Verastem (VSTM) Stock: Headed Up On Exclusive Licensing Agreement


Verastem Inc VSTM Stock NewsVerastem Inc (NASDAQ: VSTM) is having an overwhelmingly strong start to the trading session this morning, and for good reason. The company announced that it has entered into an exclusive license agreement just after presenting data at the 2018 ASCO Annual Meeting yesterday. With all of the good news, investors are excited, sending the stock screaming for the top. Today, we’ll talk about:

  • The licensing agreement;
  • what we’re seeing from the stock;
  • and what we’ll be watching with regard to VSTM ahead.

VSTM Announces Licensing Agreement

As mentioned above, Verastem is having an incredibly strong start to the trading session this morning. After announcing data at the ASCO annual meeting yesterday, the company announced an exclusive licensing agreement today. In a press release issued early this morning, the company announced that it has entered into an exclusive licensing agreement with Yakult Honsha. Under the agreement, Yakult will develop and commercialize duvelisib, a product developed by VSTM, in Japan. In particular, the drug is designed for treatment, prevention or diagnosis of oncology indications.

As a result of the licensing agreement, VSTM will receive a one-time upfront payment of $10 million. The company will also be eligible to receive up to an additional $90 million in commercial and development milestone payments. Verastem will also receive double-digit royalties on future net sales of duvelisib in Japan. In a statement, Masanori Ito, Head of the Pharmaceutical Business Division, Managing Executive Officer, and Member of the Board at Yakult, had the following to offer with regard to the deal with VSTM:

In Japan, current therapies to treat CLL/SLL and FL are extremely limited and duvelisib has robust clinical data supporting its efficacy and safety in both indications, which we can build upon… We are eager to collaborate with Verastem to develop duvelisib in these initial hematologic malignancies, and then plan to later expand development to include the additional indications of PTCL and DLBCL. We believe this collaboration underscores our commitment to innovation, growing our oncology franchise, and commercializing medicines that positively impact the lives of patients in Japan.

The above statement was followed up by Robert Forrester, President and CEO at VSTM. Here’s what he had to offer:

This agreement is an important, validating achievement for both duvelisib and Verastem Oncology and speaks to the significant global potential of this novel therapeutic for a broad range of hematologic malignancies… Yakult is an established oncology leader in Japan that successfully markets several branded anti-cancer therapies, including Elplat® and Campto®. We look forward to working with the world-class development, regulatory and commercial teams at Yakult as they advance oral duvelisib toward commercialization in Japan.

What We’re Seeing From The Stock 

As investors, one of the first lessons that we learned is that the news moves the market. In the case of Verastem, the news proved to be overwhelmingly positive. After all, the licensing agreement has the ability to lead to strong revenue. So, it’s no surprise to see that the stock is making a run for the top in the market today. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:40), VSTM is trading at $5.53 per share after a gain of $0.39 per share or 7.59% thus far today.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on VSTM. In particular, we’re interested in following the story surrounding the continued development of duvelisib as well as the licensing agreement surrounding it. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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