Janney Analyst Starts Clovis Oncology At Buy, Expects Regulatory Approvals Coming In 2016

• The share price of Clovis Oncology Inc (NASDAQ: CLVS) has appreciated 7.57 percent in the last month, after having fallen 70.08 percent over the past three months.
• Janney’s Roy Buchanan has initiated coverage of the company with a Buy rating and fair value of $50.
• Buchanan expects the company’s two lead oral cancer drug candidates to be approved and capture significant market share once they are launched.

Analyst Roy Buchanan mentioned, “We are particularly excited by the opportunity in the PARP inhibitor rucaparib, as we think the market is mostly overlooking this candidate.”

Clovis Oncology is expected to provide important data updates in early to mid-2016 on both its lead candidates, while regulatory approval for both is expected by 2H16.

One of the company’s lead oral cancer candidates, rociletinib, is scheduled for approval by 2H16 in the U.S. and Europe for a specific type of second line non-small-cell lung cancer.

According to the Janney report, “The company has followed an aggressive approval path for both rociletinib and rucaparib and we expect data updates in 2016, both clinical and regulatory for each agent, to continue to drive shares.”

There has been some debate in recent times regarding rociletinib’s regulatory path, with the FDA requesting for confirmed responses to the drug and management disclosing the data in mid-November.

However, Buchanan stated that “CEO Mahaffy is by far the largest individual shareholder, and we imagine he will do what he thinks best for shareholders in the long run.”