NEW YORK – Clovis Oncology said on Monday before markets opened that based on its current cash position and Rubraca (rucaparib) sales, it will need to raise additional capital to fund its operations beyond February 2023.
During the second quarter of 2022, the Boulder, Colorado-based company's only marketed product, the PARP inhibitor Rubraca, recorded revenues of $32.1 million, a 13 percent decrease compared to $36.8 million in Q2 2021, and below analysts' average expectation of $37.0 million.
The company reported a net loss during Q2 of $71.3 million, or $.50 per share, compared to a net loss of $66.4 million, or $.61 per share, in Q2 2021. Analysts had projected a net loss of $.41 per share.
For the three months ended June 30, Clovis held $94.6 million in cash and cash equivalents and working capital of $21 million. The firm also said it has $9.8 million in funds still available to draw down from Sixth Street Partners for the ongoing ATHENA trials, through which it is hoping to expand the indications of Rubraca and generate more revenue.
During a call to discuss the company's financials, Clovis CEO and President Patrick Mahaffy expressed disappointment that the company's stockholders in June did not approve a proposed reverse stock split of Clovis common stock, which would have increased the number of authorized shares of common stock that the firm could have issued. Without this approval, Clovis can't raise "meaningful additional capital through public or private equity-based offerings," the company said in a statement.
"We're currently exploring other strategies to allow for flexibility for future equity raises," Mahaffy said. "Our efforts to raise additional capital also include entering into strategic partnerships or licensing arrangements." He added that Clovis is having preliminary development and commercialization partnership discussions for its investigational radionuclide treatment FAP-2286, where the deal could include upfront and milestone payments, and opportunities for future royalties on sales.
Another option the company is considering is offering and selling super-voting mirrored preferred stock, a strategy that other companies in difficult cash positions have employed. "In order to raise sufficient capital to fund the company's operating plans and continue as a going concern beyond February 2023, we would expect we would need to successfully complete some combination of strategic alternatives and equity financing," Clovis CFO Daniel Muehl said.
During the call, Clovis executives also provided updates on the company's product portfolio and R&D pipeline. Mahaffy attributed the decline in Rubraca revenues in Q2 to fewer ovarian cancer patients being diagnosed and starting treatment during the COVID-19 pandemic and greater use of PARP inhibitors in the first-line metastatic ovarian cancer setting. "While ovarian cancer diagnoses appear to be reverting to pre-pandemic levels, the effect of this increase is almost wholly observed on front-line treatments and will not likely impact second-line indications for several quarters," Mahaffy said.
Currently, in the US, the drug is approved for second-line maintenance treatment of recurrent ovarian cancer after patients have responded to platinum-based chemotherapy. Rubraca is also approved for BRCA1/2-mutated metastatic castration-resistant prostate cancer that is unresponsive to surgery or testosterone-lowering drugs.
The US Food and Drug Administration had also granted accelerated approval to Rubraca as a third-line treatment for BRCA1/2-mutated metastatic ovarian cancer in 2016. In June, Clovis voluntarily withdrew this indication after discussing data with the FDA from the Phase II ARIEL trial of Rubraca versus chemotherapy, which failed to show an overall survival advantage for the PARP inhibitor.
Based on the same data, the European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) last month recommended that Rubraca no longer be used in this same setting.
However, Clovis is optimistic that it can bolster revenues by expanding Rubraca's use in earlier-line biomarker-unselected ovarian and prostate cancer patient populations. At the American Society of Clinical Oncology's annual meeting, the company presented data from the ATHENA-MONO trial, in which single-agent Rubraca improved progression-free survival compared to placebo as a front-line maintenance treatment in ovarian cancer patients who had homologous recombination repair deficiency as well as in allcomers.
Despite the promising data, the company said the FDA has recommended Clovis wait until the overall survival data reads out in ATHENA-MONO. If Clovis wants to submit for regulatory approval before then, the agency will ask its Oncologic Drug Advisory Committee to review the data and provide a recommendation on approval. Mahaffy said the company is planning for a Q3 regulatory submission in the US and Europe for Rubraca in the first-line maintenance ovarian cancer setting.
Clovis recently unveiled the first data on the safety and efficacy of its lead radionuclide treatment FAP-2286 in the Phase I portion of the LuMIERE study. FAP-2286 labeled with lutetium-177 is the fibroblast activation protein (FAP)-targeting therapeutic agent and gallium-68-labeled FAP-2286 is the imaging agent to identify patients with FAP-positive tumors.
In Phase I of LuMIERE, nine patients with advanced solid tumors received a 3.7 or 5.55 GBq/dose of 177Lu-FAP-2286. Clovis Chief Medical Officer Lindsey Rolfe said that the therapeutic agent showed early signs of activity, and patients experienced mild to moderate treatment-related adverse events. One heavily pretreated patient with cancer of the appendix had a partial response on the 3.7 GBq/dose of 177Lu-FAP-2286. The company expects to begin enrolling Phase II expansion cohorts later this year after establishing the appropriate dose of 177Lu-FAP-2286.
Rolfe added that an investigator-sponsored study ongoing at the University of California, San Francisco has also yielded promising early data on the ability of the 68Ga-FAP-2286 theranostic to identify FAP-positive metastatic solid tumors.
During morning trading on the Nasdaq, Clovis' stock price had decreased around 10 percent to $1.49.