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Verastem Oncology Reports Fourth Quarter and Full-Year 2019 Financial Results
New Strategic Direction
CH5126766 (VS-6766) in Combination with Defactinib
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Accelerating Development for KRAS Mutant Solid Tumors. In early 2020, Verastem Oncology licensed exclusive global development and commercialization rights to CH5126766 (VS-6766), a unique and promising inhibitor of the RAF/MEK signaling pathway. The combination of CH5126766 (VS-6766) and defactinib is currently being investigated in a Phase 1 clinical study and expansion cohorts in patients with KRAS mutant advanced solid tumors, including low grade serous ovarian cancer, non-small cell lung cancer and colorectal cancer. Verastem Oncology plans to initiate discussions with regulatory authorities during the first half of 2020, with the goal of commencing a registration-directed trial as soon as possible.
Data from the Phase 1 combination study were submitted for presentation to theAmerican Association for Cancer Research (AACR) 2020 Annual Meeting. The AACR recently announced that it was terminating theApril 2020 meeting due to the COVID-19 outbreak and is planning to reschedule the meeting for later this year. Verastem Oncology is actively working with the appropriate organizations and institutions to determine next steps.
Duvelisib (COPIKTRA®)
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Prioritizing the Advancement of Duvelisib in Relapsed/Refractory PTCL. At the
American Society of Hematology 2019 Annual Meeting, Verastem Oncology presented positive data from the dose optimization portion of the Phase 2 PRIMO study evaluating duvelisib in patients with relapsed or refractory PTCL, an aggressive disease with a lack of effective therapeutic options. This initial phase of the trial demonstrated promising clinical activity including complete and durable responses, as assessed by independent central review, with a manageable safety profile. The expansion phase of this registration-directed study continues to accrue patients and Verastem Oncology expects to complete enrollment in 2020 and report top-line results from the expansion cohorts in early 2021. Verastem Oncology intends to build on the existing Fast Track and Orphan Drug Designations and submit a regulatory package to theU.S. Food and Drug Administration to expand the approved indications for COPIKTRA to include relapsed or refractory PTCL. - Focusing COPIKTRA Commercial Activities. Verastem Oncology will be reducing the resources directed to the promotion and sale of COPIKTRA in its current indications, including reducing the size of its salesforce and non-core clinical research. The Company plans to shift its COPIKTRA promotional resources toward large, community-based practices and academic institutions, which represent the majority of the appropriate third-line patients with chronic lymphocytic leukemia/small lymphocytic lymphoma and follicular lymphoma. The Company expects to reduce its overall headcount number to approximately 90 employees.
Corporate and Financial
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Strengthened the Balance Sheet Through a Private Placement with
Premier Life Science Investors . OnMarch 3, 2020 , Verastem Oncology completed a private placement offering of approximately 46.5 million shares of its common stock to certain institutional investors, includingRA Capital Management ,Vivo Capital ,Venrock Healthcare Capital Partners ,Farallon Capital Management ,Acuta Capital ,EcoR1 Capital LLC ,Avidity Partners andLogos Capital at a price of$2.15 per share, a 12.6% premium to theFebruary 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$92.0 million .
Fourth Quarter 2019 Financial Results
Net product revenue for the three months ended
Total operating expenses for the 2019 Quarter were
Research and development (R&D) expense for the 2019 Quarter was
Selling, general and administrative expense for the 2019 Quarter was
Net loss for the 2019 Quarter was
For the 2019 Quarter, non-GAAP adjusted net loss was
Full-Year 2019 Financial Results
Total revenue for the year ended
Total operating expenses for the 2019 Period were
R&D expense for the 2019 Period was
Selling, general and administrative expense for the 2019 Period was
Net loss for the 2019 Period was
For the 2019 Period, non-GAAP adjusted net loss was
Verastem Oncology ended 2019 with cash, cash equivalents and short-term investments of
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, Verastem Oncology expects its R&D and SG&A expenses for the full year 2020 to be in the range of
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
About Verastem Oncology
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 CH5126766 (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, 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
Condensed Consolidated Balance Sheets (in thousands) (unaudited) |
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2019 |
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2018 |
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Cash, cash equivalents, & investments |
|
$ |
75,506 |
|
$ |
249,653 |
Accounts receivable, net |
|
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2,524 |
|
|
306 |
Inventory |
|
|
3,096 |
|
|
327 |
Prepaid expenses and other current assets |
|
|
3,835 |
|
|
2,973 |
Property and equipment, net |
|
|
947 |
|
|
1,369 |
Intangible assets, net |
|
|
20,008 |
|
|
21,577 |
Right-of-use asset, net |
|
|
3,077 |
|
|
— |
Restricted cash and other assets |
|
|
36,053 |
|
|
1,031 |
Total assets |
|
$ |
145,046 |
|
$ |
277,236 |
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|
|
|
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Current Liabilities |
|
$ |
29,890 |
|
$ |
37,077 |
Long-term debt |
|
|
35,067 |
|
|
19,506 |
Convertible senior notes |
|
|
68,556 |
|
|
95,231 |
Lease Liability, long-term |
|
|
3,489 |
|
|
— |
Other liabilities |
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|
870 |
|
|
1,123 |
Stockholders’ equity |
|
|
7,174 |
|
|
124,299 |
Total liabilities and stockholders’ equity |
|
$ |
145,046 |
|
$ |
277,236 |
Condensed Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) |
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Three months ended |
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Year ended |
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2019 |
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2018 |
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2019 |
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2018 |
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Revenue: |
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Product revenue, net |
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$ |
3,617 |
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$ |
1,210 |
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$ |
12,339 |
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$ |
1,718 |
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License and collaboration revenue |
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— |
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— |
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5,117 |
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25,000 |
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Total revenue |
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3,617 |
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1,210 |
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17,456 |
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26,718 |
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Operating expenses: |
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Cost of sales - product |
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332 |
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116 |
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1,238 |
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|
165 |
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Cost of sales - intangible amortization |
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393 |
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|
|
392 |
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1,569 |
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|
423 |
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Research and development |
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12,455 |
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8,762 |
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45,778 |
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43,648 |
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Selling, general and administrative |
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23,728 |
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26,199 |
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101,212 |
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77,265 |
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Total operating expenses |
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36,908 |
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35,469 |
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149,797 |
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121,501 |
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Loss from operations |
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|
(33,291 |
) |
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|
(34,259 |
) |
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(132,341 |
) |
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(94,783 |
) |
Other (expense)/income |
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(641 |
) |
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25,556 |
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(641 |
) |
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|
25,556 |
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Interest income |
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611 |
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|
|
1,306 |
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|
|
4,381 |
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|
2,603 |
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Interest expense |
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(5,453 |
) |
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(3,952 |
) |
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(20,608 |
) |
|
|
(5,810 |
) |
Net Loss |
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$ |
(38,774 |
) |
|
$ |
(11,349 |
) |
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$ |
(149,209 |
) |
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$ |
(72,434 |
) |
Net loss per share—basic |
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$ |
(0.51 |
) |
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$ |
(0.15 |
) |
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$ |
(2.00 |
) |
|
$ |
(1.12 |
) |
Net loss per share—diluted |
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$ |
(0.51 |
) |
|
$ |
(0.37 |
) |
|
$ |
(2.00 |
) |
|
$ |
(1.37 |
) |
Weighted average common shares outstanding used in computing net loss per share—basic |
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76,331 |
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73,766 |
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74,578 |
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|
64,962 |
|
Weighted average common shares outstanding used in computing net loss per share—diluted |
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76,331 |
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|
|
91,061 |
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74,578 |
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69,321 |
|
Reconciliation of GAAP to Non-GAAP Financial Information (in thousands, except per share amounts) (unaudited) |
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Three months ended |
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Year ended |
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2019 |
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2018 |
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2019 |
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2018 |
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Net Loss Reconciliation |
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Net Loss (GAAP basis) |
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$ |
(38,774 |
) |
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$ |
(11,349 |
) |
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$ |
(149,209 |
) |
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$ |
(72,434 |
) |
Adjust: |
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Amortization of acquired intangible asset |
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|
393 |
|
|
|
392 |
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1,569 |
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|
|
423 |
|
Stock-based compensation expense |
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1,311 |
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|
|
1,763 |
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8,539 |
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6,671 |
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Non-cash interest, net |
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2,705 |
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|
1,479 |
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7,131 |
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|
1,814 |
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Severance and Other |
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1,232 |
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|
|
218 |
|
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|
3,200 |
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|
710 |
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Notes third party exchange costs |
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|
2,168 |
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— |
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2,168 |
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— |
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Change in fair value of interest make whole provision and conversion option for Notes |
|
|
641 |
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|
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(25,556 |
) |
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|
641 |
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(25,556 |
) |
Adjusted Net Loss (non-GAAP basis) |
|
$ |
(30,324 |
) |
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$ |
(33,053 |
) |
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$ |
(125,961 |
) |
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$ |
(88,372 |
) |
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Reconciliation of Net Loss Per Share |
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Net Loss per share – diluted (GAAP Basis) |
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(0.51 |
) |
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(0.37 |
) |
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(2.00 |
) |
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(1.37 |
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Adjust per diluted share |
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Amortization of acquired intangible asset |
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0.01 |
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|
0.00 |
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|
|
0.02 |
|
|
|
0.01 |
|
Stock-based compensation expense |
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|
0.02 |
|
|
|
0.02 |
|
|
|
0.11 |
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|
|
0.09 |
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Non-cash interest, net |
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0.04 |
|
|
|
0.02 |
|
|
|
0.10 |
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|
|
0.03 |
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Severance and Other |
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|
0.01 |
|
|
|
0.00 |
|
|
|
0.04 |
|
|
|
0.01 |
|
Notes third party exchange costs |
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|
0.02 |
|
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|
— |
|
|
|
0.03 |
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|
|
— |
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Change in fair value of interest make whole provision and conversion option for Notes |
|
|
0.01 |
|
|
|
(0.03 |
) |
|
|
0.01 |
|
|
|
(0.04 |
) |
Adjusted Net Loss per share – diluted (non-GAAP Basis) |
|
$ |
(0.40 |
) |
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$ |
(0.36 |
) |
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$ |
(1.69 |
) |
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$ |
(1.27 |
) |
Weighted average common shares outstanding used in computing net loss per share—diluted |
|
|
76,331 |
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|
|
91,061 |
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|
74,578 |
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69,321 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200311005710/en/
Verastem Oncology Contacts:
Investors:
Vice President, Investor Relations & Finance
+1 781-469-1546
jdoyle@verastem.com
Media:
Corporate Communications
+1 781-292-4205
lbuffington@verastem.com
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