The writing has been on the wall for months, and, now, Clovis Oncology has officially thrown in the towel and filed for Chapter 11 bankruptcy protection.
The proceedings will move through the U.S. Bankruptcy Court in Delaware. In the meantime, Clovis is divving up its assets. Its pipeline clinical candidate, known as FAP-2286, will go to Novartis for $50 million upfront and the possibility of an additional $333.75 million if the drug hits certain milestones.
As for its other assets, Clovis is in discussions with “a number of interested parties” as possible buyers, according to the company’s recent statement.
Clovis is also planning to draw $75 million in financing to sustain operations during the bankruptcy proceedings.
This news has been a long time coming. Last month, in lieu of a third-quarter earnings call, Clovis noted in its quarterly filing that the company “will not have sufficient liquidity to maintain our operations beyond January 23,” citing difficulties in raising money, increased FDA scrutiny on the PARP inhibitor class, and commercial challenges with cancer drug Rubraca. Cost-cutting efforts, such as a 115-employee layoff round, couldn't help the company keep its finances in line.
Despite clear FDA warnings that filing an application for Rubraca’s approval as a first-line maintenance therapy for ovarian cancer wasn’t worth it, the company went ahead anyways in the third quarter. The application's target decision date is June 25, 2023.
Rubraca isn’t faring well in the market either. At the request of the FDA, the cancer drug's use is now limited to patients whose tumors have BRCA mutations. Rubraca previously was cleared as a second-line maintenance treatment for recurrent ovarian cancer in patients who have responded to chemotherapy, regardless of their BRCA biomarker status. The new restriction came after the agency threatened to convene an advisory committee on the issue, Clovis revealed in a November SEC filing.