Clovis Oncology Inc. (NASDAQ:CLVS) shares crashed 70% on Monday, after the U.S Food and Drug Administration announced that additional clinical data is required in order to determine the effectiveness of rociletinib, an experimental lung cancer drug. The FDA’s decision regarding the drug’s approval was anticipated on March 30th, yet, Clovis claims that the additional information needed is very likely to delay that date.
This selloff represents a loss of more than $2 billion for Clovis’s market cap, which was $3.8 billion on Friday before the market closed, and currently stands on $1.13 billion.
Adding fuel to the fire, last week the FDA has approved a competitive drug, Tagrisso (osimertinib), designed for a similar treatment purposes manufactured by AstraZeneca (NYSE:AZN), which, it seems, is more efficient than rociletinib.
Both rociletinib and AstraZeneca’s Tagrisso are meant to treat lung cancer with a mutation called T790M, and both are administered after patients’ EGFR-targeted therapy. Usually cancer therapies are approved by the FDA based on their impact on survival, also known as the overall survival rate, and of course on tumor shrinkage.
In the meanwhile, Clovis Oncology is also developing a potential ovarian cancer treatment rucaparib, and a breast-and-lung cancer drug lucitanib. As of right now the company is fully in development stage and has no products on the market.