Clovis Oncology Inc. (CLVS) , one of the hottest biotech stocks of the last few months, is selling off Thursday but according to at least one Wall Street firm, the sell-off may be overdone.
"Rubraca, the company's lead product candidate, will gain significant market share in the large and rapidly evolving PARP inhibitor category, which is not adequately reflected in the stock's current valuation," wrote Leerink Partners Michael Schmidt in a note Thursday following the release of the company's second quarter earnings.
Clovis said Thursday that Rubraca, which launched on Dec. 19, had revenue $14.6 million for the second quarter of 2017, compared to net product revenue of $7.0 million in the first quarter of 2017 for a total of $21.6 million for the first six months of 2017.
The company, however, posted a loss of $3.88 per share, compared to the $1.30 per share consensus estimate, according to FactSet.
Shares of Clovis dove about 3.5%, or about $2.88 per share, midday Thursday to $78.78. The company is up a 82% this year having gained 48% since the middle of June.
Leerink, however, carries a $115 price target on the stock,
The results for Rubraca are 23% above consensus estimates, "which we think is impressive, given the more competitive marketplace in 2Q following launch of a competitor in a broader patient population."
The company is currently entering phase 3 trials for its ARIEL3 study, which involves using Rubraca for the treatment of ovarian cancer.
"We believe this bodes well for our broader maintenance label that would address this larger population, if approved by the FDA next year," said Clovis CEO Patrick Mahaffy on the company's earnings call Thursday.