UPDATE: Chardan Capital Markets Starts Clovis Oncology (CLVS) at 'Sell' With Price Target of $15
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(Updated - October 25, 2016 8:28 AM EDT)
Chardan Capital Markets initiated coverage on Clovis Oncology (NASDAQ: CLVS) with a Sell rating and a price target of $15. Analyst Madhu Kumar doesn't think rucaparib will achieve accelerated approval given lack of efficacy over current treatments and its safety signals.
"In spite of rucaparib's Breakthrough Therapy Designation by the FDA, we initiate coverage with a conviction Sell rating on the belief that rucaparib will not achieve accelerated approval. This belief is based upon our view of clinical data for rucaparib, presented on 7 October 2016 at the European Society for Molecular Oncology (ESMO) 2016 Congress, relative to data in the labels of two currently approved ovarian cancer therapies," said Kumar.
Discussing efficacy, the analyst said, "While appearing different, we emphasize that neither difference is statistically significant. To us, the lack of statistical significance is important, since statistical significance is likely to drive the regulatory decision, particularly when using subsets of data in the absence of a randomized, controlled trial. This belief is reinforced from recent commentary from FDA Director of the Office of New Drugs, Dr. John Jenkins, who declared 'randomized controlled clinical trials represent the fastest way to determine if a drug is effective' and that drug developers should 'randomize as early as possible in development to avoid potentially misleading and uninterpretable findings from open-label trials.' In addition, while consensus has focused on comparing rucaparib to Lynparza in the third-line setting, we believe that AP is the relevant comparator in this setting to the regulator since, during the initial NDA review for Lynparza, the FDA specifically argued that Lynparza's failure to show a superior response to AP in the third-line setting meant '[a]ccelerated approval of olaparib [Lynparza] for earlier lines of therapy would not be appropriate as a meaningful therapeutic benefit over existing treatments has not been demonstrated.' Taken together, these comparisons indicate to us that rucaparib has not demonstrated a significant clinical benefit over the most relevant comparator drugs in ovarian cancer."
Kumar also thinks rucaparib has multiple higher adverse event rates relative to approved ovarian cancer drugs.
Shares of Clovis Oncology closed at $32.31 yesterday.
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