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In re Clovis Oncology, Inc. Derivative Litigation
3/5/2024 pdw
Clovis Oncology was developing Roci, a lung cancer drug. It's clinical trial, which it named "TIGER-X", used a popular drug testing protocol called "RECIST."
The key metric in the RECIST protocol is the objective response rate ("ORR"), which measures the percentage of the trial patients whose tumor meaninfully shrinks. But you can't just take the patients' word for it, the RECIST protocol requires that you confirm the tumor shrinkage with a scan.
Clovis Oncology didn't do that, but reported the numbers anyway. They knew the FDA wouldn't accept unconfimred results, but there was a competing drug, Tagrisso, that they wanted to beat to the market. So they kept reporting the unconfirmed results and the market was exuberent because they thought that was the confirmed results.
When the company finally reported the confirmed results, it was about 30% lower than the market expected, and the stock tanked. So shareholders sued.
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