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?
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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.