Clovis Oncology Inc (CLVS) PARP Product Will Not Be Hit by AstraZeneca’s FDA Approval: J.P. Morgan


The FDA approved this morning a new indication for AstraZeneca’s (NYSE:AZN) ARP inhibitor Lynparza. The new indication is for use in patients with recurrent ovarian cancer who have responded to platinum-based chemotherapy.

That raises the question, should Clovis Oncology Inc (NASDAQ:CLVS) investors be worried?

Analyst Cory Kasimov of J.P. Morgan believes that investors should not be overly concerned by competitor products, opining that Lynparza impact will be limited and that Clovis’s own brand will also reach FDA approval.

The analyst commented: “The label is broad (identical to Zejula) and relatively in line with our expectations given available data and recent company commentary, but this was clearly a source of some debate among investors in recent weeks. We believe fears of the competitive impact of a broad label are misplaced, but together with broader investor concern over a persistent lack of industry M&A have clearly conspired to weigh on shares. Bottom line, we assume that there will be enough room for multiple PARP inhibitors (we aren’t aware of people modeling a substantially smaller share for Lynparza), and as such, this event should not fundamentally alter the outlook for any of the market participants. If anything, the FDA’s willingness to grant such a broad label based in part on Phase 2 (Study 19) data reinforces our confidence that Rubraca will achieve a similar outcome.”

Furthermore, Kasimov believes that “CLVS has produced more robust data” than did Lynparza. The analyst underscores the limited number of patients tested in Phase 2 compared to ARIEL3 or NOVA and the “ambiguity in the Lynparza label regarding interchangeability of dosage forms”, which can potentially cause confusion on the wider market.

Phase 2 of Lynparza off of which the FDA made its approval. The analyst underscores the limited number of patients tested in Phase 2 compared to ARIEL3 or NOVA and the “ambiguity in the Lynparza label regarding interchangeability of dosage forms”, which can potentially cause confusion on the wider market.

The analyst maintains an Overweight rating on CLVS without suggesting a price target. (To watch Kasimov’s record, click here)

Out of the 9 analysts polled by TipRanks (in the past 3 months), 7 rate Clovis stock a Buy, while 2 rate the stock a Hold. With a return potential of 57%, the stock’s consensus target price stands at $112.33.

 

 

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