Clovis Oncology stock slides 10% premarket after company files for bankruptcy

Clovis Oncology Inc. stock
CLVS,
+19.83%
fell 10% in premarket trade Monday, after the biotech filed for Chapter 11 bankruptcy and said it would sell assets. The company has a commitment for up to $75 million in debtor-in-possession financing to provide the liquidity needed to restructure in bankruptcy and pay its vendors and customers. Before filing, the company entered a “stalking horse” agreement with Novartis AG to acquire the rights to its clinical candidate FAP-2286, for an upfront payment of $50 million and up to $333.75 million on achieving certain development and regulatory milestones. It will also get up to $297 million for reaching certain sales milestones. Clovis warned in November that it might be forced into bankruptcy as it was running out of cash.