On March 14, 2023 Verastem Oncology (Nasdaq: VSTM), a biopharmaceutical company committed to advancing new medicines for patients with cancer, reported financial results for the three months and full year ended December 31, 2022, and highlighted recent progress (Press release, Verastem, MAR 14, 2023, View Source [SID1234628693]).
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"Building on our breakthrough therapy designation, we have made significant progress advancing our LGSOC program, including selecting the combination of avutometinib and defactinib as the go-forward treatment regimen in recurrent disease regardless of KRAS mutation with the goal of filing for accelerated approval upon data maturity in the RAMP 201 trial and initiation of a confirmatory study," said Brian Stuglik, Chief Executive Officer of Verastem Oncology. "We believe we are well-positioned to bring this potential new combination therapy to patients who have been waiting for the first U.S. Food and Drug Administration (FDA) approved medicine for this disease. Our debt facility and recent private placement offering add flexibility to our financial strength and are expected to support the continued development of avutometinib in combinations across RAS pathway-driven cancers of high unmet need."
Fourth Quarter 2022 and Recent Highlights
Low Grade Serous Ovarian Cancer (LGSOC)
The Company held a productive meeting with the FDA to discuss the encouraging results to date of the ongoing RAMP 201 LGSOC trial evaluating avutometinib ± defactinib among patients with recurrent LGSOC, confirmed the go forward treatment regimen selection of avutometinib and defactinib based on a planned interim analysis with prespecified criteria and discussed the regulatory path forward.
Of the 29 patients evaluable for response by blinded independent central review (BICR) in the combination arm, the initial results showed a confirmed objective response rate (ORR) of 28% in all patients and 27% vs 29% in KRAS mutant (n=15) and KRAS wild-type (n=14) LGSOC, respectively. Three additional patients with KRAS mutant LGSOC showed an unconfirmed partial response. The overall disease control rate (stable disease plus partial response) was 93%. Most evaluable patients (62%) were still on study treatment on the combination arm at the time of the data cut with a minimum follow-up of five months. No new safety signals were reported with a continued favorable safety and tolerability profile.
Completed enrollment in primary cohort of 72 patients in the combination arm of RAMP 201. Continued enrollment in the combination arm of RAMP 201 is ongoing to expand the clinical experience in anticipation of initiation of a confirmatory study.
The Company intends to include mature data from RAMP 201, the Verastem sponsored clinical trial, and the FRAME study, led by The Institute of Cancer Research, London, and The Royal Marsden NHS Foundation Trust, to potentially support filing for accelerated approval.
Other Programs
In the Company’s RAMP 203 and RAMP 204 clinical trials, evaluating the combination of avutometinib with Amgen’s LUMAKRAS (sotorasib) (RAMP 203) and with Mirati’s KRAZATI (adagrasib) (RAMP 204) in KRAS G12C mutant NSCLC, RAMP 203 progressed to the final dose escalation cohort and enrollment was initiated and dose escalation is ongoing in RAMP 204.
Initiated RAMP 205, a Phase 1b/2 clinical trial of avutometinib and defactinib to evaluate a more complete blockade of KRAS signaling with standard of care chemotherapy ((GEMZAR (gemcitabine) and ABRAXANE)). The trial is supported by the Company’s receipt of the first "Therapeutic Accelerator Award" from the Pancreatic Cancer Network (PanCAN).
Corporate Updates
The Company entered into a definitive agreement to sell up to approximately 2.1 million shares of its Series B convertible preferred stock to affiliates of BVF Partners L.P. in a private placement to raise aggregate gross proceeds of up to approximately $60 million in two tranches. On January 27, 2023, Verastem Oncology closed on the initial tranche of 1.2 million shares of its Series B convertible preferred stock with gross proceeds of $30 million.
The Company has achieved the Term B Milestone pursuant to its credit facility with Oxford and plans to draw down an additional $15 million in March 2023. Under the credit facility, Verastem has the ability to access up to an additional $110 million in a series of tranches, $60 million of which are based on certain pre-determined milestones and $50 million of which are at the lender’s discretion.
Intermittent dosing intellectual property for both avutometinib alone and in combination with defactinib was recently allowed, extending patent coverage up to 2038 and 2040, respectively.
Appointed Anil Kapur, Executive Vice President, Corporate Strategy and Chief Commercial Officer at Geron Corporation and Robert Gagnon, the Chief Financial Officer and Operating Partner at Gurnet Point Capital to its Board of Directors.
Fourth Quarter 2022 Financial Results
Verastem Oncology ended the fourth quarter of 2022 with cash, cash equivalents and investments of $87.9 million. On a pro forma basis, inclusive of the $30 million gross proceeds raised through issuance of Series B convertible preferred stock, cash, cash equivalents and investments were $117.9 million as of December 31, 2022. Additionally, the Company plans to draw down $15 million on the Oxford Loan and Security Agreement in March 2023.
Total operating expenses for the three months ended December 31, 2022 (the "2022 Quarter") were $16.8 million, compared to $17.1 million for the three months ended December 31, 2021 (the "2021 Quarter").
Research & development expenses for the 2022 Quarter were $10.7 million, compared to $11.4 million for the 2021 Quarter. The decrease of $0.7 million, or 6.1%, primarily resulted from a decrease in investigator fees and drug product and drug substance costs.
Selling, general & administrative expenses for the 2022 Quarter were $6.1 million, compared to $5.7 million for the 2021 Quarter. The increase of $0.4 million, or 7.0%, was primarily related to additional costs in anticipation of potential commercialization of avutometinib and defactinib in LGSOC.
Net loss for the 2022 Quarter was $16.8 million, or $0.08 per share (basic and diluted), compared to net loss of $16.5 million, or $0.09 per share (basic and diluted) for the 2021 Quarter.
For the 2022 Quarter, non-GAAP adjusted net loss was $15.4 million, or $0.08 per share (diluted), compared to non-GAAP adjusted net loss of $14.9 million, or $0.08 per share (diluted) for the 2021 Quarter. Please refer to the GAAP to Non-GAAP Reconciliation attached to this press release.
Full-Year 2022 Financial Results
Total revenue for the year ended December 31, 2022 ("2022 Period") was $2.6 million, compared to $2.1 million for the year ended December 31, 2021 ("2021 Period"). Revenue for the 2022 Period was primarily comprised of one regulatory milestone achieved by Secura Bio, Inc.’s ("Secura") sublicensee, CSPC Pharmaceutical Group Limited. Revenue for the 2021 Period was primarily comprised of two regulatory milestones achieved by Secura’s sublicensee, Sanofi, and transition services revenue for certain support functions provided to Secura pursuant to the Secura transition services agreement, which was entered into in connection with the sale of COPIKTRA to Secura.
Total operating expenses for the 2022 Period were $75.5 million, compared to $63.5 million for the 2021 Period.
Research & development expenses for the 2022 Period were $50.6 million, compared to $39.3 million for the 2021 Period. The increase of $11.3 million, or 28.8%, was primarily related to an increase in drug substance and drug product costs and contract research organization costs.
Selling, general & administrative expenses for the 2022 Period were $25.0 million, compared to $24.1 million for the 2021 Period. The increase of $0.9 million, or 3.7%, was primarily related to additional costs in anticipation of potential commercialization of avutometinib and defactinib in LGSOC.
Net loss for the 2022 Period was $73.8 million, or $0.38 per share (basic and diluted), compared to $71.2 million, or $0.41 per share (basic and diluted) for the 2021 Period.
For the 2022 Period, non-GAAP adjusted net loss was $67.4 million, or $0.35 per share (diluted), compared to non-GAAP adjusted net loss of $54.1 million, or $0.31 per share (diluted), for the 2021 Period. Please refer to the GAAP to Non-GAAP Reconciliation attached to this press release.
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: [pro-forma cash], 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 and year ended December 31, 2022 and 2021 are included in the tables accompanying this press release after the unaudited condensed consolidated financial statements.
About Avutometinib (VS-6766)
Avutometinib is a RAF/MEK clamp that induces inactive complexes of MEK with ARAF, BRAF and CRAF potentially creating a more complete and durable anti-tumor response through maximal RAS pathway inhibition. Avutometinib is currently in late-stage development.
In contrast to other MEK 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 other inhibitors. The U.S. Food and Drug Administration granted Breakthrough Therapy designation for the combination of Verastem Oncology’s investigational RAF/MEK clamp avutometinib, 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.
Verastem Oncology is currently conducting clinical trials with its RAF/MEK clamp avutometinib in RAS- driven tumors as part of its (Raf And Mek Program). RAMP 201 is a registration-directed trial of avutometinib in combination with defactinib in patients with recurrent LGSOC. Verastem Oncology has established clinical collaborations with Amgen and Mirati to evaluate LUMAKRAS (sotorasib) and KRAZATI (adagrasib) in combination with avutometinib in KRAS G12C mutant NSCLC as part of the RAMP 203 and RAMP 204 trials, respectively. As part of the "Therapeutic Accelerator Award" Verastem Oncology received from PanCAN, Verastem Oncology is conducting RAMP 205, a Phase 1b/2 clinical trial evaluating avutometinib and defactinib with gemcitabine/nab-paclitaxel in patients with front-line metastatic pancreatic cancer.