Clovis Oncology officially files for Chapter 11 bankruptcy.
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Clovis Oncology filed for Chapter 11 bankruptcy and will sell its assets through a supervised process. The first asset, investigational cancer treatment FAP-2286, will be sold to Novartis for up to $700 million.
Last month, the Colorado-based company slashed more than 100 jobs and warned of a potential bankruptcy in a filing with the U.S. Securities and Exchange Commission. The company cautioned that without an infusion of capital, a filing for bankruptcy would be imminent.
Clovis has struggled since the FDA began to limit the use of PARP inhibitors due to safety issues. Clovis’s Rubraca (rucaparib) was one of the top three PARP inhibitors used to treat ovarian cancer patients with deleterious BRCA mutation. Rubraca was also approved to treat these mutations in other cancer indications, including fallopian tube and prostate cancer.
In June, Clovis withdrew Rubraca from the U.S. market as a third-line treatment for BRCA-mutation ovarian cancer patients due to mortality concerns. Then, in mid-November, weeks after the company warned of potential bankruptcy, the FDA further requested limits on its use.
This time, the regulatory agency asked the company to limit the use of Rubraca as a second-line maintenance therapy treatment in ovarian cancer patients with BRCA mutations.
Rubraca is not the only PARP inhibitor caught up in the increased FDA scrutiny.
In September, AstraZeneca withdrew Lynparza as a treatment for highly pre-treated patients with advanced ovarian cancer who have a BRCA mutation. The decision was based on an overall survival analysis of the Phase III SOLO3 study. It showed patients treated with Lynparza had a 33% greater risk of death than those on placebo.
Last month, GSK also limited the use of its PARP inhibitor Zejula to a patient population with a confirmed deleterious or suspected deleterious germline BRCA mutation. GSK based the decision on overall survival data from the Phase III ENGOT-OV16/NOVA study.
That trial served as the basis of approval for the second-line maintenance indication. Zejula remains in use as a first-line treatment in epithelial ovarian and fallopian tube cancers.
The latest FDA request may have been the end for Clovis. The company was already struggling financially and, in its filing, Clovis officials said the limiting of the second-line maintenance indication would negatively impact the company’s revenue stream.
Since the announcement of Chapter 11 Monday, shares of Clovis fell to .19 cents as of 11 a.m. The stock closed at .20 cents on Friday. Clovis’s stock has steadily fallen more than 93% over the past year.
Breanna Burkart, vice president of investor relations and corporate communications for Clovis, told BioSpace Monday the company does not “have any further color or details beyond what is contained in the Bankruptcy Court filings, our news release and our recent SEC filings.”
Asset Sales
Clovis will sell its peptide-targeted radionuclide therapy and imaging agent FAP-2286 to Novartis for a price of up to a little less than $700 million. Radioligand therapeutics has become a cornerstone area of focus for the Swiss pharma giant.
Under terms of the sale, Novartis provided Clovis with $50 million upfront. The company stands to earn additional payments of $333.75 and $297 million in developmental, regulatory and commercial milestones.
Beyond FAP-2286, Clovis officials said Monday that it is actively engaged in discussions with other interested parties for its other assets, which include global rights to three discovery-stage compounds in its Targeted Radionuclide Development Program, according to the company website. Any potential sale will be subject to approval from the U.S. Bankruptcy Court.
When Clovis filed for Chapter 11, it was able to receive up to $75 million to provide the company with funding to continue operating during the bankruptcy proceedings. The financing was through a tool called debtor-in-possession financing, which is only provided to companies that are in Chapter 11.
