffy noted, “which is expected to have a meaningful impact on our cash flow over the next few years.”
Here’s how it works:
Beginning at the end of Q2 of this year, TPG Sixth Street Partners will cover the trial costs in arrears and keep the money flowing up to the end of the first half of 2022, as Clovis hunts an approval for frontline maintenance of ovarian cancer. The loan covers expenses through to an approval or a failure of the study, at which point Clovis — which is recruiting patients in 25 countries for this study — will be on the hook to repay up to twice the amount it borrowed.
This move comes just weeks after Pfizer and Merck KGaA terminated their JAVELIN Ovarian PARP 100 study, combining talazoparib and Bavencio, after they determined that it wasn’t measuring up. That may not mean Clovis is taking on added risk, especially as Bavencio is starting to convince some observers it’s the worst of the PD-L1s.
So far AstraZeneca and Merck have been the dominant players in PARP, successfully expanding their first-to-market position for Lynparza while Pfizer, Clovis and now GSK (after the Tesaro buyout) play catch-up. Cutting ahead won’t be quick, or cheap or easy.
The deal underscores just how badly beat up Clovis’ shares have become, dropping 74% from the start of 2018.