Clovis Oncology Analyst Turns Bearish Ahead Of PDUFA Date For Rubraca

Despite optimistic expectations concerning label expansion for Clovis Oncology Inc's CLVS Rubraca to include prostate cancer, an analyst at BofA Securities is turning bearish on the stock. 

The Clovis Analyst

Tazeen Ahmad downgraded Clovis shares from Neutral to Underperform but maintained a $6 price target. 

The Clovis Thesis

The recent run in Clovis shares indicates a high likelihood of the FDA approving Rubraca in second line BRCA+ metastatic castration-resistance prostate cancer, or mCRPC, by the May 15 PDUFA date, Ahmad said in a Thursday note. (See the analyst's track record here.)

AstraZeneca plc's AZN competing PARP inhibitor — Lynparza — is also being reviewed for a potentially broader HRR+ label in second-line mCRPC, the analyst said. 

Assuming a 15% peak penetration in the U.S. BRCA+ market, BofA estimates peak non-risk-adjusted worldwide sales of $150 million for Rubraca in mCRPC.

Ahmad said he would also wait and see whether the COVID-19 pandemic will impact Clovis' early launch trajectory.

Once on therapy, Rubraca's oral dosing could prove helpful, the analyst said. 

A broader label for AstraZeneca to include ATM mutations could be perceived as favorable, especially among community-based doctors at the onset, he said. 

BofA models risk-adjusted peak sales of $579 million for Rubraca in 2028 across all indications.

"Upside risks are a faster-than-expected ramp from prostate indication on top of its ongoing ovarian launch as well as value from CLVS' pipeline."

CLVS Price Action

Clovis shares were trading 0.68% higher at $6.98 at the time of publication Thursday.

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