Verastem Inc (NASDAQ: VSTM)
Verastem had an incredibly rough day during yesterday’s trading session after announcing that they have made the decision to halt a key study. Unfortunately, the stock continues to decline today. Below, we’ll discuss why the study was halted, what we’re seeing from VSTM today, and what we can expect to see from the stock moving forward.
Verastem Ends Study Of VS-6063
For quite a while now, investors were under the impression that Verastem’s leading mesothelioma cancer treatment candidate, VS-6063, was going to be a big hit. However, the company shocked the market yesterday by announcing that they will cease the study of the treatment. Unfortunately, the studies showed that the treatment was not effective enough to warrant the cost of further studies. In a statement, Verastem’s Intern Chief Medical Officer, Lou Vaickus had the following to say…
“Malignant pleural mesothelioma is among the most aggressive and lethal cancers with only one approved therapy. With the aggressiveness of this disease, the use of single agent VS-6063 as a maintenance treatment following chemotherapy where all patients had residual disease was not sufficient…”
Following his statements, the company’s CEO, Robert Forrester offered the following…
“We are disappointed with the COMMAND outcome, but we are deeply grateful for the support and commitment from the patients participating in the study, their families, and the study investigators..”
How The Market Reacted To The News
As you would imagine when any bad news comes out with regard to a biotech stock, we tend to see declines. As a result of the mid-term stop of the COMMAND study, VSTM fell dramatically in the market yesterday, losing more than 60%. While today’s declines aren’t quite as large, the company is still following a downward path. Currently (1:40), VSTM is trading at $1.78 per share after a loss of 3.78%.
What We Can Expect To See Moving Forward
This is where things get interesting. Some investors believe that VSTM is reaching support and will likely start to edge up. Others feel as though more declines are in store for the stock. To be honest, I’m torn between the two. The reality is that powers at be at VSTM have been incredibly quiet since the announcement that they have stopped the COMMAND study. This is a bit concerning because in order to properly gauge what we can expect, we need to know more about the next moves the company plans to make. The reality is that at this point, it seems as though VSTM had all of its eggs in one basket… and the basket broke. So, without the company making an announcement with regard to next moves and offering some kind of reassurance to investors, I’m not sure that we’ll see much positive news. Who knows what the company has up its sleeve? All I know is that they’re not telling us!
What Do You Think?
Where do you think VSTM is headed and why? Let us know in the comments below!
[Image Courtesy of The Richmond Group]