Company to Pursue Low-Grade Serous Ovarian
Cancer Indication for VS-6766 with Defactinib; On Track to Initiate
Discussions with FDA
Company Reports $5.0M in Net Product Revenue;
With Newly Strengthened Balance Sheet, Company is Well Positioned
to Execute on Key Corporate Objectives in 2020 and Beyond
Verastem, Inc. (Nasdaq:VSTM) (also known as Verastem Oncology),
a biopharmaceutical company committed to developing and
commercializing new medicines for patients battling cancer, today
reported financial results for the three months ending March 31,
2020, and provided an overview of recent corporate highlights.
“The early part of 2020 was marked most importantly by the
strategic in-licensing of the novel RAF/MEK inhibitor VS-6766 which
is being investigated in combination with defactinib, our lead FAK
inhibitor, in KRAS mutant tumors,” commented Brian Stuglik, Chief
Executive Officer of Verastem Oncology. “The encouraging
preliminary Phase 1 results from the investigator-initiated FRAME
study recently reported at AACR in KRAS mutant low-grade serous
ovarian cancer (LGSOC) will form the basis of our upcoming
discussions with the U.S. Food and Drug Administration (FDA) and
other regulatory authorities. We look forward to identifying the
path forward for this novel combination and to embarking on a
registration-directed clinical trial in LGSOC as rapidly as
possible.”
RAF/MEK and FAK Inhibition in KRAS Mutant Solid
Tumors
- Presented Preliminary Results from investigator-initiated
Phase 1 FRAME Study Investigating the Combination of VS-6766 and
Defactinib in KRAS Mutant Solid Tumors at AACR 2020 Virtual Meeting
I. In a virtual poster presentation, Udai Banerji, MBBS, MD,
DNB, PhD, FRCP, NIHR, Professor of Molecular Cancer Pharmacology at
The Institute of Cancer Research and Honorary Consultant in Medical
Oncology at The Royal Marsden NHS Foundation Trust, highlighted
data from this ongoing, open-label, dose-escalation and expansion
investigator-initiated study investigating the combination of
VS-6766, Verastem Oncology’s RAF/MEK inhibitor, with defactinib,
the Company’s FAK inhibitor, in patients with KRAS mutant advanced
solid tumors, including LGSOC and non-small cell lung cancer
(NSCLC). The VS-6766/defactinib combination was well tolerated by
the patients in the trial. The recommended Phase 2 dose has now
been established. In the patients with KRAS mutant LGSOC (n=6), 4
patients responded for an overall response rate (ORR) of 67%. The
median time on treatment for these 4 patients was 20.5 months. In
the patients with KRAS mutant NSCLC (n=10), 1 patient responded
(partial response) for an ORR of 10% and a total of 8 patients
achieved disease control for a disease control rate (DCR) of 80%.
Additionally, in patients with KRAS mutant NSCLC, 8 remained on
therapy for at least 12 weeks and 3 remained on therapy for at
least 24 weeks. Expansion cohorts remain ongoing in LGSOC and
NSCLC. Verastem Oncology plans to initiate discussions with the FDA
during second quarter of 2020, with the goal of commencing a
registration-directed clinical trial investigating the
VS-6766/defactinib combination in patients with LGSOC by the end of
2020. Subsequent Analysis Based on an observation of higher
response rates seen in patients with KRASG12V mutations in the
investigator-initiated Phase 1 combination study, Verastem Oncology
conducted a post-hoc combined analysis with data from the
combination study and the prior single-agent study that utilized a
twice-weekly dosing schedule of VS-6766 to get a more complete
picture of activity in KRASG12V mutations. This analysis showed
early signals of activity in patients with KRASG12V mutated NSCLC.
The Company plans to evaluate this finding further in a prospective
NSCLC clinical trial.
- New Strategic Direction. Verastem Oncology recently
licensed exclusive global development and commercialization rights
to VS-6766 (CH5126766), a unique and promising inhibitor of the
RAF/MEK signaling pathway. The Company then announced its plans to
accelerate development of VS-6766 in combination with defactinib
for the treatment of KRAS mutant solid tumors. The rationale for
investigating the combinations of VS-6766 and defactinib is
supported by single-agent Phase 1 and Phase 2 studies which
investigated defactinib in KRAS mutant NSCLC1 and VS-6766 in KRAS
mutant NSCLC and LGSOC2.
COPIKTRA® (Duvelisib)
- First Patient Dosed in Chinese Study Evaluating Duvelisib in
Patients with Relapsed or Refractory Follicular Lymphoma (FL).
Verastem Oncology’s partner, CSPC Pharmaceutical Group Limited, has
dosed the first patient in a single-arm, open-label, multi-center
pivotal study designed to evaluate the antitumor activity and
safety of duvelisib in patients with relapsed or refractory FL.
This study is expected to serve as a bridging study based on the
efficacy and safety observed in Verastem Oncology’s Phase 2 DYNAMO
study. The results of this study will form the basis of a
regulatory submission for duvelisib for the treatment of relapsed
or refractory FL in China.
- Ongoing U.S. Commercial Rollout of COPIKTRA. COPIKTRA,
the Company’s marketed oral inhibitor of phosphoinositide 3-kinase
(PI3K), and the first FDA-approved dual inhibitor of PI3K-delta and
PI3K-gamma generated $5.0 million in net product revenues during
the first quarter of 2020, a 194% increase over the first quarter
of 2019 and a 39% increase over the fourth quarter of 2019.
Corporate and Financial
- Strengthened the Balance Sheet Through a Private Placement
with Premier Life Science Investors. On March 3, 2020, Verastem
Oncology completed a private placement offering of approximately
46.5 million shares of its common stock to certain institutional
investors, including RA Capital Management, Vivo Capital, Venrock
Healthcare Capital Partners, Farallon Capital Management, Acuta
Capital, EcoR1 Capital LLC, Avidity Partners and Logos Capital at a
price of $2.15 per share, a 12.6% premium to the February 27, 2020
closing price. The gross proceeds to Verastem Oncology were $100
million. After deducting the underwriting discounts and commissions
and other estimated offering expenses, net proceeds to the Company
were approximately $93.8 million.
- Convertible Senior Second Lien Notes (2019 Notes) Fully
Converted to Common Stock. During the first quarter of 2020,
all of the remaining 2019 Notes were converted into shares of
common stock. As of March 31, 2020, the Company had approximately
$63.3 million in outstanding debt.
- Appointed John H. Johnson to the Board of Directors. In
April, Verastem Oncology announced the appointment of John H.
Johnson to its Board of Directors. Mr. Johnson’s career spans
multiple executive management roles at leading global corporations
where he was responsible for overseeing oncology and immunology
drug development initiatives and commercialization. Mr. Johnson
will serve on the Compensation and Nominating and Governance
Committees.
First Quarter 2020 Financial Results
Net product revenue for the three months ending March 31, 2020
(2020 Quarter) was $5.0 million, compared to $1.7 million for the
three months ending March 31, 2019 (2019 Quarter). COPIKTRA demand
units for the 2020 Quarter increased 178% compared to the 2019
Quarter. License and collaboration revenue for the 2020 Quarter was
less than $0.1 million. There was no license and collaboration
revenue for the 2019 Quarter. 2020 Quarter license and
collaboration revenue was comprised of duvelisib shipments to our
partner, CSPC Pharmaceutical Group Limited.
Total operating expenses for the 2020 Quarter were $31.4
million, compared to $36.3 million for the 2019 Quarter. Included
within operating expenses for the 2020 Quarter is a non-recurring
charge of $3.0 million related to an up-front non-refundable
payment to Chugai Pharmaceutical Co. Ltd. (Chugai) for the VS-6766
license, $1.8 million of severance expense and $1.4 million of
non-cash stock-based compensation expense.
Research and development (R&D) expense for the 2020 Quarter
was $10.9 million, compared to $9.8 million for the 2019 Quarter.
The increase of $1.1 million, or 11%, was primarily related to the
up-front non-refundable payment of $3.0 million to Chugai for the
VS-6766 license. This was partially offset by a decrease of $1.3
million in contract research organization costs and a decrease of
$0.6 million in costs for clinical supply, drug substance and drug
product.
Selling, general and administrative (SG&A) expense for the
2020 Quarter was $19.6 million, compared to $26.0 million for the
2019 Quarter. The decrease of $6.4 million, or 25%, primarily
resulted from a decrease of $2.8 million in consulting and
professional fees, principally related to the support of commercial
launch activities in the 2019 Quarter, a decrease of $2.3 million
in personnel related costs, including non-cash stock-based
compensation as a result of reduced headcount, and a decrease of
$1.3 million in reduced travel and other costs.
Net loss for the 2020 Quarter was $38.0 million, or $0.35 per
share (basic and diluted), compared to $38.1 million, or $0.52 per
share (basic and diluted), for the 2019 Quarter. The 2020 Quarter
includes $8.1 million of non-cash interest expense related to
conversions of Convertible Senior Notes into shares of common
stock.
For the 2020 Quarter, non-GAAP adjusted net loss was $21.3
million, or $0.20 per share (diluted), compared to non-GAAP
adjusted net loss of $33.8 million, or $0.46 per share (diluted),
for the 2019 Quarter. Please refer to the GAAP to Non-GAAP
Reconciliation attached to this press release.
Verastem Oncology ended the first quarter of 2020 with cash,
cash equivalents and short-term investments of $170.7 million.
Financial Guidance for Fiscal 2020
As a result of its new strategic direction, Verastem Oncology
expects to reduce its operating expenses by approximately 40% for
2020 compared to 2019. Based on its current operating plans, the
Company expects its R&D and SG&A expenses for the full year
2020 to be in the range of $70 million to $85 million. The company
is guiding that 2020 COPIKTRA revenues may be approximately $16
million.
Use of Non-GAAP Financial Measures
To supplement Verastem Oncology’s condensed consolidated
financial statements, which are prepared and presented in
accordance with generally accepted accounting principles in the
United States (GAAP), the Company uses the following non-GAAP
financial measures in this press release: non-GAAP adjusted net
loss and non-GAAP net loss per share. These non-GAAP financial
measures exclude certain amounts or expenses from the corresponding
financial measures determined in accordance with GAAP. Management
believes this non-GAAP information is useful for investors, taken
in conjunction with the Company’s GAAP financial statements,
because it provides greater transparency and period-over-period
comparability with respect to the Company’s operating performance
and can enhance investors’ ability to identify operating trends in
the Company’s business. Management uses these measures, among other
factors, to assess and analyze operational results and trends and
to make financial and operational decisions. Non-GAAP information
is not prepared under a comprehensive set of accounting rules and
should only be used to supplement an understanding of the Company’s
operating results as reported under GAAP, not in isolation or as a
substitute for, or superior to, financial information prepared and
presented in accordance with GAAP. In addition, these non-GAAP
financial measures are unlikely to be comparable with non-GAAP
information provided by other companies. The determination of the
amounts that are excluded from non-GAAP financial measures is a
matter of management judgment and depends upon, among other
factors, the nature of the underlying expense or income amounts.
Reconciliations between these non-GAAP financial measures and the
most comparable GAAP financial measures for the three months ended
March 31, 2020 and 2019 are included in the tables accompanying
this press release after the unaudited condensed consolidated
financial statements.
About Verastem Oncology
Verastem Oncology (Nasdaq: VSTM) is a commercial
biopharmaceutical company committed to the development and
commercialization of new medicines to improve the lives of patients
diagnosed with cancer. Our pipeline is focused on novel small
molecule drugs that inhibit critical signaling pathways in cancer
that promote cancer cell survival and tumor growth, including
phosphoinositide 3-kinase (PI3K), focal adhesion kinase (FAK) and
RAF/MEK inhibition.
Our first FDA approved product is available for the treatment of
patients with certain types of indolent non-Hodgkin’s lymphoma
(iNHL).
For more information, please visit www.verastem.com.
Forward looking statements notice
This press release includes forward-looking statements about
Verastem Oncology’s strategy, future plans and prospects, including
statements related to the opportunity to rapidly advance the
development of clinical programs through Verastem Oncology’s
expanded development pipeline and strengthened balance sheet, the
timing of top-line results for clinical trials, anticipated
reductions in operating expenses from Verastem Oncology’s strategic
realignment, the timing of commencing a registration-directed trial
for VS-6766 and financial guidance estimates. The words
"anticipate," "believe," "estimate," "expect," "intend," "may,"
"plan," "predict," "project," "target," "potential," "will,"
"would," "could," "should," "continue," and similar expressions are
intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. Each
forward-looking statement is subject to risks and uncertainties
that could cause actual results to differ materially from those
expressed or implied in such statement.
Each forward-looking statement is subject to risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied in such statement. Applicable risks
and uncertainties include the risks and uncertainties, among other
things, regarding: the success in the development and potential
commercialization of our product candidates, including defactinib
in combination with CH5126766 (VS-6766); the occurrence of adverse
safety events and/or unexpected concerns that may arise from
additional data or analysis or result in unmanageable safety
profiles as compared to their levels of efficacy; our ability to
obtain, maintain and enforce patent and other intellectual property
protection for our product candidates; the scope, timing, and
outcome of any legal proceedings; decisions by regulatory
authorities regarding labeling and other matters that could affect
the availability or commercial potential of our product candidates;
whether preclinical testing of our product candidates and
preliminary or interim data from clinical trials will be predictive
of the results or success of ongoing or later clinical trials; that
the timing, scope and rate of reimbursement for our product
candidates is uncertain; that third-party payors (including
government agencies) may not reimburse; that there may be
competitive developments affecting our product candidates; that
data may not be available when expected; that enrollment of
clinical trials may take longer than expected; that our product
candidates will experience manufacturing or supply interruptions or
failures; that we will be unable to successfully initiate or
complete the clinical development and eventual commercialization of
our product candidates; that the development and commercialization
of our product candidates will take longer or cost more than
planned; that we or Chugai Pharmaceutical Co., Ltd. will fail to
fully perform under the CH5126766 (VS-6766) license agreement; that
we may not have sufficient cash to fund our contemplated
operations; that we may be unable to make additional draws under
our debt facility or obtain adequate financing in the future
through product licensing, co-promotional arrangements, public or
private equity, debt financing or otherwise; that we will be unable
to execute on our partnering strategies for defactinib in
combination with CH5126766 (VS-6766); that we will not pursue or
submit regulatory filings for our product candidates, that our
product candidates will not receive regulatory approval, become
commercially successful products, or result in new treatment
options being offered to patients, and that the duration and impact
of COVID-19 may affect, precipitate or exacerbate one or more of
the foregoing risks and uncertainties.
Other risks and uncertainties include those identified under the
heading “Risk Factors” in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2019, as filed with the Securities
and Exchange Commission (SEC) on March 11, 2020, and in any
subsequent filings with the SEC. The forward-looking statements
contained in this press release reflect Verastem Oncology’s views
as of the date hereof, and the Company does not assume and
specifically disclaims any obligation to update any forward-looking
statements whether as a result of new information, future events or
otherwise, except as required by law.
References
1 Gerber D. et al. Phase 2 study of the focal adhesion kinase
inhibitor defactinib (VS-6063) in previously treated advanced KRAS
mutant non-small cell lung cancer. Lung Cancer 2020: 139:60-67.
2 Chénard-Poirier, M. et al. Results from the biomarker-driven
basket trial of RO5126766 (CH5127566), a potent RAF/MEK inhibitor,
in RAS- or RAF-mutated malignancies including multiple myeloma.
Journal of Clinical Oncology 2017: 35.
10.1200/JCO.2017.35.15_suppl.2506.
Verastem, Inc.
Condensed Consolidated Balance
Sheets
(in thousands)
(unaudited)
March 31
December 31,
2020
2019
Cash, cash equivalents, &
investments
$
135,061
$
75,506
Accounts receivable, net
3,326
2,524
Inventory
4,372
3,096
Prepaid expenses and other current
assets
5,887
3,835
Property and equipment, net
866
947
Intangible assets, net
19,616
20,008
Right-of-use asset, net
2,995
3,077
Restricted cash and other assets
36,031
36,053
Total assets
$
208,154
$
145,046
Current Liabilities
$
25,728
$
29,890
Long-term debt
35,276
35,067
Convertible senior notes
19,938
68,556
Lease Liability, long-term
3,359
3,489
Other liabilities
870
870
Stockholders’ equity
122,983
7,174
Total liabilities and stockholders’
equity
$
208,154
$
145,046
Verastem, Inc.
Condensed Consolidated
Statements of Operations
(in thousands, except per share
amounts)
(unaudited)
Three months ended March
31,
2020
2019
Revenue:
Product revenue, net
$
5,034
$
1,671
License and collaboration revenue
22
—
Total revenue
5,056
1,671
Operating expenses:
Cost of sales - product
495
158
Cost of sales - intangible
amortization
392
392
Research and development
10,924
9,758
Selling, general and administrative
19,604
26,033
Total operating expenses
31,415
36,341
Loss from operations
(26,359)
(34,670)
Other expense
(1,313)
—
Interest income
356
1,497
Interest expense
(10,674)
(4,929)
Net Loss
$
(37,990)
$
(38,102)
Net loss per share—basic and diluted
$
(0.35)
$
(0.52)
Weighted average common shares outstanding
used in computing net loss per share—basic and diluted
108,153
73,854
Verastem, Inc.
Reconciliation of GAAP to
Non-GAAP Financial Information
(in thousands, except per share
amounts)
(unaudited)
Three months ended March
31,
2020
2019
Net Loss Reconciliation
Net Loss (GAAP basis)
$
(37,990)
$
(38,102)
Adjust:
Amortization of acquired intangible
asset
392
392
Stock-based compensation expense
1,370
2,248
Non-cash interest, net
8,779
1,608
Severance and Other
1,788
37
Change in fair value of derivative
1,313
—
Chugai License Payment
3,000
—
Adjusted Net Loss (non-GAAP
basis)
$
(21,348)
$
(33,817)
Reconciliation of Net Loss Per
Share
Net Loss per share – diluted (GAAP
Basis)
(0.35)
(0.52)
Adjust per diluted share
Amortization of acquired intangible
asset
0.00
0.01
Stock-based compensation expense
0.01
0.03
Non-cash interest, net
0.08
0.02
Severance and Other
0.02
0.00
Change in fair value of derivative
0.01
—
Chugai License Payment
0.03
—
Adjusted Net Loss per share – diluted
(non-GAAP Basis)
$
(0.20)
$
(0.46)
Weighted average common shares outstanding
used in computing net loss per share—diluted
108,153
73,854
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version on businesswire.com: https://www.businesswire.com/news/home/20200507006019/en/
Verastem Oncology:
Investors: John Doyle Vice President, Investor Relations &
Finance +1 781-469-1546 jdoyle@verastem.com
Joseph Rayne Argot Partners +1 212 600 1902
joseph@argotpartners.com
Media: Lisa Buffington Corporate Communications +1 781-292-4205
lbuffington@verastem.com
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