Clovis Oncology Inc (NASDAQ:CLVS)’s drug candidate for ovarian cancer, rucaparib, will not be subjected to FDA advisory committee review, the company disclosed in a regulatory filing. Shares of Clovis shot up when the news entered the market, but what exactly does it mean?
Better chances of approval
The FDA typically convenes a meeting of outside experts to advise it on whether or not a drug candidate that has issues should be approved. The regulator has typically followed the recommendations of its advisory panel but it doesn’t have to.
In the case of Clovis, skipping outside panel review of rucaparib suggests that the FDA has not found any issues with the drug that would require outside opinion. As such, forgoing the advisory committee review should not only shorten the review process of the drug candidate, but also indicates that the candidate stands a much better chance of approval than when outside experts were called to weigh in on its fate.
Clovis’ rucaparib seems to be winning favors with the FDA considering that the regulator last month granted priority review status to its NDA. The FDA has set for itself Feb. 23 as the deadline to make a final decision on whether or not to approve the drug for treating ovarian cancer patients. It is worth pointing out at this juncture that Clovis’ rucaparib belongs to the class of drugs called PARP inhibitors.
Besides Clovis, the other companies developing PARP inhibitor drugs are Tesaro Inc (TSRO) and Medivation. Except for Tesaro, Medivation is working on a PARP inhibitor targeting breast cancer treatment. Pfizer (PFE) is in the process of swallowing Medivation for $14 billion.
Delaying payment to Pfizer
Clovis also has a partnership arrangement with Pfizer and it recently said that it would delay some milestone and royalty payments to Pfizer to allow it build a strong resource reserve. The company pushed back payments to Pfizer by 18 months and said it would raise the payout amount as a compensation for delaying it.
Analysts estimate that peak sales of Clovis’ rucaparib could be in the multibillion-dollar territory.
Clovis Oncology closed its day at $28.01 after surging 15.03% in yesterday’s close.