Saturday, August 23, 2014

Seeking Alpha: Competition And Momentum Weighing On Clovis Oncology

The last year hasn't actually been all that bad for biotech, as the S&P Biotech ETF (NYSEARCA:XBI) has outperformed the S&P 500 by about six or seven points. Whether or not the XBI is a great benchmark for the biotech industry is beside the point, though; by any standard Clovis Oncology (NASDAQ:CLVS) has done poorly since I wrote about it in late December of 2013. Down almost 30% since then, some of the weakness may be due to less risk appetite from biotech investors, but I think it has more to do with growing concerns over competition for the company's lead drug CO-1686 (or rociletinib).

I don't take it lightly when any stock I recommend is down 30%, but I also acknowledge that that can be the way it goes in biotech - in the absence of solid data to go on, investors obsess over the tea leaves and can run hot or cold on a stock to dramatic effect. I was concerned in December that analysts were already too aggressive with their assumptions about market share and odds of approval, but my own numbers haven't changed that much. With a fair value of $75 and several news events on the way, Clovis shares could turn the tide over the next six to 12 months (or smash on the rocks).

Follow this link to the full article:
Competition And Momentum Weighing On Clovis Oncology

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