Goldman Sachs maintains “sell” on Clovis Oncology, despite jumping 48%

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Clovis Oncology

One biotech stock that’s making waves in the markets right now is Clovis Oncology (NASDAQ: CLVS). The company ended up making the news prior to the weekend after it confirmed some better-than-expected results from a major drug trial. Normally, news of this kind would lead to a slew of analyst upgrades. However, that’s not what happened, oddly enough. Goldman Sachs analysts actually ended up doubling down on their bearish outlook for the stock on Friday, despite the fact that shares of Clovis skyrocketed on the news.

Clovis announced that a phase 3 trial for its drug Rubraca was superior to standard chemotherapy treatments in women with ovarian cancer. Additionally, it appeared that the new drug was very safe among patients, another important factor that health regulators look for in a new indication.

Rubraca is already approved as a treatment for fallopian tube cancer as a maintenance treatment as well. In general, it’s much more likely for the FDA to approve a drug for a new indication rather than approve a completely new drug, so that’s another good thing going for it.

Despite this, Wall Street analysts aren’t impressed. Goldman Sachs analyst Paul Choi is staying strong with his sell rating, as well as a target price of just $5 per share. He added that this massive stock price jump following the news was “disproportionate for data that was already disclosed [in a December press release] though the confirmatory study affirms Rubraca’s role in the treatment indication.” In his eyes, the confirmed results weren’t enough to justify this jump.

Following this “sell” rating by Goldman Sachs, there are more analysts that are bearish on Clovis than are bullish. In fact, there are more analysts that are just neutral on Clovis as well, so it’s clear that Wall Street doesn’t like this stock. On the flip side, retail traders have jumped on Clovis following its recent jump, including volatility hunters that have parted ways with GameStop ship and are looking for new trading opportunities.

Shares of Clovis Oncology were up around 48.3% on Friday following the announcement, and they aren’t really going down at all in pre-market trading either. While you might think now’s a great time to buy up on Clovis, if you look at its past performance, Clovis has been a very volatile stock.

Over the past 12-months, shares have skyrocketed a lot but haven’t really gained much this year. When you look at a five-year chart, shares peaked at around $100 in 2017 but are now trading around $7.8.

 

Clovis Oncology Company Profile

Clovis Oncology Inc is a biopharmaceutical company. It is focused on acquiring, developing and commercializing innovative anti-cancer agents in the United States, the EU, and additional international markets. The firm targets its development programs for the treatment of specific subsets of cancer populations. Its product candidates include Rucaparib and Lucitanib. Rucaparib is an oral small molecule inhibitor of poly ADP-ribose polymerase, is marketed in the United States for two indications specific to the recurrent epithelial ovarian, fallopian tube or primary peritoneal cancer whereas Lucitanib includes Rucaparib Combo and Nivolumab Combo. – Warrior Trading News

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