VSTM - Verastem: Narrowed Market And Less Compelling Efficacy Warrant Rating Downgrade
2024-05-26 01:42:29 ET
Summary
- Verastem's stock plummeted after updates showed reduced efficacy in cancer treatment trials, causing a reassessment of strategy.
- Updated clinical trial results show a significant drop in response rates, suggesting less robust efficacy than earlier believed.
- Financially, Verastem has only a year of cash runway and faces significant dilution risks to extend it.
- Downgrade the recommendation to 'hold' due to increased risks and market volatility associated with microcap stocks.
Verastem Reevaluates Strategy After Disappointing Cancer Trial Results
Verastem's ( VSTM ) stock has cratered 60% since my "speculative buy" recommendation in August. Back then, I was interested in the company's prospects in ovarian cancer with their unique RAF/MEK clamp, avutometinib, in combination with their FAK inhibitor, defactinib ( RAMP 201 clinical trial ). The combination achieved a 45% objective response rate (ORR) in 29 patients, with a minimum follow-up of 12 months, in recurrent low-grade serous ovarian cancer (LGSOC), which is difficult to treat....
Verastem: Narrowed Market And Less Compelling Efficacy Warrant Rating Downgrade