Clovis Oncology Closes $275M Offering Following Two Pivotal Weeks

6/18/13Follow @MichaelXBD

Clovis Oncology’s big two weeks came to an end Monday with the closing of a secondary public offering of $275 million for the Boulder, CO.-based biopharmaceuticals company’s $275 million public offering.

Since the start of June, Clovis Oncology (NASDAQ: CLVS) has watched its stock price more than double in value, following its announcement at the American Society of Clinical Oncology conference that its treatments for non-small cell lung cancer and ovarian cancer showed promising results in Phase I clinical trials.

Interest from investors resulted in the underwritten shelf offering raising $105 million more than the company expected when it was announced last week. Clovis upsized the original $170 million offering to $240 million, and then the underwriters exercised their options.

Clovis offered its stock at $72 per share, and the offering netted the company $259.1 million after underwriting discounts, commissions, and estimated offering expenses are deducted, according to SEC documents.

The cash infusion comes at a pivotal time for Clovis. The company announced in November that what was once the most promising drug in its pipeline, CO-101, was ineffective in treating pancreatic cancer, based on negative results from a Phase III trial.

The company had to make a major transition, and the enthusiastic response from clinicians, investigators, and investors following ASCO showed they have confidence Clovis can make the pivot, company representative Anna Sussman said.

The offering that closed Monday supersedes an earlier $200 million shelf offering the company filed in April. In that offering, details like underwriters, the amount of shares, or the offering price were not listed.

Clovis was fortunate that events aligned, and it was able to raise funds on more favorable terms following the announcement of positive results and the surge in investor interest.

“This was a time when we could be opportunistic,” Sussman said.

The spike in investor interest was great for the company, but in the long run it is the interest from investigators and clinicians that will matter most, Sussman said. While the developments of the past two weeks were a huge boost for the company, there’s still a long way to go.

“There’s a whole lot of work in front of us, to be absolutely clear. Now that we’ve gotten these great signals about efficacy in the early stages, we have to look at our developments plans,” Sussman said.

“We know what work has to be done to take advantage of the enthusiasm investigators have and take this to clinical development as soon as possible,” she said.

The next step for Clovis is to continue testing CO-1686, the treatment for non-small cell lung cancer, and rucaparib, a treatment for ovarian cancer. Among the steps is moving forward with Phase I/II dose escalation studies and broader trials for both drugs, and reformulating CO-1686 from a capsule to a tablet, which showed greater efficacy in the trials. More details about trials for the drugs so far can be found in Luke Timmerman’s recent recap of ASCO.

Clovis expects to have more data to report from additional trials in the fall, Sussman said.

J. P. Morgan Securities and Credit Suisse Securities (USA) acted as joint book-running managers for the offering, and Leerink Swann acted as co-manager for the offering, according to Clovis.

The timing also worked out for Clovis in another way, as it hosted a board meeting last week. It added two new directors: Keith Flaherty, a Harvard Medical School professor and director of the Henri and Belinda Termeer Center for Targeted Therapy at the Massachusetts General Hospital Cancer Center; and Ginger Graham, former President and CEO of San Diego’s Amylin Pharmaceuticals, now part of Bristol-Myers Squibb.

Michael Davidson is the editor of Xconomy Boulder/Denver. He covers startups, venture capital, clean tech, energy, aerospace, telecoms, and whatever else happens above 5,280 feet. Contact him at mdavidson@xconomy.com. Follow @MichaelXBD

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