Clovis Oncology stock slides 75% after biotech warns it will run out of cash by January of 2023

Clovis Oncology Inc. shares
CLVS,
-71.62%
plunged 75% Wednesday, after the Colorado-based biotech said it will not have sufficient liquidity to maintain operations beyond January of 2023. The company said recent regulatory developments relating to its ovarian cancer drug Rubraca and challenges in raising fresh capital, “a potential bankruptcy filing in the very near term looks increasingly probable as a way to preserve the value of our business and assets for the benefit of our stakeholders.” For now, the company is still evaluating its strategic options and discussing in and out of bankruptcy financing options with creditors, Clovis said in a regulatory filing. Rubraca is the company’s sole product, but it faces steep competition from AstraZeneca
AZN,
-0.46%
AZN,
+1.74%
and Merck’s
MRK,
+0.09%
Lynparza and GSK’s
GSK,
+0.62%
GSK,
+1.46%
Zejula, which are approved in the first-line maintenance ovarian cancer setting and have become the standard of care. Rubraca is approved as a second-line maintenance treatment for patients with recurrent ovarian cancer who respond to chemo. That is a smaller and shrinking patient pool, given the competition from Lynparza and Zejula. The Food and Drug Administration has told Clovis it requires more mature patient survival data from its late-stage trial dubbed Athena-Mono and said it would closely scrutinize its application for approval. Clovis had a net loss of $56 million in the third quarter, narrower than the $67.4 million loss posted in the year-earlier period. Sales fell to $30.7 million from $37.9 million a year ago.