Clovis cuts staff by 35% after FDA knock back on lung cancer drug
Clovis Oncology (NASDAQ: CLVS) is set to cut up to 35% of its workforce following the US Food and Drug Administration’s decision not to recommend rociletinib for priority review.
The move was announced along with their first quarter results, which also saw the company make a massive net loss with expenses on research and development rising over 30% from the previous year.
Following the FDA committee’s knock back for rociletinib in April, Clovis has terminated enrolment in all ongoing clinical trials for the drug. In addition, the marketing authorisation application filed with the European Medicines Agency has been withdrawn.
Due to this cessation of its operations surrounding rociletinib, Clovis is reducing its staff, eliminating contractor positions and delaying or eliminating planned new positions. All these staff cut backs are expected to be made by end of 2016, resulting in a 35% reduction in the workforce compared to the end of 2015.
The failure of Clovis in this drug paves the way for AstraZeneca to dominate the market with their rival product, Tagrisso.
A potential saving grace for Clovis is its other late stage oncology drug, rucaparib, which has been submitted to the relevant authorities, with decisions expected before the end of the year.
Patrick J. Mahaffy, president and chief executive officer at Clovis Oncology, says: “We are very disappointed in the outcome for rociletinib, as there is a need for additional options for this difficult to treat disease. Our focus moving forward is clear: prioritise rucaparib development activity and prepare for its US launch, and manage our existing cash into 2018.”
Shares in the company have fallen 12% since Tuesday.
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