[Biotech&Pharma] Why This Highly Rated Biotech Stock Jumped As High As 26%

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Shares of Clovis Oncology (CLVS) jumped Wednesday after U.S. regulators accepted the biotech company's application for a prostate cancer treatment.




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On today's stock market, Clovis stock rose 6%, to 9.43, in above-average volume. Earlier, the stock catapulted as high as 25.6%. Shares have a strong Relative Strength Rating of 94 out of a possible 99. The RS Rating measures a stock's 12-month performance.

The biotech company is hoping to use a drug called Rubraca to treat men with prostate cancer that can't be cured through castration. Patients must have a mutation in the BRCA 1 or BRCA 2 genes, and have cancer that has not only recurred, but spread.

Food and Drug Administration regulators also granted Rubraca priority review in prostate cancer treatment. The FDA set the review date for May 15.

“We are encouraged by the FDA's decision to grant priority review to the Rubraca application, which focuses on eligible patients with advanced prostate cancer, for whom new treatment options are very much needed,” Chief Executive Patrick Mahaffy said in a written statement.

Large Prostate Cancer Treatment Market

Rubraca belongs to a class of drugs called PARP inhibitors. It competes against drugs from pharma giants GlaxoSmithKline (GSK) and AstraZeneca (AZN). AstraZeneca makes Lynparza and GlaxoSmithKline owns Zejula through its takeover of biotech company Tesaro.

Clovis' Rubraca is a maintenance treatment for ovarian cancer patients. Physicians can also use it as a third option for ovarian cancer patients after chemotherapy.

Prostate cancer treatment would open up a new market for Clovis. Roughly 43,000 men in the U.S. are expected to be diagnosed with metastatic castration-resistant prostate cancer in 2020, the biotech company said in a news release.

The American Cancer Society estimated more than 175,000 men in the U.S. received a prostate cancer diagnosis in 2019. Globocan Cancer Fact Sheets estimates about 450,000 men in Europe had prostate cancer in 2018, Clovis said.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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