Verastem Oncology Reports Third Quarter 2020 Financial Results and Highlights Recent Company Progress
Verastem, a biopharmaceutical company, reported significant financial results for Q3 2020, with total revenue reaching $78.6 million, compared to $9.0 million in Q3 2019. A key highlight was the strategic sale of the COPIKTRA franchise to Secura Bio, valued at up to $311 million, providing cash runway until at least 2024.
Verastem continues its focus on advancing the VS-6766 and defactinib program for KRAS mutant solid tumors, with plans to initiate two Phase 2 clinical trials by year-end 2020.
- Q3 total revenue increased to $78.6 million from $9.0 million YoY.
- Completed COPIKTRA sale, providing up to $311 million in cash.
- Cash runway extended until at least 2024.
- Plans to start two Phase 2 trials by year-end 2020.
- License and collaboration revenue decreased to $2.8 million from $5.0 million YoY.
- SG&A expenses were higher than projections, totaling $20.6 million.
BOSTON--(BUSINESS WIRE)--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
Third Quarter 2020 and Recent Highlights
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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.
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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.
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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.
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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
Sale of COPIKTRA license and related assets revenue for the 2020 Quarter was
License and collaboration revenue for the 2020 Quarter was
Net product revenue for the 2020 Quarter was
Cost of sales as a result of the sale of COPIKTRA license and related assets for the 2020 Quarter was
Total research and development (R&D) and selling, general and administrative (SG&A) expenses for the 2020 Quarter were
R&D expense for the 2020 Quarter was
SG&A expense for the 2020 Quarter was
Net income (loss) for the 2020 Quarter was
For the 2020 Quarter, non-GAAP adjusted net income was
Verastem Oncology ended the third quarter of 2020 with cash, cash equivalents and short-term investments of
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
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 ~
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
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) |
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September 30, |
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December 31, |
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2020 |
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2019 |
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||
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|
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|
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Cash, cash equivalents, & investments |
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$ |
170,470 |
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$ |
75,506 |
|
Accounts receivable, net |
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|
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 |
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|
— |
|
|
20,008 |
|
Right-of-use asset, net |
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|
2,820 |
|
|
3,077 |
|
Restricted cash and other assets |
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|
25,898 |
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|
36,053 |
|
Total assets |
|
$ |
217,770 |
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$ |
145,046 |
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|
|
|
|
|
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Current Liabilities |
|
$ |
37,678 |
|
$ |
29,890 |
|
Long-term debt |
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|
26,397 |
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|
35,067 |
|
Convertible senior notes |
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|
20,841 |
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|
68,556 |
|
Lease Liability, long-term |
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|
3,081 |
|
|
3,489 |
|
Other liabilities |
|
|
— |
|
|
870 |
|
Stockholders’ equity |
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|
129,773 |
|
|
7,174 |
|
Total liabilities and stockholders’ equity |
|
$ |
217,770 |
|
$ |
145,046 |
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|
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Verastem, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) |
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Three months ended September 30, |
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Nine months ended September 30, |
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2020 |
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2019 |
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2020 |
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2019 |
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Revenue: |
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Product revenue, net |
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$ |
5,829 |
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$ |
4,032 |
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$ |
15,098 |
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$ |
8,722 |
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License and collaboration revenue |
|
|
2,818 |
|
|
5,000 |
|
|
2,912 |
|
|
5,118 |
|
|
Sale of COPIKTRA license and related assets revenue |
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|
70,000 |
|
|
— |
|
|
70,000 |
|
|
— |
|
|
Total revenue |
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|
78,647 |
|
|
9,032 |
|
|
88,010 |
|
|
13,840 |
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Operating expenses: |
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Cost of sales - product |
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|
866 |
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|
371 |
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|
1,753 |
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|
906 |
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|
Cost of sales - intangible amortization |
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|
8 |
|
|
392 |
|
|
793 |
|
|
1,177 |
|
|
Cost of sales – sale of COPIKTRA license and related assets |
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|
31,187 |
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|
— |
|
|
31,187 |
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|
— |
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|
Research and development |
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|
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) |
|
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Other expense |
|
|
— |
|
|
— |
|
|
(1,313) |
|
|
— |
|
|
Interest income |
|
|
19 |
|
|
1,005 |
|
|
497 |
|
|
3,770 |
|
|
Interest expense |
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|
(1,898) |
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|
(5,041) |
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|
(14,440) |
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|
(15,156) |
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Net income (loss) |
|
$ |
13,138 |
|
$ |
(30,139) |
|
$ |
(47,862) |
|
$ |
(110,435) |
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Net income (loss) per share—basic |
|
$ |
0.08 |
|
$ |
(0.41) |
|
$ |
(0.32) |
|
$ |
(1.49) |
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Net income (loss) per share—diluted |
|
$ |
0.08 |
|
$ |
(0.41) |
|
$ |
(0.32) |
|
$ |
(1.49) |
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Weighted average common shares outstanding used in computing: |
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Net income (loss) per share – basic |
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169,510 |
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|
74,228 |
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|
147,766 |
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|
73,988 |
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Net income (loss) per share - diluted |
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|
169,760 |
|
|
74,228 |
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|
147,766 |
|
|
73,988 |
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Verastem, Inc. Reconciliation of GAAP to Non-GAAP Financial Information (in thousands, except per share amounts) (unaudited) |
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Three months ended September 30, |
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Nine months ended September 30, |
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2020 |
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2019 |
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2020 |
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2019 |
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Net income (loss) Reconciliation |
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Net income (loss) (GAAP basis) |
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$ |
13,138 |
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$ |
(30,139) |
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$ |
(47,862) |
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$ |
(110,435) |
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Adjust: |
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Amortization of acquired intangible asset |
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8 |
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|
392 |
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|
793 |
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|
1,177 |
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Stock-based compensation expense |
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|
2,156 |
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|
1,915 |
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5,185 |
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|
7,228 |
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Non-cash interest, net |
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|
506 |
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|
|
1,611 |
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|
9,765 |
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|
4,426 |
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Severance and Other |
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2,993 |
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40 |
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4,781 |
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|
2,034 |
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Change in fair value of derivative |
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— |
|
|
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— |
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1,313 |
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— |
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Chugai license payment |
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— |
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— |
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3,000 |
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— |
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Adjusted Net income (loss) (non-GAAP basis) |
|
$ |
18,801 |
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|
$ |
(26,181) |
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$ |
(23,025) |
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$ |
(95,570) |
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Reconciliation of Net Loss Per Share |
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Net income (loss) per share – diluted (GAAP Basis) |
|
$ |
0.08 |
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|
$ |
(0.41) |
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$ |
(0.32) |
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$ |
(1.49) |
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Adjust per diluted share |
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Amortization of acquired intangible asset |
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|
— |
|
|
|
0.01 |
|
|
— |
|
|
0.01 |
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Stock-based compensation expense |
|
|
0.01 |
|
|
|
0.03 |
|
|
0.03 |
|
|
0.10 |
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Non-cash interest, net |
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|
— |
|
|
|
0.02 |
|
|
0.07 |
|
|
0.06 |
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Severance and Other |
|
|
0.02 |
|
|
|
— |
|
|
0.03 |
|
|
0.03 |
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Change in fair value of derivative |
|
|
— |
|
|
|
— |
|
|
0.01 |
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|
— |
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Chugai license payment |
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— |
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|
— |
|
|
0.02 |
|
|
— |
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Adjusted Net income(loss) per share – diluted (non-GAAP Basis) |
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$ |
0.11 |
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$ |
(0.35) |
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$ |
(0.16) |
|
$ |
(1.29) |
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Weighted average common shares outstanding used in computing net loss per share—diluted |
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|
169,760 |
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|
74,228 |
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|
|
147,766 |
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|
73,988 |
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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.
