Clovis Oncology (CLVS) Stock Gains 20% on Tumor Trials, Buyout Hopes

  • Clovis Oncology (CLVS) is surging once again today.
  • This move comes as investors continue to price in buyout rumors.
  • Positive clinical trial results also have investors jumping into CLVS stock.
Various graphical representations of medical imagery are shown in front of a doctor using a tablet computer.
Source: Shutterstock / PopTika

This week has been a relatively dismal one for overall markets. However, investors in specific companies like Clovis Oncology (NASDAQ:CLVS) have seen impressive gains. CLVS stock started the week with a price of 66 cents per share. Now, it’s trading closer to $1.10 per share.

Today’s move appears to coincide with a number of previous catalysts that took the stock on a nice ride this past week.

As InvestorPlace contributor Joel Baglole points out, Clovis has been the subject of buyout rumors, which are almost always positive. That’s because acquisition targets typically get a juicy takeover premium, benefiting shareholders. However, the rumors say it’s actually French pharma giant Sanofi (NASDAQ:SNY) sniffing around Clovis right now. That has enticed the market even further.

Company-specific catalysts are driving interest in CLVS stock as well. This week, the company released positive highlights from a clinical trial for one of its solid tumor treatments. Although these were still Phase 1 results, any sort of positive news in this regard can certainly excite investors.

Let’s dive into whether these catalysts will continue the momentum for Clovis Oncology.

Can CLVS Stock Continue to Climb?

These two catalysts are very different in nature. As such, it probably makes sense to dive into each news item separately.

To start, the positive initial trial data released this week could provide some solid support for CLVS stock from here. If investors believe Clovis can bring more drugs and therapeutics from its pipeline to market, a valuation bump is in order. This is the sort of catalyst that could have legs, particularly if the company releases more positive data near-term.

Clovis’ buyout rumors are more likely speculative at this point, however. With little to substantiate the rumors, it’s hard for investors to assign an appropriate premium to CLVS stock. That’s because the probability of a takeover is still unknown.

Accordingly, there are both fundamental and speculative drivers taking Clovis higher this week. Whether the stock can continue to climb depends on how the buyout rumors pan out. That said, shares may have significant exuberance priced in already.

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On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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