Clovis Oncology Board Must Face Claim Over Failed Cancer Drug

Clovis Oncology Inc.'s board must face a lawsuit blaming it for stock losses caused by the failure of an experimental lung cancer drug, a Delaware Chancery Court judge ruled Oct. 1.

The derivative suit accuses Clovis’s directors of ignoring signs that trials of the drug candidate, called Roci, weren’t following Food and Drug Administration protocols meant to ensure accuracy. Instead of investigating, the board used the “skewed results” to inflate the company’s stock while making insider trades, the suit says.

By ignoring obvious “red flags,” the directors breached their fiduciary duties to the company under In re Caremark International Inc. ...