Why Is Clovis (CLVS) Down 41.6% Since Last Earnings Report?

A month has gone by since the last earnings report for Clovis Oncology (CLVS). Shares have lost about 41.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Clovis due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Clovis Q4 Earnings & Sales Miss Estimates

Clovis incurred loss of $1.81 per share in the fourth quarter of 2019, wider than the Zacks Consensus Estimate of a loss of $1.61. However, the loss was narrower than the year-ago loss of $1.88 per share.

Net revenues, entirely from Clovis’ only marketed drug, Rubraca, were up almost 29.5% year over year to $39.3 million in the quarter, slightly beating the Zacks Consensus Estimate of $38.79 million. Sales were up 4.5% sequentially.

Quarter in Details

Sales of Rubracain the United States were $36.1 million, a slight decline from $36.5 million in the third quarter of 2019. Ex-U.S. market sales were $3.2 million in the fourth quarter compared with $2.1 million in the third quarter of 2019 driven by higher sales in Germany and launches in England and Italy during the fourth quarter.

During the fourth quarter, the company gained reimbursement agreements for Rubraca in England and Italy. Subsequently, in February, the company successfully negotiated reimbursement agreement for the drug in France.

In the fourth quarter, research & development expenses increased 1.8% year over year to $72.5 million. Selling, general and administrative expenses declined 8.1% year over year to $45.2 million.

Clovis ended the quarter with $296.7 million of cash equivalents and available-for-sale securities compared with $354.1 million as of Sep 30, 2019.

The company expects its cash resources to be enough to support its operations in the second half of 2021.

Full-Year Results

Clovis reported total revenues of $143 million, up almost 50% year over year. The company incurred an adjusted loss of $7.40 per share, wider than the year-ago adjusted loss of $6.68. Adjusted loss excludes expense related to acquired in-process research and development, and a gain on extinguishment of debt. Including these items, the company had incurred a loss of $7.43 in 2019.

How Have Estimates Been Moving Since Then?

Estimates review followed an upward path over the past two months.

VGM Scores

Currently, Clovis has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Clovis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.