Clovis Oncology (NASDAQ:CLVS) stock is rising 5% in early trading after Clovis’ shareholders decided to reject a proposal for a reverse split of the company’s shares. The drug maker’s shareholders voted on proposals within the framework of its Annual Meeting. Clovis’ meeting with the Food and Drug Administration (FDA) may also be acting as a positive catalyst for CLVS stock.
CLVS Stock and Two Failed Proposals
As I explained in my article on CLVS stock yesterday:
The company [wanted] to implement the split in order to ensure that its shares stay above $1. The Nasdaq Exchange, where CLVS stock trades, requires companies’ shares to stay above $1. Stocks that fall below $1 for a long period of time can be removed from the exchange.
Under the proposal, Clovis’ shareholders would have received one share of CLVS stock for each seven shares of the stock that they currently own. More shares were voted in favor of the proposal than against it. However, the initiative was not backed by, according to the company: “a majority of the Company’s issued and outstanding shares of common stock.” As a result, the proposal failed.
Similarly, more shares voted in favor of than against a proposal to reduce “the number of authorized shares of the Company’s common stock from 200,000,000 to 57,142,000 shares.” Yet this initiative also failed because a majority of shareholders did not support it.
Clovis’ Meeting With the FDA
As I reported yesterday:
Clovis held a meeting with the FDA regarding the company’s efforts to get its Rucaparib drug approved for an additional purpose. Specifically, Clovis wants the FDA to approve Rucaparib as ‘a maintenance treatment … for women with advanced ovarian cancer who have responded to first-line platinum-based chemotherapy.’
The FDA was looking for additional overall survival data on Rucaparib, Clovis reported. The agency also said that, to obtain approval for the new indication, Clovis would have to present existing data on the drug to an FDA panel.
Clovis stated that it intends to apply for approval for the additional indication this quarter, indicating that it will submit existing data on the drug to an FDA panel, rather than obtain new data on the treatment.
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On the date of publication, Larry Ramer 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 InvestorPlace.com Publishing Guidelines.
