On January 13, 2025 Verastem Oncology (Nasdaq: VSTM), a biopharmaceutical company committed to advancing new medicines for patients with RAS/MAPK pathway-driven cancers, reported a new credit facility for up to $150 million along with an equity investment of $7.5 million with Oberland Capital Management LLC (Oberland Capital) (Press release, Verastem, JAN 13, 2025, View Source [SID1234649679]). In addition, the Company announced a strategic collaboration with IQVIA Inc. (IQVIA) to leverage IQVIA’s world-class infrastructure and established commercialization solutions to complement its launch strategy for the investigational combination of avutometinib plus defactinib for the treatment of recurrent KRAS mutant low-grade serous ovarian cancer (LGSOC) planned for mid-2025.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"The Oberland Capital transaction, coupled with our strategic partnership with IQVIA, enables us to launch avutometinib plus defactinib for recurrent LGSOC from a position of financial strength and with commercialization solutions to accelerate our launch. The additional capital will help us create a commercial revenue stream to support our pipeline with new approaches for patients needing treatments for complex and rare cancers," said Dan Paterson, president and chief executive officer of Verastem Oncology.

Verastem’s commercialization efforts are in anticipation of potential U.S. Food and Drug Administration (FDA) approval of avutometinib plus defactinib in recurrent KRAS mutant LGSOC. The Company announced on December 30, 2024, that the FDA set a Prescription Drug User Fee Act (PDUFA) action date for its NDA submission of June 30, 2025.

Under the terms of the note purchase agreement with Oberland Capital, Verastem will issue an initial $75 million of notes at closing, which is expected to occur on January 13, 2025. The Company then has the ability to access up to an additional $75 million in notes upon achievement of certain pre-determined milestones related to the potential regulatory approval and commercialization of avutometinib plus defactinib for the treatment of LGSOC. The notes carry an interest-only period of six years and will bear interest at a floating rate, which is subject to both a floor and a cap. The note purchase agreement also provides for revenue participation pursuant to which Oberland Capital will initially be entitled to 1.0% of the first $100 million of net sales in each calendar year of certain of the Company’s products, subject to pro-rata increase upon potential future draw downs.

In addition, the Company has entered into a stock purchase agreement with affiliates of Oberland Capital for the private placement of 1,416,939 shares of the Company’s common stock issued at closing, representing $7.5 million of gross proceeds based on the trailing 30-trading days volume-weighted average price or VWAP of $5.2931 per share. Additionally, Oberland has the option to participate in certain future equity offerings that may be consummated by the Company within the three years from closing, for up to $2.5 million at the same price per share in such offering. Closing of the stock purchase agreement is expected to occur concurrently with the closing of the note purchase agreement on January 13, 2025. A portion of the proceeds from the notes and equity investment will be used to fully repay amounts owed under the Company’s existing loan with Oxford Finance ($42.7 million), which has been terminated.

The Company had a preliminary unaudited cash, cash equivalents, and short term investment balance of $88.8 million as of December 31, 2024. Taking into account the initial $75.0 million of notes and $7.5 million of equity to be purchased by Oberland Capital at closing, and the repayment of amounts owed under the Company’s existing loan with Oxford Finance, the Company would have had pro-forma cash, cash equivalents, and short-term investment balance of $128.6 million as of December 31, 2024. Both the actual and pro forma December 31, 2024 balances stated herein are preliminary, unaudited estimates and subject to revision upon completion of the Company’s closing and audit processes and do not present all information necessary for an understanding of the Company’s financial condition as of, and its results of operations for the fiscal year ended December 31, 2024. Additional details regarding this financing will be available in a Current Report on Form 8-K to be filed by the Company with the Securities and Exchange Commission.

The agreement between Verastem and IQVIA allows Verastem to tap into IQVIA’s industry-leading expertise and resources while maintaining strategic oversight through the commercialization process and launch. IQVIA will help accelerate key launch capabilities resulting in significant savings while delivering a world-class product launch.

About the Avutometinib and Defactinib Combination

Avutometinib is an oral RAF/MEK clamp that potentially inhibits MEK1/2 kinase activities and induces inactive complexes of MEK with ARAF, BRAF, and CRAF, potentially creating a more complete and durable anti-tumor response through maximal RAS/MAPK pathway inhibition. In contrast to currently available MEK-only inhibitors, avutometinib blocks both MEK kinase activity and the ability of RAF to phosphorylate MEK. This unique mechanism allows avutometinib to block MEK signaling without the compensatory activation of MEK that appears to limit the efficacy of the MEK-only inhibitors. 

Defactinib is an oral, selective inhibitor of focal adhesion kinase (FAK) and proline-rich tyrosine kinase-2 (Pyk2), the two members of the focal adhesion kinase family of non-receptor protein tyrosine kinases. FAK and Pyk2 integrate signals from integrin and growth factor receptors to regulate cell proliferation, survival, migration, and invasion. FAK activation has been shown to mediate resistance to multiple anti-cancer agents, including RAF and MEK inhibitors. 

Verastem Oncology is currently conducting clinical trials with avutometinib with and without defactinib in RAS/MAPK-driven tumors as part of its Raf And Mek Program or RAMP. Verastem is currently enrolling patients and activating sites for RAMP 301 (GOG-3097/ENGOT-ov81/NCRI) (NCT06072781), an international Phase 3 confirmatory trial evaluating the combination of avutometinib and defactinib versus standard chemotherapy or hormonal therapy for the treatment of recurrent low-grade serous ovarian cancer (LGSOC). 

Verastem was granted Priority Review and a Prescription Drug User Fee Act (PDUFA) date of June 30, 2025, for its New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA), for the investigational combination of avutometinib and defactinib in adults with recurrent KRAS mutant LGSOC who received at least one prior systemic therapy. Verastem initiated a rolling NDA in May 2024 to the FDA and completed its NDA submission in October 2024. The FDA granted Breakthrough Therapy Designation for the treatment of patients with recurrent LGSOC after one or more prior lines of therapy, including platinum-based chemotherapy, in May 2021. Avutometinib alone or in combination with defactinib was also granted Orphan Drug Designation by the FDA for the treatment of LGSOC. 

Verastem Oncology has established a clinical collaboration with Amgen to evaluate LUMAKRAS (sotorasib) in combination with avutometinib and defactinib in both treatment-naïve patients and in patients whose KRAS G12C mutant non-small cell lung cancer progressed on a G12C inhibitor as part of the RAMP 203 trial (NCT05074810). Verastem has received Fast Track Designation from the FDA for the triplet combination in April 2024. RAMP 205 (NCT05669482), a Phase 1b/2 clinical trial evaluating avutometinib and defactinib with gemcitabine/nab-paclitaxel in patients with front-line metastatic pancreatic cancer, is supported by the PanCAN Therapeutic Accelerator Award. FDA granted Orphan Drug Designation to the avutometinib and defactinib combination for the treatment of pancreatic cancer.