Clovis files for bankruptcy! The market value once exceeded 10 billion, and PARP inhibitors once called AstraZeneca

On December 12, Clovis Oncology announced that it had filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code and would seek to sell assets through a court-supervised sale process.

In court filings, Clovis estimated the company's assets to be between $100 million and $500 million, while liabilities were between $500 million and $1 billion. Data shows that in 2022, Clovis' stock price continued to fall by more than 93%.

The company's bankruptcy must have been problematic for years, but the "last straw" that killed Clovis may have been a further FDA request in the middle of last month to limit the use of its "rucaparib."

Rubraca is a polyADP-ribose polymerase (PARP) inhibitor that blocks DNA damage repair in cancer cells, resulting in toxic accumulation and ultimately the death of homologous recombinant repair (HRR)-deficient cancer cells.

In December 2016, Rubraca received its first accelerated FDA approval for the treatment of adult patients with ovarian epithelial carcinoma, fallopian tube carcinoma or primary peritoneal cancer who have previously received two or more doses of chemotherapy and carry harmful BRCA mutations (germline and/or somatic cells). In April 2018, the FDA further approved Rubraca for maintenance therapy in adults with recurrent ovarian epithelial carcinoma, fallopian tube carcinoma or primary peritoneal cancer who achieved complete or partial remission after platinum-containing chemotherapy, and transitioned Rubraca's first indication from accelerated approval to formal approval.

Rubraca was launched with a lot of expectations, not only Clovis, but the entire industry is confident in the market performance of this product. In the face of the world's first approved PARP inhibitor Lynparza (from AstraZeneca), which was launched in the early years, Rubraca is also "not afraid", and even has the momentum of latecomers. Under Rubraca's leadership, Clovis' stock price soared to $14.4 billion.

However, Rubraca's situation is getting worse due to the squeeze of market share by other competitors such as Zejula (from GSK), coupled with high sales costs and R&D expenditures. In 2021, Rubraca's sales performance was only $148 million, which basically covered the normal operation of the commercialization team.

To add insult to injury, successive retreats from Rubraca's indications gradually crushed Clovis. In April, the EMA initiated a review of Rubraca, following which the European Medicines Agency's Committee on Medicinal Products for Human Use (CHMP) recommended limiting the use of Rubraca. In June, due to safety concerns, the FDA decided to withdraw Rubraca as a third-line treatment for BRCA-mutant ovarian cancer.

The limitations of indications are directly reflected in sales performance. In the second quarter of this year, Rubraca's sales were $32.1 million, and third-quarter sales fell to $30.7 million, and Clovis was unable to make ends meet. To save costs, Clovis laid off 115 employees in early November to save the company about $29 million a year. Now, Clovis may have to use the money for something else.

In order to expand its revenue stream, Clovis has submitted an application for a supplemental new drug for Rubraca's first-line maintenance treatment of ovarian cancer, with a target review date of June 25, 2023, which will also end in nowhere.

Rubraca is the only product of Clovis to be commercially available, and its future ownership is undecided. For the company's pipeline FAP-2286, a radiotherapy candidate targeting fibroblast activating protein (FAP), Clovis also announced its buyer, Novartis, on the day it declared bankruptcy.

Under the terms of the sale, Novartis will receive basic ownership rights to FAP-2286. The transaction is an upfront payment of $50 million, and Clovis will receive an additional $334 million following a number of development and regulatory milestones. In addition, when FAP-2286 reaches certain sales milestones, Clovis will also receive $297 million. FAP is expressed in a variety of tumor types and is a promising target for cancer therapy. Clovis' previously released phase I clinical trial data showed that FAP-2286 showed high tumor uptake in a range of solid tumors and can be retained for a long time.

In addition to FAP-2286, Clovis is actively negotiating the sale of assets. These assets must be reviewed and approved by the bankruptcy court and subject to the bidding process approved by the bankruptcy court.

Under Chapter 11 of the U.S. Bankruptcy Code, Clovis has access to up to $75 million to continue operating during the bankruptcy proceedings. Financing is conducted through "debtor-held asset financing," an instrument available only to companies protected under Chapter 11 of the U.S. Bankruptcy Code.