Clovis Oncology Analyst Turns Bearish Ahead Of PDUFA Date For Rubraca

Despite optimistic expectations concerning label expansion for Clovis Oncology Inc's (NASDAQ: 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 (NYSE: 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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