On October 29, 2019 Verastem, Inc. (Nasdaq: VSTM), operating as Verastem Oncology (or "the Company"), focused on developing and commercializing medicines seeking to improve the survival and quality of life of cancer patients, reported financial results for the three months ended September 30, 2019, and provided an overview of recent accomplishments and clinical development progress for duvelisib (COPIKTRA) (Press release, Verastem, OCT 29, 2019, View Source [SID1234549994]).
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"In the third quarter, we achieved $9.0 million in revenue, including $4.0 million in net product revenue from COPIKTRA, a 33% increase over the prior quarter, and we remain on track to achieve the revenue that we have guided for this year. We continue to make progress with COPIKTRA sales as the intent to prescribe and new prescriber base grows week over week due to solid progress across our commercial efforts, including physician education and contracting. We also believe in the long-term potential for our current COPIKTRA indications," said Brian Stuglik, Chief Executive Officer of Verastem Oncology. "We are deeply committed to our long-term strategy to achieve sustainable growth and progress our mission on behalf of patients. In order to achieve these ambitious goals and provide us with greater financial flexibility going forward, we are streamlining our organization and reducing operating expenses, which will result in approximately $25 million in annualized cost savings next year."
Key Third Quarter 2019 and Recent Accomplishments
Corporate and Financial
Implementing a Corporate Restructuring as Part of the Long-Term "6-2-5" Strategy – Verastem Oncology continues to deliver on its "6-2-5" strategic plan in which we aim to narrow the gap between revenue and commercial spend by year end 2019, achieve cash flow break-even for both the commercial and clinical COPIKTRA program by mid-2021, and the indications for COPIKTRA are broadened with at least one additional marketed product, along with a pipeline of assets in development by mid-2024. In order to support this strategy, the company will be reducing overall operating expenses, including the elimination of approximately 40 current positions across all functions. The workforce reduction is designed to streamline operations, speed execution, and reflect the focused, account-based approach in the field. The Company expects minimal impact on top-line revenue results with these changes. The overall reduction in operating expenses is expected to result in approximately $25 million in annualized cost savings in 2020. Verastem Oncology estimates that it will incur approximately $1.0 million in pre-tax charges for severance and other costs related to the workforce reduction, the majority of which will be incurred in 2019.
Signed Exclusive License Agreement with Sanofi for the Development and Commercialization of Duvelisib in Select Eurasian Territories – In July 2019, the Company announced its entry into an exclusive license agreement with Sanofi, under which Verastem Oncology granted exclusive rights to Sanofi to develop and commercialize products containing COPIKTRA in Russia and CIS, Turkey, the Middle East and Africa. Under the terms of the agreement, Verastem Oncology received an upfront payment of $5 million (USD) and is eligible to receive aggregate payments of up to $42 million if certain development and sales milestones are successfully achieved, plus double-digit percentage royalties based on future net sales of COPIKTRA in the licensed territories. In exchange, Sanofi received exclusive rights to develop and commercialize COPIKTRA and hold the marketing authorization and product license for COPIKTRA in the licensed territories. Additionally, Sanofi will have the right to collaborate with Verastem Oncology on certain global development and clinical trial activities.
COPIKTRA (duvelisib)
Ongoing Commercial Rollout of COPIKTRA in the United States (U.S.) – COPIKTRA, the Company’s oral inhibitor of phosphoinositide 3-kinase (PI3K), and the first FDA-approved dual inhibitor of PI3K-delta and PI3K-gamma continues to gain momentum in the U.S. generating revenues of $4.0 million during the third quarter of 2019, a 33% increase over the prior quarter. As of the end of the third quarter 2019, the number of prescribing physicians had increased by over 30%, compared to the end of the prior quarter.
Yakult Doses First Patient in Japanese Bridging Study Evaluating COPIKTRA in Relapsed or Refractory CLL/SLL – In early October, Verastem Oncology’s partner Yakult Honsha Co., Ltd. (Yakult) dosed the first patient in a Phase 1b Japanese bridging study evaluating COPIKTRA in patients with relapsed or refractory CLL/SLL following at least one prior therapy. Yakult’s multicenter, open-label Phase 1b study is expected to enroll approximately 10 patients and the primary endpoint of the study is objective response rate. Secondary endpoints of the study include overall survival, progression free survival and safety. This Phase 1b study is expected to serve as a bridging study based on the efficacy and safety observed in Verastem Oncology’s Phase 3 DUO study. The results of the Phase 1b bridging study are expected to form the basis of a regulatory submission for COPIKTRA for the treatment of relapsed or refractory CLL/SLL in Japan.
Duvelisib Receives Orphan Drug Designation from FDA for the Treatment of T-Cell Lymphoma – In early October, duvelisib (COPIKTRA) received orphan drug designation from the FDA for use in the treatment of T-Cell lymphoma. The designation was created to encourage the development of drugs that may provide significant benefit to patients suffering from rare diseases. Duvelisib is not currently approved for the treatment of T-cell lymphoma. The Company recently completed the dose optimization/dose selection phase of the PRIMO study in patients with relapsed or refractory peripheral T-cell lymphoma (PTCL) and has submitted the data for presentation at the American Society of Hematology (ASH) (Free ASH Whitepaper) 2019 Annual Meeting in December. The registration-directed portion of the PRIMO study is currently on going and is being conducted in the U.S., Europe and Japan.
Presented New Preclinical Duvelisib Data at the 5th International Conference on New Concepts in Lymphoid Malignancies– In early October, an abstract was presented at the meeting that showed superior anti-cancer activity of the dual PI3K-delta/gamma inhibitor duvelisib compared to the PI3K-delta inhibitor idelalisib in preclinical models of mantle cell lymphoma (MCL). Verastem Oncology’s goal is to expand into additional lymphoid malignancy indications and these data provide additional support for the future study of duvelisib through clinical trials in patients with MCL. Duvelisib is not approved for use in MCL.
Presented Seven COPIKTRA Abstracts at Two Prestigious Medical Meetings – Throughout September, Verastem Oncology continued to have a strong scientific presence for COPIKTRA at important medical congresses. The Company presented a total of seven COPIKTRA abstracts at two prestigious medical oncology meetings; the 18th Annual International Workshop on Chronic Lymphocytic Leukemia (iwCLL) and the Society of Hematologic Oncology 2019 Annual Meeting. Collectively, the presented abstracts highlighted a wide range of duvelisib clinical data, including data from the Phase 3 DUO study in patients with relapsed or refractory CLL/SLL, dose modification data from the Phase 3 DUO study, data from a post-hoc analysis evaluating the effect of COPIKTRA on lymphocytosis, including in patients with high-risk factors, and data from the Phase 2 DYNAMO in patients with refractory marginal zone lymphoma. These presented data continue to support the ongoing commercialization of COPIKTRA.
Third Quarter 2019 Financial Results
Total revenue for the three months ended September 30, 2019 (2019 Quarter) was $9.0 million. Net product revenue for the 2019 Quarter was $4.0 million, compared to $0.5 million for the three months ended September 30, 2018 (2018 Quarter), following the FDA’s approval of COPIKTRA on September 24, 2018. License and collaboration revenue for the 2019 Quarter was $5.0 million, compared to $15.0 million for the 2018 Quarter. The 2018 Quarter included license revenue of $15.0 million related to an upfront payment pursuant to a license and collaboration agreement executed between Verastem Oncology and CSPC Pharmaceutical Group Limited in September 2018. The 2019 Quarter includes a $5.0 million upfront payment received pursuant to a license and collaboration agreement executed between Verastem Oncology and Sanofi in July 2019.
Total operating expenses for the 2019 Quarter were $35.1 million, compared to $41.4 million for the second quarter of 2019 and compared to $37.1 million for the 2018 Quarter.
Research and development (R&D) expense for the 2019 Quarter was $12.2 million, compared to $11.6 million for the 2018 Quarter. The increase of $0.6 million, or 5.2%, was primarily related to an increase of $0.4 million in contract research organizations (CRO) costs and an increase of $0.3 million related to personnel costs, including non-cash stock-based compensation, partially offset by a decrease of $0.1 million in consulting costs. The $0.4 million increase in CRO costs is primarily related to an increase of $1.5 million for the Company’s planned DUETTO and TEMPO studies, partially offset by a decrease of $1.0 million resulting from site closures for the Phase 3 DUO and Phase 2 DYNAMO studies as patients continue to complete treatment.
Selling, general and administrative expense for the 2019 Quarter was $22.2 million, compared to $25.4 million for the 2018 Quarter. The decrease of $3.2 million, or 12.6%, was primarily due to a decrease of $2.3 million in consulting and professional fees, primarily related to the support of commercial launch preparation activities in the 2018 Quarter and a decrease of $0.9 million in personnel related costs, including non-cash stock-based compensation.
Net loss for the 2019 Quarter was $30.1 million, or $0.41 per share (basic and diluted), compared to $21.7 million, or $0.29 per share (basic and diluted), for the 2018 Quarter.
For the 2019 Quarter, non-GAAP adjusted net loss was $26.2 million, or $0.35 per share, compared to non-GAAP adjusted net loss of $19.4 million, or $0.26 per share, for the 2018 Quarter. Please refer to the GAAP to Non-GAAP Reconciliation attached to this press release.
As of September 30, 2019, Verastem Oncology had cash, cash equivalents and short-term investments of $160.2 million.
Financial Guidance for Fiscal 2019
Verastem Oncology is reiterating its full-year 2019 guidance and expects net product revenue for COPIKTRA to be in the range of $12-14 million. This guidance is based on product revenue to date, current run rates and near-term expectations.
Conference Call and Webcast Information
The Verastem Oncology management team will host a conference call and webcast today, Tuesday, October 29, 2019, at 4:30 PM (ET). The call can be accessed by dialing (877) 341-5660 (U.S. and Canada) or (315) 625-3226 (international), five minutes prior to the start of the call and providing the passcode 5785818.
The live, listen-only webcast of the conference call can be accessed by visiting the investors section of the Company’s website at www.verastem.com. A replay of the webcast will be archived on the Company’s website for 90 days following the call.
About Chronic Lymphocytic Leukemia/Small Lymphocytic Lymphoma
Chronic lymphocytic leukemia (CLL) and small lymphocytic lymphoma (SLL) are cancers that affect lymphocytes and are essentially the same disease, with the only difference being the location where the cancer primarily occurs. When most of the cancer cells are located in the bloodstream and the bone marrow, the disease is referred to as CLL, although the lymph nodes and spleen are often involved. When the cancer cells are located mostly in the lymph nodes, the disease is called SLL. The symptoms of CLL/SLL include a tender, swollen abdomen and feeling full even after eating only a small amount. Other symptoms can include fatigue, shortness of breath, anemia, bruising easily, night sweats, weight loss, and frequent infections. However, many patients with CLL/SLL will live for years without symptoms. In 2018, there were approximately 200,000 patients in the United States affected by CLL/SLL with nearly 20,000 new diagnoses. While there are therapies currently available, real-world data reveals that a significant number of patients either relapse following treatment, become refractory to current agents, or are unable to tolerate treatment, representing a significant medical need. The potential of additional oral agents, particularly as a monotherapy that can be used in the general community physician’s armamentarium, may hold significant value in the treatment of patients with CLL/SLL.
About Follicular Lymphoma
Follicular lymphoma (FL) is typically a slow-growing or indolent form of non-Hodgkin lymphoma (NHL) that arises from B-lymphocytes, making it a B-cell lymphoma. In 2018, this lymphoma subtype accounted for 20 to 30 percent of all NHL cases, with more than 140,000 people in the United States with FL and more than 13,000 newly diagnosed patients. Common symptoms of FL include enlargement of the lymph nodes in the neck, underarms, abdomen, or groin, as well as fatigue, shortness of breath, night sweats, and weight loss. Often, patients with FL have no obvious symptoms of the disease at diagnosis. Follicular lymphoma is usually not considered to be curable, but more of a chronic disease, with patients living for many years with this form of lymphoma. The potential of additional oral agents, particularly as a monotherapy that can be used in the general community physician’s armamentarium, may hold significant value in the treatment of patients with FL.
About Peripheral T-Cell Lymphoma
Peripheral T-cell lymphoma (PTCL) is an aggressive type of non-Hodgkin lymphoma (NHL) that develops in mature white blood cells called "T cells" and "natural killer (NK) cells"1 which circulate with the lymphatic system.2 PTCL accounts for between 10-15% of all non-Hodgkin lymphomas (NHLs) and generally affects people aged 60 years and older.1 Although there are many different subtypes of peripheral T-cell lymphoma, they often present in a similar way, with widespread, enlarged, painless lymph nodes in the neck, armpit or groin.2 There is currently no established standard of care for patients with relapsed or refractory disease.1
About COPIKTRA (duvelisib)
COPIKTRA is an oral inhibitor of phosphoinositide 3-kinase (PI3K), and the first approved dual inhibitor of PI3K-delta and PI3K-gamma, two enzymes known to help support the growth and survival of malignant B-cells. PI3K signaling may lead to the proliferation of malignant B-cells and is thought to play a role in the formation and maintenance of the supportive tumor microenvironment.3,4,5 COPIKTRA is indicated for the treatment of adult patients with relapsed or refractory chronic lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL) after at least two prior therapies and relapsed or refractory follicular lymphoma (FL) after at least two prior systemic therapies. COPIKTRA is also being developed by Verastem Oncology for the treatment of peripheral T-cell lymphoma (PTCL), for which it has received Fast Track status, and is being investigated in combination with other agents through investigator-sponsored studies.6 For more information on COPIKTRA, please visit www.COPIKTRA.com. Information about duvelisib clinical trials can be found on www.clinicaltrials.gov.