Shares of Clovis Oncology (NASDAQ:CLVS) are up 25% today on rumors that the cancer treatment company could be acquired by pharmaceutical giant Sanofi (NASDAQ:SNY). The movement in CLVS stock is largely being driven by online chatter, as no announcement has been made concerning an acquisition.
There is also a report on Seeking Alpha today about the possible takeover, further intensifying interest in CLVS stock. Before today’s move higher, Clovis Oncology’s stock was down 78% this year at just 70 cents per share.
What Happened With CLVS Stock
In its daily “Pharma Pulse” newsletter, Seeking Alpha reported CLVS stock rose more than 40% in after-hours trading on rumors that Sanofi has a real interest in acquiring it. The report comes as retail investors discuss and debate the likelihood that Clovis will be acquired on various social media platforms, including Reddit’s r/WallStreetBets forum.
Talk of a takeover comes after Clovis announced positive results last week from two Phase 3 clinical trials involving medications used to treat metastatic ovarian cancer and prostate cancer. The clinical trial results were greeted enthusiastically by investors, leading to a brief bounce in CLVS stock.
Why It Matters
Clovis Oncology is a small pharmaceutical startup that has never commercialized a medication and successfully brought it to market. With its share price down nearly 67% this year and trading barely above $1, a takeover by a larger, established pharmaceutical company such as Sanofi might be the best possible outcome for shareholders.
Also, CLVS stock has proven to be popular with retail traders, who have executed short squeezes on it several times over the past two years. A year ago, the share price was briefly as high as $6.65. As recently as April, Clovis Oncology’s stock was trading at $2.72 per share as retail investors piled into it only to abandon it a few weeks later, sending the share price down to its current level.
What’s Next for CLVS Stock
Talk of a takeover is pure speculation at this point. No deal has been announced, and there is no guarantee a purchase will ever come to fruition. Right now, Clovis Oncology’s stock is moving based on online chatter only. Given the ups and downs of the share price in recent months, investors might want to wait and see if the rumors become fact before taking a position in CLVS stock.
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On the date of publication, Joel Baglole did not have (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 InvestorPlace.com Publishing Guidelines.
