Shares of Clovis Oncology (CLVS) are trading higher on Friday after the company reported financial results from the fourth quarter of 2013 and discussed the development of its pipeline after Thursday’s closing bell. Investors were clearly more impressed with the advancement of Clovis’s drug candidates than they were worried about widening losses as the company still has a stack of cash and equivalents to work towards New Drug Applications.
For the quarter ended December 31, the Boulder, Colorado-based biotech reported a net loss of $29.2 million, or 92 cents per share, compared to a net loss of $21.1 million, or 81 cents per share, in the year prior quarter. For all of 2013, the net loss was $84.5 million, or $2.95 per share, versus $74.0 million, or $2.97 per share, for the year earlier.
Clovis has yet to generate any revenue.
Expenses in general grew last year as the company spent more on developing lung cancer drug CO-1686, rucaparib for ovarian cancer and lucitanib for breast cancer. Research and development costs expanded from $18.3 million in fourth quarter of 2012 to $22.5 million last quarter and from $58.9 million to $66.5 million for the comparative years.
At the end of 2013, Clovis had $323.2 million in cash and cash equivalents, with an expected burn rate of $120 million for 2014.
The company is developing PARP inhibitor rucaparib for the treatment of platinum-sensitive, ovarian cancer patients with specific mutations for which other cancer drugs have failed. Rucaparib is currently being evaluated in a phase 2 trial (ARIEL2) and phase 3 trial (ARIEL3), with plans to initiate a phase 2 study of the drug in pancreatic cancer patients within the next four months.
Lucitanib, an oral drug acting through several growth factor receptor pathways, is in a phase 2 targeting breast cancer patients with FGF aberrant genes. Clovis agreed to a $420 million deal to acquire Italy-based Ethical Oncology Science to gain control of lucitanib in November. French drug maker Servier has its hands on lucitanib as well, licensing rights to the drug outside of the U.S., Japan and China from Ethical Oncology in 2012. On that point, if all the milestones are met in the Ethical/Servier pact, Servier will be required to pay Clovis up to $470 million.
Any excitement from those two drugs aside, investors are also jazzed up over CO-1686, a novel oral inhibitor of the epidermal growth factor receptor (EGFR) in development for non-small cell lung cancer. Early trials have shown the drug shrink tumors more than 10 percent in the vast majority of patients, including those with the T790M resistance mutation that presents a great challenge in NSCLC patients.
Moreover, there hasn’t been any evidence of tyrosine kinase inhibitor-related rash or diarrhea that is commonly seen as a side effect of these types of therapies. The company said that any dose-limiting toxicity because of hyperglycemia is easily managed. The lack of severe side effects and the fact that CO-1686 is the only EGFR-focused therapy to not damage wild-type EGFR – whether approved or in the clinic – could give the novel drug candidate an upper hand in the long run.
Amongst other things, Clovis is currently enrolling two phase 2 expansion cohorts in its phase 1/2 trial of CO-1686 in EGFR mutant patients with the T790M mutation that have progressed after one TKI therapy. The company expects to initiate three registration studies in its TIGER program in the first half of 2014.
Amid a dose of updates, Clovis president and CEO Patrick J. Mahaffy summed things up simply in one sentence: “This has been a period of rapid progress for our company that we hope will lead to our first New Drug Application (NDA) submission in 2015.”
Investors generally cheer hearing the acronym “NDA” for a novel drug in a massive market from a company with no FDA-approved drugs to date. A net loss will almost always take the back seat and this was the case today with shares of CLVS rising more than 10 percent to hit a record intraday high of $88.99.
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