Clovis Oncology: Best In Class

Summary

• From the fundamental front, Rubraca is procuring about $147.0M in annual sales even as a second-line drug. That robust growth is powered by a 38.7% year-over-year sales growth.
• Not satisfied with good, Clovis is advancing Rubraca into the first-line drug indication for ovarian cancer with Bristol-Myers Squibb's Opdivo. I strongly believe the results will trump competitors.
• That aside, Rubraca has the best data among competing drugs for prostate cancer with BRCA mutations. And, the upcoming label expansion will boost Clovis' true worth by multiple folds.

When it's raining gold, reach for a bucket, not a thimble. - Warren Buffett

If you've been following my work, you'd notice that Clovis Oncology (CLVS) is one of the most groundbreaking stories in late 2019. As we're heading into the New Year, the market is less concerned about the China Trade War and drug pricing concerns. As such, Phillip Fisher's growth equities like Clovis are embarking on mega rallies.

Despite the fact that investors took profits, Clovis still logged in 237.6% returns. In my view, the robust fundamental developments, coupled with a drastic change in market sentiment, powered the said phenomenon. Now my gut feeling (i.e. instinct) is telling me that there are more rallies ahead. In this article, I'll feature a deep-dive analysis into Clovis and share with you my forward expectations.

Figure 1: Clovis chart (Source: StockCharts)

About The Company

As usual, I'll present a brief corporate overview for new investors. If you are familiar with the firm, you should skip to the next section. Headquartered in Boulder, Colorado, Clovis is engaged in the innovation and commercialization of medicines to serve the unmet needs in cancer treatment. The company is currently focusing on ovarian, prostate, breast, and bladder cancers.

The flagship molecule, rucaparib (Rubraca) is FDA approved back in April 2018. As an oral, small-molecule inhibitor of poly (ADP-ribose) polymerase (“PARP”), Rubraca is marketed as second-line maintenance for recurrent ovarian cancer. Because it is a second-line drug, sales have been gradual. In my view, the most aggressive revenue growth occurs when Rubraca goes into first-line. That is to say, it'll become a blockbuster.

Figure 2: Therapeutic pipeline (Source: Clovis)

That aside, Clovis is assessing different combinations treatment of Rubraca either with immune checkpoint inhibitors and other drugs (lucitanib and rociletinib) for various cancers. Just recently, the firm in-licensed the rights to a

Analyst’s Disclosure:I am/we are long CLVS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

As a medical doctor/market expert, I’m not a registered investment advisor. Despite that I strive to provide the most accurate information, I neither guarantee the accuracy nor timeliness. Past performance does NOT guarantee future results. I reserve the right to make any investment decision for myself and my affiliates pertaining to any security without notification except where it is required by law. I am also NOT responsible for the actions of my affiliates. The thesis that I presented may change anytime due to the changing nature of information itself. Investment in stocks and options can result in a loss of capital. The information presented should NOT be construed as a recommendation to buy or sell any form of security. My articles are best utilized as educational and informational materials to assist investors in your own due diligence process. That said, you are expected to perform your own due diligence and take responsibility for your actions. You should also consult with your own financial advisor for specific guidance, as financial circumstances are individualized.