Clovis Shares Reiterated As A Sell Following 10% Rally

AstraZeneca plc (ADR) AZN on Tuesday presented positive Lynparza results in ovarian cancer maintenance. This raises competitive risks for Clovis Oncology Inc’s CLVS Rubraca, which is currently in the phase III ARIEL3 maintenance study, Chardan Capital Markets’ Madhu Kumar said in a report.

Madhu reiterated a Sell rating for Clovis, with a price target of $36.

Increased Competition

Clovis is expected to present top-line results from Rubraca’s phase III ARIEL3 maintenance study in mid-2017.

“While we understand that success for a second PARPi in the setting of ovarian cancer maintenance therapy arguably further de-risks PARPi as a class in the indication, this de-risking needs to be balanced by the competitive pressures generated by multiple effective PARPis in the ovarian cancer space,” Madhu wrote.

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Moreover, positive results for competitors in the second-line maintenance setting exerts pressure on Rubraca's approved indication of third line or later therapy. The analyst added that the positive SOLO-2 result presented by AstraZeneca “raises the possible risk” of ARIEL3 failing in an absolute or relative sense.

Although Rubraca is being tested for another major indication, that of metastatic castrate-resistant prostate cancer, there are several PARPi competitors in development in combination with AR [androgen receptor] inhibitors, Madhu noted.