VSTM - Verastem: Potential Accelerated Approval Filing In H1 2024

2023-11-12 01:40:08 ET

Summary

• An application for Accelerated Approval of avutometinib + defactinib for low-grade serous ovarian cancer patients is expected in the first half of 2024.
• The ongoing RAMP-301 study is being done to keep avutometinib + defactinib for LGSC on the market or to convert Accelerated Approval to Full Approval.
• Company entered into a collaboration agreement with GenFleet Therapeutics to expand its pipeline and strengthen its position in the RAS driven cancer pathway space.
• It is expected that low grade serous ovarian cancer across the 7 major markets will reach $349.2 million by 2033.

Verastem ( VSTM ) has made great progress in being able to advance its pipeline, especially since it has done well to advance its lead program which is using its drug combination avutometinib + defactinib in the phase 2 registration-directed RAMP-201 study. Matter of fact, it is expecting that it will apply for Accelerated Approval of this drug combination for the treatment of patients with low grade serous ovarian cancer [LGSOC] in the 1st half of 2024. The company is also already in the process of advancing a phase 3 confirmatory study of avutometinib + defactinib for the treatment of these LGSOC patients known as RAMP-301. The goal of this study is to convert the avutometinib combination to Full Drug approval just in case Accelerated Approval is given. If Accelerated Approval is not given, then this study might serve as a basis to possibly eventually receive full regulatory approval for this avutometinib + defactinib drug combination anyways. In order to bring itself as a possible leader in the RAS driven cancer pathway space, it has also developed a collaboration agreement with GenFleet Therapeutics in order to advance three clinical candidates. Such a partnership is important, because it could expand the pipeline with additional shots on goal.

Possible Accelerated Approval With Low Grade Serous Ovarian Cancer Program

One of the main reasons why I wanted to bring up this biotech to investors is because there is a major catalyst opportunity to capitalize on, which is expected to happen in the 1st half of 2024. That is when Verastem intends to apply for Accelerated Approval of avutometinib + defactinib for the treatment of patients with low-grade serious ovarian cancer [LGSC]. The reason for such a filing is because of mature data that has been coming from the phase 2 registration-directed trial known as RAMP-201 , along with the investigator-initiated FRAME trial as well. It is important to note that LGSC represents approximately 2% to 5% of ovarian cancers . Still, the biotech plans to bring about multiple regulatory applications for the treatment of this specific patient population across the globe. It is expected that low grade serous ovarian cancer across the 7 major markets will reach $349.2 million by 2033 . This is going to be a pretty decent market opportunity for sure. However, there is something else to consider, which is the possible expansion opportunity with respect to avutometinib. The reason why I say that is because this RAS pathway inhibitor is being explored in several other combination studies. Such studies being deployed are as follows:

• RAMP-203 : avutometinib in combination with sotorasib [LUMAKRAS] for the treatment of patients with KRAS G12C mutant non-small cell lung cancer [NSCLC] patients
• RAMP-204 : avutometinib with Mirati Therapeutics ( MRTX ) KRAZATI [adagrasib] for the treatment of patients with KRAS G12c mutant NSCLC
• RAMP-205 : avutometinib + defactinib + GEMZAR + ABRAXANE in patients with metastatic adenocarcinoma of the pancreas

The point here is that while the initial indication is only on avutometinib for LGSC, there is an opportunity to use this drug to go after many other RAS Pathway driven cancers. Updated data for the avutometinib + defactinib combination has been pretty good thus far, especially with the latest updated data that was just presented at a medical conference. It was noted that when LGSC patients were given this combination treatment, the overall response rate in patients given prior 1-3 therapies was 45.5%. For patients who were given ?4 lines of therapy, the ORR was 44.4%.

Potential To Expand Pipeline Even Further

As I noted above, there is potential for Verastem to be able to expand its pipeline even further. This would be through the use of its collaboration it made with GenFleet in order to advance programs that will primarily target RAS pathway-driven cancers. It is expected that about three molecules will be developed from this specific program. Verastem will have exclusive rights to obtain a license for each compound after pre-determined milestones in phase 1 studies are met. This biotech is going to end up having development and commercialization rights outside of China for each compound, while GenFleet would retain the same rights inside of China only. While this program is early in advancement, it is another way that it might provide Verastem with additional shots on goal in the targeting of the RAS pathway. This seems like a very good partnership in my opinion and that's because each of these companies bring something to the table. Genfleet brings on board the ability to properly develop KRAS G12C inhibitors and then Verastem brings RAS biology and RAS Pathway cancer drug development.

Financials

According to the 10-Q SEC Filing , Verastem had cash, cash equivalents and investments of $165.7 million as of September 30, 2023. The company might need to raise more cash, because just the other day it filed an S-3 form SEC Filing , whereby it intends to raise approximately $300 million through the selling of common stock, preferred stock, warrants and debt securities. This means it intends to raise cash soon in the coming months, although it is not clear on when it will do so. However, there is another option that it could take should it choose to go such a route. Why do I state that? That's because back in 2021 it entered into a Sales Agreement with Cantor so that it could offer and sell up to $100 million from time to time of its common stock. It used this ATM agreement a few times in 2022 to raise cash, but from what I see it has not yet done so in 2023. In the three and nine months ending September 30th of 2023, there were no sales under this August 2021 ATM agreement.

Risks To Business

There are several risks that investors have to be aware of before investing in Verastem Oncology. The first risk to consider would be with respect to the possible Accelerated Approval filing of avutometinib + defactinib, which is being advanced for the treatment of patients with low-grade serous ovarian cancer [LGSC]. That's because even though it is the goal of this company to file for Accelerated Approval using this drug for the treatment of this patient population, there is no guarantee that the FDA will accept it, nor that Accelerated Approval will be granted for it. A second risk to then consider would be the ongoing RAMP-301 study, which is a confirmatory study for the avutometinib + defactinib combination for the treatment of patients with LGSC. That's because even if Accelerated Approval is somehow achieved by the FDA for it, then in order for the biotech to keep this drug combination on the market, it will need to achieve the primary endpoint of the RAMP-301 study.

A third risk to consider would be the advancement of avutometinib in other combination studies for the treatment of RAS-pathway driven cancers. Even though avutometinib worked well with defactinib for low-grade serous ovarian cancer, there is no guarantee that it can be successfully combined with these other RAS pathway inhibiting drugs. A fourth risk to consider would be with respect to the collaboration agreement that was made with GenFleet. That's because even though the goal is to advance up to 3 clinical candidates for RAS-pathway inhibition, there is no assurance that such drugs will be advanced through multiple stages of testing successfully. The fifth and final risk to consider would be with respect to the financial position that this biotech is in. That's because it just filed a $300 million mixed securities shelf with the SEC and it could use this to raise additional cash in the coming months.

Conclusion

Verastem has made great progress in being able to advance its pipeline, especially since it has been able to achieve positive results from a few of its studies using the avutometinib + defactinib combination to treat patients with low-grade serous ovarian cancer. Positive data was achieved from both the phase 2 registration directed trial RAMP-201 and the investigator-initiated FRAME trial. Along with the recently presented data from a planned subgroup analysis of the phase 2 RAMP-201 study, which was presented as a late-breaking abstract as an oral presentation. There are two expansion opportunities I also highlighted above, whereby Verastem could leverage its expertise. One expansion would be with respect to the testing of avutometinib with other RAS-targeting drugs against cancers like KRAZATI and LUMAKRAS. A second expansion would be with the collaboration that was established with GenFleet as well. However, this program is very early in terms of development, especially since no phase 1 studies have yet to be advanced. Still, this company is leveraging its expertise in a good way by advancing a few drugs that have done well against a RAS pathway driven tumors.

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