Clovis stunned its investors last fall with the news that an updated look at its data on its cancer drug rociletinib--demanded by the FDA--included a drastically reduced rate of complete tumor responses. And now the feds want to know more about what happened.
Clovis’ 10-Q filed with the SEC this week notes that unidentified federal agencies are probing the event, which raised a number of questions about just how honest the company was with investors as it posted a strong but erroneous set of data in the New England Journal of Medicine last year.
“The Company has received requests for information from governmental agencies relating to the Company’s regulatory update announcement in November 2015 that the FDA requested additional clinical data on the efficacy and safety of rociletinib,” states the quarterly report. “The Company is cooperating with the inquiries.”
There was no immediate response from the company to my query about exactly which agencies are involved, though the SEC would normally be responsible for examining the timing on a company’s release of material information. At the time, Clovis ($CLVS) execs told analysts that they had known about the change in response rates for a few weeks before the disclosure.
The change in complete responses came after the company claimed to have seen a more than 20-point decline in the response rate after the number of unconfirmed responses failed to translate into confirmed responses in the final analysis. Just days ago Clovis confirmed that the FDA had notified the company that it is sending a formal rejection letter on the marketing application, which in turn triggered a company restructuring, the loss of 35% of its employees and the end of all its research work on rociletinib.
The change-up at Clovis was no normal reversal of fortune. Noted cancer drug development expert Kapil Dhingra, who once headed cancer R&D at Roche and sits on a number of biotech boards, has noted that the final reveal came long after investigators should have known the true rate of confirmed responses.
Clovis’ shares have plunged to a fraction of their old price, wiping out 90% of the company’s market share as it turns to the next drug in the pipeline. Clovis CEO Patrick Mahaffy has kept a low profile since the controversy erupted, declining repeated requests for an interview.
- here's the 10-Q