Clovis Oncology files for Chapter 11 bankruptcy and FAP-2286 asset sale

Troubled US biotech Clovis Oncology (Nasdaq: CLVS) has officially filed for bankruptcy in Delaware, hit by a fall in its cancer drug sales and challenges in raising additional capital, and will also seek to sell its assets through a court supervised sales process. Clovis’ shares were down more than 10% at $0.18 preemarket this morning, meaning a fall of 92.5% so far this year.

In order to provide necessary funding during the Chapter 11 proceeding, Clovis has received a commitment of up to $75 million in a multi-draw DIP financing facility. Upon approval by the Bankruptcy Court, the DIP financing is expected to provide Clovis with the necessary liquidity to operate in the normal course and meet obligations to its employees, vendors and customers throughout the Chapter 11 proceeding while executing on the sales process.

In what has been a rocky year for the company, recent blows suffered by Clovis have included defaulting on a convertible noted and a requests by the US Food and Drug Administration (FDA) and the European Medicines Agency (EMA) to limit the use of its only approved drug, its PARP blocker Rubraca (rucaparib), to ovarian cancer patients with a BRCA mutation. The latter added to the woes of a product that had fallen way behind AstraZeneca (LSE: AZN)/Merck & Co’s (NYSE: MRK) Lynparza (olaparib) and GSK’s (LSE: GSK) Zejula (niraparib). However, both Lynparza and Zejula have also has their indications restricted.