On August 2, 2021 Verastem Oncology (Nasdaq: VSTM), a biopharmaceutical company committed to advancing new medicines for patients battling cancer, reported financial results for the three months ended June 30, 2021 and highlighted recent progress (Press release, Verastem, AUG 2, 2021, View Source [SID1234585550]).
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"There were several achievements of note during the second quarter, specifically the receipt of Breakthrough Therapy designation for VS-6766 in combination with defactinib for the treatment of recurrent low-grade serous ovarian cancer. Updated data from the investigator-initiated FRAME study, which was the basis for Breakthrough Therapy designation, has been accepted for presentation at the upcoming European Society of Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress 2021," said Brian Stuglik, CEO of Verastem Oncology. "Further, subsequent to the end of the second quarter, we eliminated substantially all of our outstanding debt through conversion of $28 million of our convertible senior notes, saving the Company over $30 million and enabling a cash runway that is expected to last until at least 2024."
Recent Corporate Highlights
Low-Grade Serous Ovarian Cancer (LGSOC)
Updated results from the investigator-sponsored Phase 1/2 FRAME study in LGSOC were selected for a mini oral presentation at ESMO (Free ESMO Whitepaper) 2021. The presentation will take place on Sunday, September 19, 2021 at 17:50 CEST.
Received Breakthrough Therapy designation for VS-6766 in combination with defactinib for the treatment of recurrent LGSOC, regardless of KRAS status, following one or more prior lines of therapy, including platinum-based chemotherapy.
Continued progress with the company-sponsored, registration-directed Phase 2 study (RAMP 201) investigating VS-6766 alone and in combination with defactinib for the treatment of recurrent LGSOC. The Company expects to report top-line results from the selection phase of RAMP 201 and commence expansion phase during the first half of 2022.
KRAS Mutant Non-small Cell Lung Cancer (NSCLC)
Continued progress in company-sponsored, registration-directed Phase 2 study (RAMP 202) investigating VS-6766 alone and in combination with defactinib for the treatment of patients with KRAS G12V mutant NSCLC. The Company expects to report top-line results from the selection phase of RAMP 202 and commence expansion phase during first half of 2022.
Corporate and Financial
Converted all of the $28.0 million aggregate principal of the Company’s 2020 5.00% Convertible Senior Notes due 2048 in exchange for approximately 8.6 million shares of common stock. The conversion eliminates substantially all outstanding debt and preserves approximately $31.2 million in cash. Cash runway expected until at least 2024 to deliver on current programs.
During the second quarter 2021, Verastem Oncology appointed Paul Bunn, M.D., and Lesley Solomon to its Board of Directors.
Second Quarter 2021 Financial Results
Verastem Oncology ended the second quarter 2021 with cash, cash equivalents and investments of $114.1 million.
Total revenue for the three months ended June 30, 2021 (2021 Quarter) was $0.5 million, compared to $4.3 million for the three months ended June 30, 2020 (2020 Quarter).
Total operating expenses for the 2021 Quarter were $16.4 million, compared to $25.6 million for the 2020 Quarter.
Selling, general and administrative expenses for the 2021 Quarter were $6.7 million, compared to $15.4 million for the 2020 Quarter. The decrease of $8.7 million, or 56%, primarily resulted from the Company’s shift in strategic direction and the COPIKTRA sale to Secura Bio, Inc., which led to lower employee related expenses and consulting and professional fees.
Research and development expenses for the 2021 Quarter were $9.7 million, compared to $9.3 million for the 2020 Quarter. The increase of $0.4 million, or 4%, was primarily related to increased personnel related costs, including non-cash stock-based compensation, partially offset by a decrease in contract research organization costs.
Net loss for the 2021 Quarter was $16.9 million, or $0.10 per share (basic and diluted), compared to $23.0 million, or $0.14 per share (basic and diluted), for the 2020 Quarter.
For the 2021 Quarter, non-GAAP adjusted net loss was $14.0 million, or $0.08 per share (diluted), compared to non-GAAP adjusted net loss of $20.5 million, or $0.12 per share (diluted), for the 2020 Quarter. Please refer to the GAAP to Non-GAAP Reconciliation attached to this press release.
Financial Guidance and Outlook
With the proceeds and expected milestones and royalties from the sale of COPIKTRA, Verastem Oncology expects that it will have a cash runway until at least 2024 to deliver on the current programs for VS-6766 and defactinib, including expenditures and development in LGSOC and KRAS mutant NSCLC. Verastem Oncology expects its 2021 annual operating expenses to be approximately $55-60 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 and six months ended June 30, 2021 and 2020 are included in the tables accompanying this press release after the unaudited condensed consolidated financial statements.
About the VS-6766/Defactinib Combination
The combination of VS-6766 and defactinib has been found to be clinically active in patients with KRAS mutant 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, KRAS mutant NSCLC and colorectal cancer (CRC). The FRAME study was expanded to include new cohorts in pancreatic cancer, KRAS mutant endometrioid cancer and KRAS-G12V NSCLC. Verastem Oncology is also supporting an investigator-initiated Phase 2 trial evaluating VS-6766 with defactinib in patients with metastatic uveal melanoma. Verastem Oncology has initiated Phase 2 registration-directed trials of VS-6766 with defactinib in patients with recurrent LGSOC and in patients with recurrent KRAS-G12V mutant NSCLC as part of its RAMP (Raf And Mek Program).
The U.S. Food and Drug Administration (FDA) granted Breakthrough Therapy designation for the combination of Verastem Oncology’s investigational RAF/MEK inhibitor VS-6766, with defactinib, its FAK inhibitor, for the treatment of all patients with recurrent low-grade serous ovarian cancer (LGSOC) regardless of KRAS status after one or more prior lines of therapy, including platinum-based chemotherapy.