On November 4, 2021 Verastem Oncology (Nasdaq: VSTM), a biopharmaceutical company committed to advancing new medicines for patients with cancer, reported financial results for the three months ended September 30, 2021 and highlighted recent progress (Press release, Verastem, NOV 4, 2021, View Source [SID1234594539]).
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"The third quarter was marked by several significant milestones for Verastem as we continued to advance our development program to establish VS-6766 as a backbone therapy across RAS pathway-driven solid tumors, including our entry into a clinical collaboration with Amgen to evaluate VS-6766 in combination with LUMAKRAS (sotorasib) in patients with KRAS G12C-mutant NSCLC. This Phase 1/2 study will investigate the potential of a more complete vertical blockade along the RAS pathway," said Brian Stuglik, Chief Executive Officer of Verastem Oncology. "We were also pleased to highlight updated data from the investigator-initiated Phase 1/2 FRAME study that were presented at ESMO (Free ESMO Whitepaper) 2021 and continue to demonstrate encouraging response rates, along with 23.0 months PFS, in patients with low-grade serous ovarian cancer (LGSOC), including in patients who had previously received a MEK inhibitor."
Recent Corporate Highlights
Low-Grade Serous Ovarian Cancer (LGSOC)
Updated data from the LGSOC cohort of the ongoing, investigator-sponsored Phase 1/2 FRAME study evaluating VS-6766 in combination with defactinib in patients with LGSOC were presented at the European Society of Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress 2021. Results show encouraging response rates and progression-free survival (PFS). The initial results of the FRAME study were the basis for the U.S. Food and Drug Administration granting Breakthrough Therapy designation for the combination in LGSOC.
Median PFS across all patients was 23.0 months (n=24)
Overall response rate (ORR) across all patients was 46% (11 of 24 patients)
ORR across patients with KRAS mutant LGSOC was 64% (7 of 11 patients)
ORR across patients with KRAS wild type LGSOC was 44% (4 of 9 patients)
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)
Announced strategic partnership with Amgen to evaluate the safety, tolerability, and efficacy of VS-6766 in combination with LUMAKRAS (sotorasib), Amgen’s KRAS G12C inhibitor, in patients with locally advanced or metastatic KRAS G12C-mutant NSCLC. This Phase 1/2 clinical trial is expected to initiate by the end of 2021.
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
Appointed Michelle Robertson to join the Verastem Board of Directors. Ms. Robertson is the Chief Financial Officer at Editas Medicine and brings more than 25 years of Finance and Commercial Operations leadership to the Board.
Appointed Louis J. Denis, M.D., as Chief Medical Officer. Dr. Denis brings more than 25 years of clinical development and oncology experience to Verastem having served at several biotech and pharmaceutical companies during his career, including Asana BioSciences, Boehringer Ingelheim and Pfizer.
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, including $3.2 million in future interest payments that would have been payable through November 1, 2023.
Third Quarter 2021 Financial Results
Verastem Oncology ended the third quarter of 2021 with cash, cash equivalents and investments of $103.4 million.
Total revenue for the three months ending September 30, 2021 (2021 Quarter) was $0.0 million, compared to $78.6 million for the three months ended September 30, 2020 (2020 Quarter). Revenue for the 2020 Quarter was comprised of (i) $70.0 million recognized for the upfront payment made as part of the COPIKTRA sale to Secura Bio, Inc., (ii) $5.8 million of net product revenue, and (iii) $2.8 million of license and collaboration revenue primarily comprised of $2.5 million for Sanofi achieving two development milestones under the license and collaboration agreement between Sanofi and Verastem.
Total research and development (R&D) and selling, general and administrative (SG&A) expenses for the 2021 Quarter were $14.8 million, compared to $31.6 million for the 2020 Quarter.
SG&A expenses for the 2021 Quarter were $5.5 million, compared to $20.6 million for the 2020 Quarter. The decrease of $15.1 million, or 73%, 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.
R&D expenses for the 2021 Quarter were $9.3 million, compared to $11.0 million for the 2020 Quarter. The decrease of $1.7 million, or 15%, was primarily related to lower contract research organization costs, consulting fees, and clinical supply costs.
Net (loss) for the 2021 Quarter was $(22.8) million, or $(0.13) per share (basic and diluted), compared to net income of $13.1 million, or $0.08 per share (basic and diluted), for the 2020 Quarter.
For the 2021 Quarter, non-GAAP adjusted net (loss) was $(12.8) million, or $(0.07) per share (diluted), compared to non-GAAP adjusted net income of $18.8 million, or $0.11 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 has 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) income and non-GAAP net (loss) income 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 nine months ended September 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 low-grade serous ovarian cancer (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 focal adhesion kinase (FAK) inhibitor, for the treatment of all patients with recurrent LGSOC regardless of KRAS status after one or more prior lines of therapy, including platinum-based chemotherapy.