Clovis Oncology (CLVS): A Big Splash or A Burn of Cash?

Boosted by M&A hopes of investors on Wall-Street, Clovis Oncology (CLVS) skyrocketed in November. After the setback occurring after the bullish rally the stock gained momentum again when Jim Cramer said on CNBC's show Mad Money that Clovis Oncology could be "a good spec".

The stock has been extremely volatile ever since, several days it was the most traded stock on Wall-Street. The borrow fee exceeded 100% during this period indicating that short-selling Clovis Oncology (CLVS) stock is an expensive business. The stock borrow fee amount depends on how difficult it is to borrow a stock, another indicator that people are holding onto their stock and are carefully watching further developments.

So we know Clovis Oncology is a hot item, but is it worth buying? Clovis has got interesting potential. It’s main drug Rubraca (Rucaparib) has now only been approved as a Ovarian cancer drug, but initial sales numbers aren’t as high as expected. The main driver behind the bullishness is a potential expansion for Rucaparib to be used against other cancers such as prostate cancer, this could create multi-billion dollar revenue and thus blockbuster growth. For now, Clovis Oncology is still a loss making stock, however it beat EPS estimates in November. It is interesting to see if they manage to get a bigger part of the market and gain further momentum ahead in 2020. Clovis could be an interesting candidate as potential growth stock and since the pharma industry has been actively buying out cancer drug developers we remain interested in the course of this stock. It’s a big risk, big return kind of stock, be aware of a bumpy ride ahead.

Disclaimer: The writer of this article holds Clovis Oncology (CLVS), this article should not be interpreted as investment advice or anything like that.

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