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Clovis Oncology Inc (CLVS) is Trending After TESARO Inc (TSRO) Results

Clovis Oncology Inc (NASDAQ:CLVS) is on many watch lists today after the FDA formally approved TESARO Inc (NASDAQ:TSRO)’s niraparib.

Niraparib, which goes by the brand name Zejula, is an once-daily oral PARP inhibitor. PARP inhibitors have shown promising activity as a monotherapy against tumors with existing DNA repair defects, such as BRCA2 and BRCA1, and as a combination treatment therapy when administered together with anti-cancer agents that induce DNA damage. As it pertains to niraparib, the FDA gave its approval for the maintenance treatment of adult patients with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in partial or complete response to platinum-based chemotherapy. To make it even more noteworthy, the FDA won’t require a companion diagnostic test for niraparib and the agency gave the thumbs up a little bit earlier than it had to.

As for how that affects Clovis Oncology Inc (NASDAQ:CLVS), the initial market reaction yesterday was to sell the stock off due to the FDA not requiring a companion diagnostic test for niraparib. Clovis’ Rubraca also targets ovarian cancer, and the added broader competition isn’t necessarily a positive.

With that being said, some Wall Street analysts aren’t fazed. Steven Breazzano of Piper Jaffray maintains his ‘Overweight’ rating and has a $77 price target on his belief that Clovis is more than just ovarian cancer and that the company has long term potential in terms of PARP inhibitors. Many investors expected the FDA to give the green light to niraparib anyway.

What Does The Smart Money Sentiment Say?

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

According to our data, the smart money has been rather overweight on the name. Of the 742 elite institutions we track, 31 were long $839.82 million of Clovis Oncology Inc (NASDAQ:CLVS) and accounted for 49.10% of the float on December 31, versus 33 funds and $752.12 million respectively at the end of September. Meanwhile 17.88% of the float is short.

The Bottom Line

Clovis Oncology Inc (NASDAQ:CLVS) shares are on watch after competition increased due to the FDA’s approval of niraparib yesterday. Wall Street isn’t fazed and still loves Clovis’ potential.


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