Skip to main content
Premium Trial:

Request an Annual Quote

Clovis Oncology Reduces Workforce, Considers Bankruptcy

NEW YORK – Clovis Oncology on Wednesday reported in a 10-Q filing with the US Securities and Exchange Commission that it laid off 115 employees earlier this week and is considering filing for bankruptcy.

The Boulder, Colorado-based company also said that it increasingly looks like the firm will not be able to raise additional capital like it had hoped to, which will make it difficult to maintain operations beyond the start of next year. "We require significant cash resources to execute our business plans," the company said in the filing. "Based on our current cash and cash equivalents, together with current estimates for revenues to be generated by sales of Rubraca, we will not have sufficient liquidity to maintain our operations beyond January 2023."

In the third quarter of 2022, revenues attributable to Rubraca (rucaparib), the company's only marketed drug, decreased 19 percent to $30.7 million compared to $37.9 million in Q3 2021, falling short of the consensus Wall Street expectation of $33.2 million. Clovis ended the quarter with $58.3 million in cash and cash equivalents. "It appears increasingly unlikely that additional funding will be available on acceptable terms or at all outside of a Chapter 11 bankruptcy process," the company said in the filing.

Currently, Rubraca is approved in the US as a second-line maintenance treatment for recurrent ovarian cancer after patients have responded to platinum-based chemotherapy. Rubraca is also approved for BRCA1/2-mutated metastatic castration-resistant prostate cancer that is unresponsive to surgery or testosterone-lowering drugs.

The company has attributed the reduction in Rubraca sales in past quarters to fewer ovarian cancer patients being diagnosed and starting treatment during the COVID-19 pandemic and greater use of PARP inhibitors in the first-line metastatic ovarian cancer setting. Rubraca competes in a crowded PARP inhibitor market with AstraZeneca's Lynparza (olaparib) and GlaxoSmithKline's Zejula (niraparib). On top of this, Clovis has had regulatory setbacks with Rubraca that has placed the company under economic hardship.

Clovis earlier this year stopped marketing Rubraca in the US and EU as a third-line treatment for BRCA1/2-mutated metastatic ovarian cancer based on the lack of a survival advantage seen in the Phase II ARIEL trial. The US Food and Drug Administration had granted accelerated approval to this indication a few years ago, and the data were necessary to achieve full approval.

Even though the company had hoped to seek approval for Rubraca as a treatment for first-line biomarker-unselected ovarian cancer based on data from the ATHENA-MONO trial, the FDA recommended Clovis wait until the overall survival data reads out in that study. On Nov. 4, the firm received a letter from the FDA in which the agency said it had accepted the firm's supplementary new drug application for Rubraca in this first-line setting, but based on current overall survival trends in the trial, "there may be potential harm for patients in certain sub-groups."

Despite the overall survival data being immature and patients on Rubraca seeing a progression-free survival benefit, the agency indicated in the letter that a potential progression-free survival improvement may not be sufficient to balance the toxicity patients could experience with the drug.

"Given the recent regulatory developments that may have significant impact on current revenues and the commercial potential of Rubraca and the continuing challenges we face in raising additional capital, including as a result of the uncertain market potential of Rubraca, a potential bankruptcy filing in the very near term looks increasingly probable as a way to preserve the value of our business and assets for the benefit of our stakeholders," the company said in the 10-Q filing, adding it is continuing to evaluate strategic and financing options with creditors and other parties.

The firm noted it has engaged financial, restructuring, and legal advisers who can guide the firm on strategic alternatives to manage its liquidity and capital structure.

During Q3 2022, Clovis recorded a net loss of $56.0 million, or $.39 per share, compared to $67.4 million, or $.56 per share, in the year-ago quarter. On average, analysts had expected a loss per share of $.41.

Clovis expects to save approximately $29 million per year due to the layoffs, minus the one-time severance costs of $4.0 million, but the firm noted that the impact of these cost savings won't be realized until next year. The company said it also has reduced discretionary R&D and selling, general, and administrative costs during the quarter.

The company reduced R&D expenses by 33 percent to $30.8 million in Q3 2022 compared to $46.2 million in Q3 2021. During the same period, selling, general, and administration expenses declined 6 percent to $30.4 million from $32.2 million.