Verastem (VSTM) Stock: Rocketing On Collaboration And Earnings News


Yesterday, Verastem Inc (NASDAQ: VSTM) had an overwhelmingly strong trading session yesterday after announcing a collaboration. Those gains are continuing today after the company reported its financial results for the third quarter. Today, we’ll talk about:

  • The financial results and the collaboration;
  • what we’re seeing from VSTM stock; and
  • what we’ll be wtching for ahead.

VSTM Reports Earnings

As mentioned above, Verastem is having an incredibly strong start to the trading session this morning, following up on the gains seen yesterday. Today’s movement has to do with the financial results released by the company. Here’s what we saw from the report:

  • Revenue – In terms of revenue, the comapny did overwhelmingly well. During the third quarter, the company generated $15 million in licensing fees from CSPC in September of 2018. In the same quarter last year, the comapny generated no license revenue. VSTM also generated $508,000 in net product revenue from COPIKTRA, a recently approved treatment. While this number seems small, the company didn’t receive approval for the treatment from the FDA until September 24, 2018. Considering that the quarter ended on September 30, 2018, the company made that $508,000 in the first 6 days of sales. That’s a great thing!
  • Net Loss – When it comes to net loss, the company did well. During the quarter, the net loss generated was $21.7 million, working out to $0.29 per share. In the same quarter of last year, the company generated a net loss of $23.1 million, or $0.61 per share.

In a statement, Robert Forrester, President and CEO at VSTM, had the following to offer:

COPIKTRA™ (duvelisib) receiving its first regulatory approval from the U.S. Food and Drug Administration… We were also delighted to have signed an exclusive licensing agreement with CSPC Pharmaceutical Group Limited for the development and commercialization of COPIKTRA for all oncology indications in China, further extending the global reach of our product. This is an exciting time at Verastem Oncology, and we believe this is just the beginning for both COPIKTRA and the Company. It is our goal to unlock the potential of PI3K inhibition, initially as a monotherapy, and through novel combinations to potentially expand its use to broader hematologic and solid tumors.

A Brief Note On Yesterday’s Collaboration Agreement

The gains from Verastem this morning are essentially a continuation of strong movement that we saw on the stock yesterday. However, there was a completely different story released yesterday.

VSTM announced in a press release that it has entered into a collaboration with The Leukemia & Lymphoma Society (LLS). The agreement is designed to accelerate the development of duvelisib for the treatment of patients with peripheral T-cell lymphoma, which is an aggressive type of non-Hodgkin lymphoma. The company was accepted for the Therapy Acceleration Program, which means that it has access to resources that support the development of treatments for patients with blood cancers.

VSTM said that it plans to use the added resources to conduct certain translational and clinical activities relating to the development of duvelisib for the treatment of PTCL. As a result of the collaboration, LLS will share costs of the development program with the company.

In a statement, Robert Forrester, President and CEO at VSTM, had the following to offer:

The selection of duvelisib for a TAP collaboration with the LLS underscores the potential of this innovative, oral monotherapy for patients with relapsed or refractory PTCL… This collaboration provides important funding to accelerate the advancement of duvelisib as a potential new treatment for patients battling PTCL, either as a monotherapy or in combination with other anti-cancer agents. We look forward to collaborating with the LLS team on the exciting work ahead in order to advance duvelisib through the clinic and ultimately to the patients and families suffering from this devastating cancer.

What We’re Seeing From The Stock 

One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. When it comes to Verastem, the news proved to be positive. Not only did the company announce a collaboration yesterday, the earnings report showed that in the first 6 days of COPIKTRA being on the market, the company made more than half a million dollars in net sales. So, it comes as no surprise to see that excited investors are pushing the stock on a run for the top. As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:15), VSTM is trading at $6.43 per share after a gain of $0.58 per share or 9.91% 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 commercialization of COPIKTRA as it seems to be going well. We’re also watching the continued work the company is doing to develop cancer treatments. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!


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