Announced Positive Updated Data from
Ongoing Investigator-Initiated Phase 1/2 FRAME Study Evaluating
VS-6766 and Defactinib Combination in Patients with Low-Grade
Serous Ovarian Cancer
On Track to Commence Company-Sponsored Phase 2
Registration-Directed Trials by Year-End 2020 in Both Low-Grade
Serous Ovarian Cancer and KRAS Mutant Non-Small Cell Lung
Cancer
Strong Balance Sheet with Cash, Cash
Equivalents and Investments Totaling $205.7 Million; Strategic Sale
of COPIKTRA® (duvelisib) Provides Cash Runway Until at Least
2024
Verastem, Inc. (Nasdaq:VSTM) (also known as Verastem Oncology),
a biopharmaceutical company committed to advancing new medicines
for patients battling cancer, today reported financial results for
the three months ending September 30, 2020, and provided an
overview of recent corporate highlights.
“The third quarter of 2020 was marked most notably by the sale
of the COPIKTRA (duvelisib) franchise to Secura Bio in a deal
valued at up to $311 million, plus royalties. This strategic
transaction allows us to focus our resources and efforts on
advancing the VS-6766 and defactinib combination program in KRAS
mutant solid tumors and provides us with a cash runway until at
least 2024,” said Brian Stuglik, Chief Executive Officer of
Verastem Oncology. “Looking ahead to the remainder of the year, we
remain on track to commence two new company-sponsored,
registration-directed Phase 2 clinical trials by year end, one in
low-grade serous ovarian cancer (LGSOC) and one in KRAS mutant
non-small cell lung cancer (NSCLC).”
Third Quarter 2020 and Recent Highlights
- Presented Updated Data from the Phase 1/2 FRAME Study in
Patients with LGSOC. In mid-September, Verastem reported
positive updated results from the ongoing investigator-initiated
Phase 1/2 FRAME study coinciding with a virtual oral presentation
by Dr. Udai Banerji, Institute of Cancer Research and The Royal
Marsden, at the 2nd Annual RAS-Targeted Drug Development (RTDD)
Summit. The FRAME study is evaluating VS-6766, Verastem’s RAF/MEK
inhibitor, in combination with defactinib, its FAK inhibitor, in
patients with LGSOC. The results demonstrated that the novel,
intermittent, combination dosing schedule used in the FRAME study
continues to show encouraging clinical activity, durability and a
favorable safety profile in patients with KRAS mutant LGSOC,
including patients who had previously progressed following
treatment with a MEK inhibitor.
- New Data Published in The Lancet Oncology Supports Potential
of VS-6766. An investigator-initiated Phase 1 study evaluating
the intermittent dosing schedule of VS-6766 was published in the
November issue of The Lancet Oncology. Tolerability and antitumor
activity were observed across various cancers with RAS/RAF/MEK
pathway mutations. The dose escalation study was the first to
evaluate a dual RAF/MEK inhibitor using innovative intermittent
dosing schedules in patients harboring RAS/RAF pathway
mutations.
- On Track to Commence Phase 2 Registration-Directed Trials in
Lead Indications This Year. Following a meeting with the U.S.
Food and Drug Administration (FDA), Verastem reported that the FDA
is supportive of its adaptive study design for the planned Phase 2
registration-directed trial evaluating VS-6766 and defactinib in
patients with recurrent LGSOC. Verastem expects to commence
registration-directed clinical trials in both recurrent LGSOC and
KRAS mutant non-small cell lung cancer by the end of 2020. Assuming
a positive outcome from these registration-directed trials,
Verastem expects to submit New Drug Applications to the FDA
requesting accelerated approval for VS-6766 alone or in combination
with defactinib in both LGSOC and KRAS mutant NSCLC.
- Closed COPIKTRA Sale to Secura Bio in a Deal Totaling $311
Million, Plus Royalties. Verastem recently announced the
closing of a strategic transaction selling global commercial and
development rights to COPIKTRA in all oncology indications to
Secura Bio, Inc. The transaction, which carries a total deal value
of up to $311 million, plus royalties, provides Verastem with a
cash runway until at least 2024 and will allow the Company to focus
its resources and efforts on the clinical development of VS-6766
and defactinib in KRAS mutant solid tumors.
- Presented New Preclinical Research Demonstrating Synergy and
Tumor Regression with VS-6766 in Combination with G12C
Inhibitors. In a virtual poster presentation, also at the RTDD
Summit, Verastem highlighted new preclinical researchwhere VS-6766
showed synergy with KRAS-G12C inhibitors in reducing cancer cell
viability across a panel of KRAS-G12C mutant NSCLC and colorectal
cancer (CRC) cell lines. This enhanced cellular anti-cancer
activity of the combination correlated with deeper and more durable
inhibition of ERK pathway signaling compared to G12C inhibition
alone. The anti-tumor effects of VS-6766 were stronger than the
effects of trametinib at a comparable dose.
Third Quarter 2020 Financial Results
Total Revenue for the three months ending September 30, 2020
(2020 Quarter) was $78.6 million, compared to $9.0 million for the
three months ending September 30, 2019 (2019 Quarter).
Sale of COPIKTRA license and related assets revenue for the 2020
Quarter was $70.0 million, compared to $0.0 for the 2019 Quarter.
The 2020 Quarter was comprised of a $70.0 million upfront payment
recognized as part of the COPIKTRA sale to Secura Bio Inc.
License and collaboration revenue for the 2020 Quarter was $2.8
million, compared to $5.0 million for the 2019 Quarter. The 2019
Quarter included a $5.0 million upfront payment received pursuant
to a license and collaboration agreement executed between Verastem
Oncology and Sanofi in July 2019. The 2020 Quarter was primarily
comprised of $2.5 million for Sanofi achieving two development
milestones under the license and collaboration agreement.
Net product revenue for the 2020 Quarter was $5.8 million,
compared to $4.0 million for the 2019 Quarter.
Cost of sales as a result of the sale of COPIKTRA license and
related assets for the 2020 Quarter was $31.2 million, compared to
$0.0 million for the 2019 Quarter. The 2020 Quarter comprised of
the intangible asset, certain duvelisib inventory, net duvelisib
contract prepaid balances and certain manufacturing equipment for
the amounts of $19.2 million, $6.0 million, $5.8 million, and $0.2
million, respectively, delivered to Secura Bio Inc. as part of the
COPIKTRA sale.
Total research and development (R&D) and selling, general
and administrative (SG&A) expenses for the 2020 Quarter were
$31.6 million, compared to $34.4 million for the 2019 Quarter.
R&D expense for the 2020 Quarter was $11.0 million, compared
to $12.2 million for the 2019 Quarter. The decrease of $1.2
million, or 10%, was primarily related to a decrease in contract
research organization costs and lower employee related expense.
SG&A expense for the 2020 Quarter was $20.6 million,
compared to $22.2 million for the 2019 Quarter. The decrease of
$1.6 million, or 7%, primarily resulted from the company’s shift in
strategic direction which led to lower commercial program and
employee related expense. The 2020 Quarter includes $3.5 million of
nonrecurring transaction expenses directly attributable to the
COPIKTRA sale to Secura Bio Inc.
Net income (loss) for the 2020 Quarter was $13.1 million, or
$0.08 per share (basic and diluted), compared to $(30.1) million,
or $(0.41) per share (basic and diluted), for the 2019 Quarter.
For the 2020 Quarter, non-GAAP adjusted net income was $18.8
million, or $0.11 per share (diluted), compared to non-GAAP
adjusted net loss of $26.2 million, or $0.35 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 third quarter of 2020 with cash,
cash equivalents and short-term investments of $205.7 million.
Financial Guidance and Outlook
With the proceeds from the sale of COPIKTRA, Verastem has a cash
runway until at least 2024 to deliver on the current programs for
VS-6766 and defactinib, including clinical and regulatory
milestones and development in LGSOC and KRAS mutant NSCLC. Verastem
expects its 2020 operating expenses to be approximately 40% lower
than its 2019 operating expenses. As a result of its new strategic
direction and operating plans, along with the sale of the COPIKTRA
franchise during the third quarter 2020 and associated transition
activities, the Company expects total operating expenses for the
full year 2020 to be in the range of $80 million to $90 million.
Beginning in 2021 Verastem expects its annual operating expenses to
be approximately $50 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 VS-6766
VS-6766 (formerly known as CH5126766, CKI27 and RO5126766) is a
unique inhibitor of the RAF/MEK signaling pathway. In contrast to
other MEK inhibitors in development, VS-6766 blocks both MEK kinase
activity and the ability of RAF to phosphorylate MEK. This unique
mechanism allows VS-6766 to block MEK signaling without the
compensatory activation of MEK that appears to limit the efficacy
of other inhibitors.
About Defactinib
Defactinib (VS-6063) is an oral small molecule inhibitor of FAK
and PYK2 that is currently being evaluated as a potential
combination therapy for various solid tumors. The Company has
received Orphan Drug designation for defactinib in ovarian cancer
and mesothelioma in the US, EU and Australia. Preclinical research
by Verastem Oncology scientists and collaborators at world-renowned
research institutions has described the effect of FAK inhibition to
enhance immune response by decreasing immuno-suppressive cells,
increasing cytotoxic T cells, and reducing stromal density, which
allows tumor-killing immune cells to enter the tumor.i,ii
About the VS-6766/Defactinib Combination
RAS mutant tumors are present in ~30% of all human cancers, have
historically presented a difficult treatment challenge and are
often associated with significantly worse prognosis. Challenges
associated with identifying new treatment options for these types
of cancers include resistance to single agents, identifying
tolerable combination regimens with MEK inhibitors and new RAS
inhibitors in development addressing only a minority of all RAS
mutated cancers.
The combination of VS-6766 and defactinib has been found to be
clinically active in patients with KRAS mt tumors. In an ongoing
investigator-initiated Phase 1/2 FRAME study, the combination of
VS-6766 and defactinib is being evaluated in patients with LGSOC,
KRASmt NSCLC and colorectal cancer (CRC). Updated interim data from
this study presented at the 2nd Annual RAS-Targeted Drug
Development Summit in September 2020 demonstrated a 56% overall
response rate and long duration of therapy among patients with
KRAS-G12 mt LGSOC. Based on an observation of higher response rates
seen in NSCLC patients with KRAS-G12V mutations in the study,
Verastem will also be further exploring the role of VS-6766 and
defactinib in KRAS-G12V NSCLC. The FRAME study was expanded in
August 2020 to include new cohorts in pancreatic cancer, KRASmt
endometrial cancer and KRAS-G12V NSCLC.
About Verastem Oncology
Verastem Oncology (Nasdaq: VSTM) is a development-stage
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
RAF/MEK inhibition and focal adhesion kinase (FAK) inhibition. 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 potential clinical value of the
RAF/MEK/FAK combination and the timing of commencing
registration-directed trials for the RAF/MEK/FAK combination. The
words "anticipate," "believe," "estimate," "expect," "intend,"
"may," "plan," "predict," "project," "target," "potential," "will,"
"would," "could," "should," "continue," “can,” “promising” 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.
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 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 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 VS-6766;
that we will not pursue or submit regulatory filings for our
product candidates; and that our product candidates will not
receive regulatory approval, become commercially successful
products, or result in new treatment options being offered to
patients.
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.
Verastem, Inc.
Condensed Consolidated Balance
Sheets
(in thousands)
(unaudited)
September 30,
December 31,
2020
2019
Cash, cash equivalents, &
investments
$
170,470
$
75,506
Accounts receivable, net
5,685
2,524
Inventory
—
3,096
Restricted cash, prepaid expenses and
other current assets
12,400
3,835
Property and equipment, net
497
947
Intangible assets, net
—
20,008
Right-of-use asset, net
2,820
3,077
Restricted cash and other assets
25,898
36,053
Total assets
$
217,770
$
145,046
Current Liabilities
$
37,678
$
29,890
Long-term debt
26,397
35,067
Convertible senior notes
20,841
68,556
Lease Liability, long-term
3,081
3,489
Other liabilities
—
870
Stockholders’ equity
129,773
7,174
Total liabilities and stockholders’
equity
$
217,770
$
145,046
Verastem, Inc.
Condensed Consolidated
Statements of Operations
(in thousands, except per share
amounts)
(unaudited)
Three months ended September
30,
Nine months ended September
30,
2020
2019
2020
2019
Revenue:
Product revenue, net
$
5,829
$
4,032
$
15,098
$
8,722
License and collaboration revenue
2,818
5,000
2,912
5,118
Sale of COPIKTRA license and related
assets revenue
70,000
—
70,000
—
Total revenue
78,647
9,032
88,010
13,840
Operating expenses:
Cost of sales - product
866
371
1,753
906
Cost of sales - intangible
amortization
8
392
793
1,177
Cost of sales – sale of COPIKTRA license
and related assets
31,187
—
31,187
—
Research and development
10,955
12,219
31,223
33,322
Selling, general and administrative
20,614
22,153
55,660
77,484
Total operating expenses
63,630
35,135
120,616
112,889
Income (Loss) from operations
15,017
(26,103)
(32,606)
(99,049)
Other expense
—
—
(1,313)
—
Interest income
19
1,005
497
3,770
Interest expense
(1,898)
(5,041)
(14,440)
(15,156)
Net income (loss)
$
13,138
$
(30,139)
$
(47,862)
$
(110,435)
Net income (loss) per share—basic
$
0.08
$
(0.41)
$
(0.32)
$
(1.49)
Net income (loss) per share—diluted
$
0.08
$
(0.41)
$
(0.32)
$
(1.49)
Weighted average common shares outstanding
used in computing:
Net income (loss) per share – basic
169,510
74,228
147,766
73,988
Net income (loss) per share - diluted
169,760
74,228
147,766
73,988
Verastem, Inc.
Reconciliation of GAAP to
Non-GAAP Financial Information
(in thousands, except per share
amounts)
(unaudited)
Three months ended September
30,
Nine months ended September
30,
2020
2019
2020
2019
Net income (loss)
Reconciliation
Net income (loss) (GAAP basis)
$
13,138
$
(30,139)
$
(47,862)
$
(110,435)
Adjust:
Amortization of acquired intangible
asset
8
392
793
1,177
Stock-based compensation expense
2,156
1,915
5,185
7,228
Non-cash interest, net
506
1,611
9,765
4,426
Severance and Other
2,993
40
4,781
2,034
Change in fair value of derivative
—
—
1,313
—
Chugai license payment
—
—
3,000
—
Adjusted Net income (loss) (non-GAAP
basis)
$
18,801
$
(26,181)
$
(23,025)
$
(95,570)
Reconciliation of Net Loss Per
Share
Net income (loss) per share – diluted
(GAAP Basis)
$
0.08
$
(0.41)
$
(0.32)
$
(1.49)
Adjust per diluted share
Amortization of acquired intangible
asset
—
0.01
—
0.01
Stock-based compensation expense
0.01
0.03
0.03
0.10
Non-cash interest, net
—
0.02
0.07
0.06
Severance and Other
0.02
—
0.03
0.03
Change in fair value of derivative
—
—
0.01
—
Chugai license payment
—
—
0.02
—
Adjusted Net income(loss) per share –
diluted
(non-GAAP Basis)
$
0.11
$
(0.35)
$
(0.16)
$
(1.29)
Weighted average common shares outstanding
used in computing net loss per share—diluted
169,760
74,228
147,766
73,988
References ________________________________________
i 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.
ii 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20201109005778/en/
Verastem Oncology Contacts: Investors: John Doyle Vice
President, Investor Relations & Finance +1 781-469-1546
jdoyle@verastem.com
Sherri Spear Argot Partners +1 212 600 1902
sherri@argotpartners.com
Media: Lisa Buffington Corporate Communications +1 781-292-4205
lbuffington@verastem.com
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