Doog's Dugout

[umiak]

This morning Clovis Oncology Inc (NASDAQ: CLVS) announced that the FDA has requested additional clinical data for use in the efficacy analysis for both the 500mg and the 625mg BID dose patient groups for rociletinib for the treatment of mutant EGFR T790M-positive lung cancer. The company indicates it will “provide this information in a Major Amendment to the FDA by close of business today.”

The company “remains confident in rociletinib and its potential to treat patients with mutant EGFR T790M-positive lung cancer,” said Patrick J. Mahaffy, President and CEO of Clovis Oncology. While the company expects to provide the additional information requested to the FDA today, it anticipates a delay in potential approval beyond the company’s March 30, 2016 Prescription Drug User Fee Act (PDUFA) date.

During early morning trading, the company saw its share price trimmed by 65%-70%. While we believe there will be a potential delay of approval by the FDA, and AstraZeneca’s Tagrisso will be first to market, we believe this share price decline is a major over-reaction due in part to volatility in the market from macroeconomic forces. At these prices, we are buyers of CLVS, with a $52.50 price target.