Clovis Oncology to Raise $170M as Stock Price Booms Following ASCO
Clovis Oncology is riding high following last week’s American Society of Clinical Oncology conference, and today the Boulder, CO-based company announced it will try to raise $170 million in an underwritten public offering.
Clovis Oncology (NASDAQ: CLVS) emerged from ASCO as one of the breakout companies, with its stock price more than doubling and now trading in the $70s after hitting a record high. The company develops, acquires, and commercializes anti-cancer agents. Along with its Boulder HQ, it has facilities in San Francisco and Cambridge, U.K.
Clovis Oncology said in an SEC filing its net proceeds of the new offering will be $160.2 million. The company will use the money for general corporate purposes, including funding of its development programs, general and administrative expenses, acquisition or licensing of additional product candidates or businesses, and working capital.
All shares of the common stock to be sold in the offering will be offered by Clovis Oncology, according to the company’s filing.
Clovis Oncology executives cannot speak to the media until the deal closes, which will likely be in the middle of this week, according to a spokesperson.
The company’s surge came after it announced initial findings from two Phase I/II studies for drugs in its pipeline at ASCO. The announcement included what one analyst called “extremely impressive” data for Clovis’s lung cancer drug, CO-1686. Details about the study can be read in Luke Timmerman’s recap of the ASCO conference.
Clovis stock skyrocketed from $36.58 per share at the close of trading on Friday, May 31, to $74.59 when trading ended on the next Monday, the day of Clovis’ ASCO presentation. Shares of Clovis have been trading in the $70s since the announcement at ASCO, and as of today its market cap is $1.9 billion.
Analysts think Clovis should go even higher. JP Morgan set its price target to $88 per share, and Piper Jaffray set it at $100.
In addition to CO-1686, Clovis has two other drugs in its pipeline. Clovis announced at ASCO its treatment for ovarian cancer, rucaparib, showed positive results. It also has a drug discovery program for mutant cKit inhibitor, which targets resistance mutations that occur in the majority of gastrointestinal stromal tumor patients, according to the company.
Clovis’s stock price had been rising slowly but steadily since last November, when it bottomed out at $11.19. That was after it announced it had stopped developing a pancreatic cancer treatment following negative test results.
J. P. Morgan Securities and Credit Suisse Securities are acting as joint book-running managers for the offering, and Leerink Swann is acting as co-manager for the offering, according to the press release.