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Clovis Oncology (NASDAQ: CLVS), a Boulder, Colorado-based biotechnology company, plans seek a diagnostic partner for its recently acquired drug candidate Lucitanib later this year, according to Patrick Mahaffy, CEO.

Part of the drug development strategy initiated by Clovis involves identifying and selecting a specific subset of patients most likely to benefit from a certain therapy, said Mahaffy, following an investor presentation earlier this year. The partner develops a companion diagnostic test in tandem with the early clinical work (Phase I or Phase II trial) that Clovis conducts to advance the drug candidate, such as Lucitanib. The companion diagnostic test is then validated in later, pivotal studies to demonstrate its ability to identify the subset of patients.

Mahaffy said Clovis typically enters into an agreement in which the partner will have rights to market the companion diagnostic test once the drug is approved. The partner may also receive royalties based on sales of the drug, added the CEO. Clovis, however, does not assign any marketing rights for the drug to the diagnostic partner.

Clovis, with a market cap of USD 3bn, has already entered diagnostic partnerships with Qiagen and Foundation Medicine. In the Qiagen partnership, Clovis is developing CO-1686, an oral epidermal growth factor receptor (EGFR), covalent inhibitor now in Phase I/II development. CO-1686 is designed to treat non-small cell lung cancer (NSCLC) patients with initial activating EGFR mutations, as well as the T790M dominant-resistance mutation.

With its three drug candidates – CO-1686, rucaparib and Lucitanib – Clovis is developing cancer treatments it asserts will deliver the right therapy to the right patient at the right time.

Rucarparib is in Phase II and Phase III studies as a treatment of platinum sensitive, relapsed ovarian cancer. Foundation Medicine is developing the companion diagnostic for rucaparib, an oral, small molecule poly (ADP-ribose) polymerase (PARP) inhibitor.

Clovis acquired Lucitanib last November through its USD 200m purchase of EOS SpA (Ethical Oncology Science), a privately held Italian biopharmaceutical company. Clovis paid USD 190m in stock and USD 10m in cash to acquire EOS. With Lucitanib, Clovis is advancing a Phase II trial designed to treat breast and lung cancer. The drug is an oral tyrosine kinase inhibitor that targets fibroblast growth factor receptors (FGFR)1-2, vascular endothelial growth factor receptors (VEGFR)1-3, and platelet-derived growth factor (PDGF) receptors alpha and beta.

Clovis said at the time of the EOS acquisition that Lucitanib is unique in its pattern of clinical inhibition of both FGFR and VEGFR tyrosine kinases, enabling the company to identify unique subsets of cancer patients who can benefit from the drug.

Clovis owns rights to Lucitanib in the US and Japan, while Servier retains the rights to the drug in Europe through an earlier partnership with EOS. Clovis owns worldwide rights to CO-1686 and rucaparib.

One of the first cancer drugs introduced to the market with a companion diagnostic was Pfizer’s Xalkori (crizotinib), which received approval to treat a subset of NSCLC patients in 2011. Worldwide sales of the drug nearly doubled to USD 89m in 2013, an increase from the USD 45m recorded by Xalkori in 2012.