UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of Earliest Event Reported): October
30, 2018
Clovis
Oncology, Inc.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
001-35347
|
90-0475355
|
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
|
5500 Flatiron Parkway, Suite 100 Boulder, Colorado |
80301 |
|
|
(Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code: (303) 625-5000
Not
Applicable
(Former name or former address, if changed since last
report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ⃞
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ⃞
| Item 2.02 | Results of Operations and Financial Condition |
On October 30, 2018, Clovis Oncology, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2018. A copy of the press release is attached as Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 2.02 of Form 8-K and the information
incorporated by reference herein, including Exhibit 99.1 attached
hereto, shall not be deemed to be “filed” for purposes of Section 18 of
the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise
subject to the liabilities of that section, nor shall it be deemed
incorporated by reference in any filing under the Securities Act of 1933
or the Exchange Act, except as expressly set forth by specific reference
in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
Number and Description
| 99.1 | Press Release, dated October 30, 2018. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CLOVIS ONCOLOGY, INC. |
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| October 30, 2018 |
By: |
/s/ Patrick J. Mahaffy |
|
| Name: |
Patrick J. Mahaffy |
||
| Title: |
President and Chief Executive Officer |
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EXHIBIT INDEX
|
Exhibit Number |
Description |
|
- 4 -
Exhibit 99.1
Clovis Oncology Announces Third Quarter 2018 Operating Results
BOULDER, Colo.--(BUSINESS WIRE)--October 30, 2018--Clovis Oncology, Inc. (NASDAQ:CLVS) reported financial results for the quarter ended September 30, 2018, and provided an update on the Company’s clinical development programs and regulatory and commercial outlook for the remainder of 2018.
“As discussed last quarter, growth remains challenging in the second-line maintenance ovarian cancer setting, but we have efforts underway to address this and we are aggressively moving forward to grow this market and grow our share of this market,” said Patrick J. Mahaffy, CEO and President of Clovis Oncology. “In addition, our development team continues to make significant progress in moving Rubraca beyond its initial ovarian cancer indications. In particular, we were very pleased with the data from the TRITON studies presented at ESMO and at the Prostate Cancer Foundation Scientific Retreat, which also served as the basis for Breakthrough Therapy designation, and we are committed to developing Rubraca in the prostate setting as rapidly as possible to support men with this difficult-to-treat disease.”
Third Quarter 2018 Financial Results
Product revenue for the quarter and first nine months ended September 30, 2018 was $22.8 million and $65.0 million, compared to $16.8 million and $38.5 million for the comparable periods in 2017. The supply of free drug distributed to eligible patients through the Rubraca patient assistance program for the three months ended September 30, 2018 was approximately 30 percent of the overall commercial supply, or the equivalent of $9.6 million in commercial value. In the nine months ended September 30, 2018, the supply of this free drug was approximately 26 percent of the overall commercial supply, or the equivalent of $23 million in commercial value. We believe the increase in the free drug percentage not realized as revenue results primarily from an increase in the percentage of patients treated with Rubraca who qualify for our patient assistance program, the majority of whom are on Medicare, following label expansion to include the earlier-line, all-comers maintenance treatment label.
Clovis had $604.4 million in cash, cash equivalents and available-for-sale securities as of September 30, 2018. Cash used in operating activities was $72.5 million for the third quarter of 2018 and $283.3 million for the first nine months of 2018, compared with $45.8 million for the third quarter of 2017 and $195.3 million for the first nine months of 2017. This includes product supply costs of $76.1 million in the first nine months of 2018 related to Clovis’ previously described plan to build additional inventory in advance of the transition to a new manufacturing facility for Rubraca. Additionally, Clovis made one-time milestone payments to Pfizer of $58 million in the first nine months of 2018 related to U.S. product approvals in December 2016 and April 2018 and European product approval in May 2018.
Clovis reported a net loss for the third quarter of 2018 of $89.9 million, or ($1.71) per share, and $268.8 million, or a net loss of ($5.18) per share for the first nine months of 2018. Net loss was $60.7 million, or a net loss of ($1.24) per share for the third quarter of 2017, and $294.5 million, or a net loss of ($6.39) per share for the first nine months of 2017.
The net loss for the nine months ended September 30, 2018 includes a one-time charge of $20 million in the second quarter related to a final settlement reached with the Securities and Exchange Commission which resolves their investigation related to rociletinib, and a charge of $8.0 million in the first quarter related to a legal settlement. The net loss for the nine months ended September 30, 2017 included a charge of $117.0 million related to a legal settlement. The adjusted net loss excluding these items was $240.8 million, or ($4.64) per share for the first nine months of 2018 and $177.5 million, or ($3.85) per share for the first nine months of 2017.
Net loss for the third quarter and first nine months of 2018 included share-based compensation expense of $10.9 million and $37.7 million, compared to $12.6 million and $32.2 million for the comparable periods of 2017.
Clovis had approximately 52.7 million shares of common stock outstanding as of September 30, 2018.
Research and development expenses totaled $63.9 million for the third quarter of 2018 and $160.1 million for the first nine months of 2018, compared to $38.9 million and $104.5 million for the comparable periods in 2017. Research and development expenses will continue to increase compared to prior year as planned Rubraca studies progress.
Selling, general and administrative expenses totaled $42.5 million for the third quarter of 2018 and $126.6 million for the first nine months of 2018, compared to $35.0 million and $100.4 million for the comparable periods in 2017. Selling, general and administrative expenses will continue to increase compared to prior year in support of administrative and commercial activities related to Rubraca in the United States and Europe.
Guidance for Q4 2018; Anticipate Providing 2019 Guidance in Early January
Based on current trends in PARP inhibitor adoption, the Company anticipates Q4 2018 revenues to be consistent with or slightly higher than Q3 2018 reported revenues of $22.8 million. Clovis anticipates providing full-year 2019 guidance in early January.
Key Milestones and Objectives for Rubraca
European Union (EU) Maintenance Treatment Variation Under Review
Following the receipt of the initial Marketing Authorization for Rubraca in late May 2018, Clovis submitted a variation to include the maintenance indication, which was validated by the European Medicines Agency (EMA) in early July. The review is underway and an opinion for the maintenance indication is anticipated from the EMA’s Committee for Medicinal Products for Human Use (CHMP) by the end of 2018, and, if positive, a potential formal European Commission approval could follow in early 2019. Clovis continues to establish its EU organization to support the planned launch of Rubraca in Europe.
TRITON Datasets at ESMO and Breakthrough Therapy Designation
Initial data from the Company’s ongoing TRITON studies of Rubraca in advanced prostate cancer were presented at the ESMO 2018 Congress (European Society for Medical Oncology) earlier this month. The initial TRITON2 data show a 44% confirmed objective response rate (ORR) by investigator assessment in 25 RECIST1/PCWG3** response-evaluable patients with a BRCA1/2 alteration. The median duration of response in these patients has not yet been reached. In addition, a 51% confirmed prostate specific antigen (PSA) response rate was observed in 45 PSA response-evaluable patients with a BRCA1/2 alteration. Preliminary safety data for Rubraca in men with mCRPC were consistent with those observed in patients with ovarian cancer and other solid tumors.
The TRITON2 results were the basis for Breakthrough Therapy designation for Rubraca as a monotherapy treatment of adult patients with BRCA1/2 mutated mCRPC who have received at least one prior androgen receptor (AR)-directed therapy and taxane-based chemotherapy, which was granted on October 2, 2018 by the U.S. Food and Drug Administration (FDA). The TRITON2 study continues to enroll patients.
Also, a TRITON screening poster presented at ESMO provided initial genomic profiling data from the TRITON clinical program. Plasma samples identified alterations in BRCA1 or BRCA2 in approximately 12% of mCRPC patients screened for the TRITON2 study, and data demonstrated that plasma cell-free circulating tumor DNA (cfDNA) samples were highly consistent with tumor tissue in identifying BRCA1 or BRCA2 alterations.
Rubraca Clinical Development
Clovis has a robust clinical development program underway in multiple tumor types, including Clovis-sponsored, partner-sponsored and investigator-initiated trials. The following clinical studies are open for enrollment or are anticipated to open during the next several months:
Exploratory studies in other tumor types are also underway.
________________________________
1 Response Evaluation Criteria in Solid Tumors (RECIST) is a standardized methodology for determining therapeutic response to anticancer therapy using changes in lesion appearance on imaging studies.
** Prostate Cancer Working Group (PCWG3) is an international expert committee of prostate cancer clinical investigators who have recommended modifications to RECIST for use in the conduct of trials in metastatic castration-resistant prostate cancer (mCRPC) which were adopted in the TRITON2 protocol.
Lucitanib Clinical Development
Lucitanib is an oral, potent inhibitor of the tyrosine kinase activity of vascular endothelial growth factor receptors 1 through 3 (VEGFR1-3), platelet-derived growth factor receptors alpha and beta (PDGFRα/β) and fibroblast growth factor receptors 1 through 3 (FGFR1-3), which was previously evaluated in breast and lung cancers in partnership with Servier. Clovis has global rights (excluding China) for lucitanib.
Lucitanib was originally developed by Clovis and Servier with the hypothesis of activity in FGFR driven tumors; data in breast and lung cancer were insufficient to move the program forward. Recent data for a similar drug that inhibits these same three pathways - when combined with a PD-1 inhibitor - are extremely encouraging and represent a validated and alternative hypothesis for the development of lucitanib in combination with a PD-(L)1 inhibitor, and a Clovis-sponsored combination study is now being planned. Clovis also intends to initiate a study of lucitanib in combination with rucaparib, based on encouraging data of VEGF and PARP inhibitors in combination. Each of these studies is expected to initiate before the end of Q1 2019.
Conference Call Details
Clovis will hold a conference call to discuss Q3 2018 results this afternoon, October 30, at 4:30pm ET. The conference call will be simultaneously webcast on the Company’s web site at www.clovisoncology.com, and archived for future review. Dial-in numbers for the conference call are as follows: US participants 866.393.4306, International participants 734.385.2616, conference ID: 5885294.
About Rubraca (rucaparib)
Rubraca is an oral, small molecule inhibitor of PARP1, PARP2 and PARP3 being developed in ovarian cancer as well as several additional solid tumor indications. Studies open for enrollment or under consideration include ovarian, prostate, breast, gastroesophageal, pancreatic, lung and bladder cancers. Clovis holds worldwide rights for Rubraca.
In the United States, Rubraca is approved for the maintenance treatment of adult patients with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in a complete or partial response to platinum-based chemotherapy. Rubraca is also approved in the United States for the treatment of adult patients with deleterious BRCA mutation (germline and/or somatic) associated epithelial ovarian, fallopian tube, or primary peritoneal cancer who have been treated with two or more chemotherapies and selected for therapy based on an FDA-approved companion diagnostic for Rubraca.
Rubraca is an unlicensed medical product outside of the U.S. and EU.
About Clovis Oncology
Clovis Oncology, Inc. is a biopharmaceutical company focused on acquiring, developing and commercializing innovative anti-cancer agents in the U.S., Europe and additional international markets. Clovis Oncology targets development programs at specific subsets of cancer populations, and simultaneously develops, with partners, diagnostic tools intended to direct a compound in development to the population that is most likely to benefit from its use. Clovis Oncology is headquartered in Boulder, Colorado, and has additional offices in San Francisco and Oakland, California and Cambridge, UK. Please visit clovisoncology.com for more information.
To the extent that statements contained in this press release are not descriptions of historical facts regarding Clovis Oncology, they are forward-looking statements reflecting the current beliefs and expectations of management. Examples of forward-looking statements contained in this press release include, among others, statements regarding our guidance for future revenues and certain expenses, our expectation of timing for review and approval of the MA variation for rucaparib, our expectations for submission of regulatory filings, our plans to present final or interim data on ongoing clinical trials, the timing and pace of commencement of and enrollment in our clinical trials, including those being planned or conducted in collaboration with partners, changes in drug supply timing and costs and other expenses and statements regarding our expectations of the supply of free drug distributed to eligible patients. Such forward-looking statements involve substantial risks and uncertainties that could cause our future results, performance or achievements to differ significantly from that expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the uncertainties inherent in the market potential of our approved drug, including the performance of our sales and marketing efforts and the success of competing drugs and therapeutic approaches, the performance of our third-party manufacturers, our clinical development programs for our drug candidates and those of our partners, the corresponding development pathways of our companion diagnostics, the timing of availability of data from our clinical trials and the results, the initiation, enrollment and timing of our planned clinical trials, actions by the FDA, the EMA or other regulatory authorities regarding whether to accept or approve drug applications that may be filed, as well as their decisions regarding drug labeling, reimbursement and pricing, and other matters that could affect the development, availability or commercial potential of our drug candidates or companion diagnostics. Clovis Oncology does not undertake to update or revise any forward-looking statements. A further description of risks and uncertainties can be found in Clovis Oncology’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and its reports on Form 10-Q and Form 8-K.
| CLOVIS ONCOLOGY, INC | ||||||||||||||||||||||
| CONSOLIDATED FINANCIAL RESULTS | ||||||||||||||||||||||
| (Unaudited, in thousands, except per share amounts) | ||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
| Revenues: | ||||||||||||||||||||||
| Product revenue | $ | 22,757 | $ | 16,806 | $ | 65,037 | $ | 38,471 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||||||
| Cost of sales - product | 4,766 | 3,026 | 13,262 | 6,920 | ||||||||||||||||||
| Cost of sales - intangible asset amortization | 771 | 372 | 1,851 | 1,115 | ||||||||||||||||||
| Research and development | 63,887 | 38,924 | 160,138 | 104,479 | ||||||||||||||||||
| Selling, general and administrative | 42,495 | 35,011 | 126,634 | 100,384 | ||||||||||||||||||
| Total expenses | 111,919 | 77,333 | 301,885 | 212,898 | ||||||||||||||||||
| Operating loss | (89,162 | ) | (60,527 | ) | (236,848 | ) | (174,427 | ) | ||||||||||||||
| Other income (expense): | ||||||||||||||||||||||
| Interest expense | (3,376 | ) | (2,618 | ) | (9,592 | ) | (7,796 | ) | ||||||||||||||
| Foreign currency gain (loss) | 151 | (44 | ) | (34 | ) | (127 | ) | |||||||||||||||
| Legal settlement loss | - | - | (27,975 | ) | (117,000 | ) | ||||||||||||||||
| Other income | 2,536 | 1,291 | 5,419 | 2,237 | ||||||||||||||||||
| Other income (expense), net | (689 | ) | (1,371 | ) | (32,182 | ) | (122,686 | ) | ||||||||||||||
| Loss before income taxes | (89,851 | ) | (61,898 | ) | (269,030 | ) | (297,113 | ) | ||||||||||||||
| Income tax (expense) benefit | (13 | ) | 1,234 | 280 | 2,599 | |||||||||||||||||
| Net loss | $ | (89,864 | ) | $ | (60,664 | ) | $ | (268,750 | ) | $ | (294,514 | ) | ||||||||||
| Basic and diluted net loss per common share | $ | (1.71 | ) | $ | (1.24 | ) | $ | (5.18 | ) | $ | (6.39 | ) | ||||||||||
| Basic and diluted weighted-average common shares outstanding | 52,669 | 48,917 | 51,844 | 46,062 | ||||||||||||||||||
| RECONCILIATION OF GAAP TO NON-GAAP | ||||||||||||||||||||||
| NET LOSS AND NET LOSS PER SHARE | ||||||||||||||||||||||
| (Unaudited, in thousands, except per share amounts) | ||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
| GAAP net loss | $ | (89,864 | ) | $ | (60,664 | ) | $ | (268,750 | ) | $ | (294,514 | ) | ||||||||||
| Adjustments: | ||||||||||||||||||||||
| Legal settlement loss (1) | - | - | 27,975 | 117,000 | ||||||||||||||||||
| Non-GAAP net loss | $ | (89,864 | ) | $ | (60,664 | ) | $ | (240,775 | ) | $ | (177,514 | ) | ||||||||||
| GAAP net loss per common share | $ | (1.71 | ) | $ | (1.24 | ) | $ | (5.18 | ) | $ | (6.39 | ) | ||||||||||
| Non-GAAP net loss per common share | $ | (1.71 | ) | $ | (1.24 | ) | $ | (4.64 | ) | $ | (3.85 | ) | ||||||||||
The Company prepares its consolidated financial statements in accordance with U.S. GAAP. This press release also contains non-GAAP measurements of net loss and net loss per common share that the Company believes provide useful supplemental information relating to operating performance and trends and facilitates comparisons with other periods. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with U.S. GAAP.
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Explanation of adjustments: |
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| (1) | During the three months ended June 30, 2018, the Company recorded a one-time charge of $20.0 million related to an agreement reached with the SEC to resolve its investigation. | |
| During the three months ended March 31, 2018, the Company recorded a one-time charge of $8.0 million related to an agreement to resolve a potential litigation claim against us and certain of our officers. | ||
| During the three months ended June 30, 2017, the Company recorded a one-time charge of $117.0 million related to an agreement to resolve a litigation claim against us and certain of our officers. | ||
| CONSOLIDATED BALANCE SHEET DATA | ||||||||||
| (Unaudited, in thousands) | ||||||||||
| September 30, 2018 | December 31, 2017 | |||||||||
| Cash and cash equivalents | $ | 290,853 | $ | 464,198 | ||||||
| Available-for-sale securities | 313,525 | 99,533 | ||||||||
| Working capital | 614,264 | 545,423 | ||||||||
| Total assets | 891,464 | 735,230 | ||||||||
| Convertible senior notes | 574,828 | 282,406 | ||||||||
| Common stock and additional paid-in capital | 2,022,050 | 1,887,249 | ||||||||
| Total stockholders' equity | 233,666 | 367,636 | ||||||||
| Other Data | ||||||||||
| (Unaudited, in thousands) | ||||||||||
| Nine Months Ended September 30, | ||||||||||
| 2018 | 2017 | |||||||||
| Net cash used in operating activities | (283,270 | ) | (195,326 | ) | ||||||
| Share Based Compensation Expense | 37,715 | 32,201 | ||||||||
CONTACT:
Clovis Oncology
Breanna Burkart, 303-625-5023
bburkart@clovisoncology.com
or
Anna
Sussman, 303-625-5022
asussman@clovisoncology.com