Report: Clovis looks to cash in on the bull market for biotechs

Clovis Oncology CEO Patrick Mahaffy

A few months ago, Clovis Oncology shares ($CLVS) caught fire and raced up 80% in one day after the biotech noted some promising results for its early-stage PARP inhibitor. Rebounding from an earlier failure of its collaboration with Norway's Clavis, the stock was on its way to providing the clinical-stage company with a $2 billion-plus valuation as biotech stocks in general hit a series of high notes in a bull market.

Now, Bloomberg reports that Clovis is ready to pack it in and see if it can find a buyer at a blockbuster price. The business news service's sources say that Clovis has partnered with Credit Suisse to shop the company at a time drug developers are enjoying some hefty premiums in M&A deals--as we saw with the recent sale of Onyx ($ONXX). And its stock continued its upward glide, gaining 16% on the rumor and setting the baseline value at $2.4 billion.

Whether or not a buyer could be found to come in at $3 billion or so would have provoked considerable amusement this time last year. But 2013 has proven to be a boon for the bulls. Despite all the discussions and rumors about buyout deals, though--which includes the recent rumor that ViroPharma ($VPHM) attracted the interest of Sanofi ($SNY) and Shire ($SHPG)--there hasn't been much in the way of extreme buyer enthusiasm for these deals.

True, Amgen ($AMGN) paid a nice premium to complete the buyout of Onyx, but despite Tony Coles' best efforts, he couldn't spur a competing bid to drive an auction. And Amgen was credited, at least for a while, with completing a disciplined takeover.

In addition to the PARP inhibitor rucaparib, Clovis has also been touting evidence of activity for its early-stage lung cancer drug targeted at EGFR-mutant patients. And while the biotech may not be very far along with its most promising drug candidates, cancer is a hot market and the company would qualify as a bolt-on affordable to most Big Pharma companies.

Back in the fall of 2011, the newly formed Clovis managed to pull off an IPO, gaining $13 a share and raising $130 million. Today, its shares are going for $73.58.

CEO Patrick Mahaffy gathered together a team of veteran execs from Pharmion, which they sold for $2.9 billion, and launched the biotech in 2009 with a big, $146 million A round. That money has financed collaboration deals with Avila Therapeutics and Norway's Clavis Pharma, among others. Clovis was named a Fierce 15 company in 2009.

- here's the story from Bloomberg

Special Reports: Clovis Oncology - 2009 Fierce 15 | No end of biotech IPO frenzy in sight