Clovis Oncology: One of the Top Biotech Takeover Targets for a Merger and Acquisition in 2020 or 2021
Major merger and acquisition activities can be expected for the biotech industry for the rest of 2020 and in 2021. The wallets of big pharma companies are full to bursting and the stock prices of smaller biotech companies are very attractive thanks to the current pandemic. Although it has become a little bit quieter around Clovis Oncology since last December and there is less takeover speculation and rumors in the news, we clearly believe that company is one of the hottest takeover candidates in biotech industry right now. Patient investors could be facing a big premium in the end.
Clovis Oncology is a small oncology company from the US. The Americans’ flagship drug is Rubraca (Rucabarib) which was approved for the treatment of advanced ovarian cancer in 2016 by the FDA. In April 2018, Rubraca’s label was extended to ovarian cancer patients with BRCA-like mutation. But that’s not yet the full story. Last Friday, Clovis Oncology has received marketing approval by the FDA for Rubraca in the clinical setting of metastatic castration-resistant prostate cancer. In addition, the drug is being investigated for the treatment of other solid tumors.
In Q1 2020, Clovis reported Rubraca sales of $42.6 million, corresponding to a growth of 8% as compared to the previous quarter and a 29% increase as compared to Q1 2019. The extension of Rubraca’s label to other indications will most likely boost it sales in the near future.
Although the announced publications for the oncology congress ASCO at the end of May probably won’t serve as additional price drivers for Clovis’ stock, we still think that the benefit/risk ratio of this share is still excellent.
Nothing has changed since our initial recommendation in January 2020. With a stock price of around $7.50 and a market cap of $576 million, Clovis Oncology remain one of the top takeover target and buyout candidate for 2020 and 2021. Fairly speculative investment, only for patient investors.
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