Verastem Reports Year-End 2017 Financial Results

BOSTON–(BUSINESS WIRE)–Verastem, Inc. (NASDAQ:VSTM), focused on developing and commercializing
drugs to improve the survival and quality of life of cancer patients,
today reported financial results for the year ended December 31, 2017
and provided an overview of certain corporate developments and plans.

The last year has been marked by significant achievement for Verastem
with the reporting of positive data from the pivotal Phase 3 DUO™ study
and culminating in the recent submission of a New Drug Application (NDA)
to the U.S. Food and Drug Administration (FDA) seeking full approval for
duvelisib for the treatment of relapsed or refractory chronic
lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL) and
accelerated approval for the treatment of relapsed or refractory
follicular lymphoma (FL),” said Robert Forrester, President and Chief
Executive Officer of Verastem. “As we await the potential acceptance and
approval of the duvelisib NDA, we are diligently working to build our
commercial infrastructure and preparing for our first potential product
launch. I am delighted that Joe Lobacki has joined the team. Joe’s
formidable expertise in commercialising oncology drugs at Medivation,
Micromet and Genzyme positions Verastem to successfully execute on our
launch plan for duvelisib in the US.”

Fourth Quarter 2017 and Recent Highlights:

Duvelisib

  • Duvelisib NDA submitted to FDA – In early February 2018,
    Verastem submitted an NDA to the FDA seeking full approval for its
    lead product candidate duvelisib, a first-in-class oral dual inhibitor
    of phosphoinositide-3-kinase (PI3K)-delta and PI3K-gamma, for the
    treatment of relapsed or refractory CLL/SLL and accelerated approval
    for the treatment of relapsed or refractory FL. The NDA is supported
    by clinical data from the randomized Phase 3 DUO™ study, which met its
    primary endpoint by demonstrating statistically significant efficacy,
    along with a consistent and manageable safety profile, for duvelisib
    monotherapy in patients with relapsed or refractory CLL/SLL. The NDA
    is also supported by results from the Phase 2 DYNAMO™ study, which
    also met its primary endpoint by demonstrating a statistically
    significant improvement in overall response rate (ORR) compared to an
    historical control in patients with indolent non-Hodgkin’s lymphoma
    that are double-refractory to both rituximab and chemotherapy or
    radioimmunotherapy.
  • Clinical Data from Pivotal Phase 3 DUO Study Highlighted in an
    Oral Presentation at ASH 2017
    – Verastem presented results
    from the Phase 3 DUO study at the American Society of Hematology 2017
    Annual Meeting (ASH 2017). The presentation, titled “Results from the
    Phase 3 DUO Trial: A Randomized Comparison of Duvelisib vs Ofatumumab
    in Patients with Relapsed/Refractory Chronic Lymphocytic Leukemia or
    Small Lymphocytic Lymphoma,” was presented by principal investigator
    Ian Flinn, M.D., Ph.D., Director of the Blood Cancer Research Program
    at Sarah Cannon Research Institute. The DUO study met its primary
    endpoint with oral duvelisib monotherapy achieving a statistically
    significant improvement in progression free survival (PFS) compared to
    ofatumumab in patients with relapsed or refractory CLL/ SLL per a
    blinded independent review committee (IRC) using modified
    international workshop on CLL (iwCLL) and revised International
    Working Group (IWG) Response Criteria (median PFS=13.3 months versus
    9.9 months, respectively; HR=0.52, p<0.0001), representing a 48% reduction in the risk of progression or death. Oral duvelisib monotherapy also achieved a statistically significant improvement in ORR compared to ofatumumab (74% vs 45%, respectively; p<0.0001), and reduced lymph node burden of less than 50% in most patients compared to ofatumumab (85% vs 16%, respectively). Duvelisib monotherapy demonstrated a manageable safety profile, with results from this study consistent with the well-characterized safety profile of duvelisib monotherapy in patients with advanced hematologic malignancies in previous studies. For duvelisib-treated patients, the median time on treatment was 50.3 weeks (range, 0.9 - 160.0) compared to 23.1 weeks (range, 0.1 - 26.1) for ofatumumab.
  • Additional Duvelisib Abstracts Presented at ASH 2017
    Along with the Phase 3 DUO results, two additional duvelisib abstracts
    were presented at ASH 2017. The abstract, titled “In Vitro, In Vivo,
    and Parallel Phase I Evidence Support the Safety and Activity of
    Duvelisib, a PI3K-δ,γ Inhibitor, in Combination with Romidepsin or
    Bortezomib in Relapsed/Refractory T-Cell Lymphoma,” was given as an
    oral presentation by Alison Moskovitz, M.D., Memorial Sloan Kettering
    Cancer Center.
  • Preclinical Data Highlighting the Synergistic Effects in
    Combination with Immunotherapy Presented at the American Society of
    Clinical Oncology Clinical Immuno-Oncology Symposium (ASCO-SITC)

    In January 2018, Jonathan Pachter, Ph.D., Chief Scientific Officer of
    Verastem, presented preclinical data highlighting the potential
    synergistic effects of duvelisib in combination with immune checkpoint
    or co-stimulatory antibodies in B-cell lymphoma. This data, outlined
    in a poster titled “The Dual PI3K-δ,γ Inhibitor Duvelisib Stimulates
    Anti-Tumor Immunity and Enhances Efficacy of Immune Checkpoint and
    Co-Stimulatory Antibodies in a B-Cell Lymphoma Model,” supports the
    further exploration of duvelisib in combination with anti-PD-1/PD-L1
    or co-stimulatory antibodies in patients with B-cell malignancies.

Defactinib

  • Defactinib Preclinical Abstract Presented at ASH 2017 – A
    poster describing preclinical data in combination with B-cell lymphoma
    2 (BCL-2) was presented at ASH 2017. The abstract, titled
    Combinatorial Inhibition of Focal Adhesion Kinase and BCL-2 in AML,”
    was presented by Xiangmeng Wang, Ph.D., MD Anderson Cancer Center.

Corporate and Financial

  • Joseph Lobacki Appointed Chief Commercial Officer – In
    January 2018, Verastem announced the appointment of Joseph Lobacki as
    Executive Vice President and Chief Commercial Officer. Mr. Lobacki,
    formerly Chief Commercial Officer and Executive Council Member at
    Medivation, is responsible for overseeing the commercial strategy and
    execution for Verastem’s lead product candidate, duvelisib. Mr.
    Lobacki is a skilled leader in commercializing oncology drugs and his
    strong experience in hematologic oncology commercialization and
    marketing make him an invaluable addition to the Verastem team.
  • Additional Financing Through Increasing Debt Facility to up to
    $50.0 Million and a $25.0 Million Public Offering
    In
    January 2018, Verastem amended its loan and security agreement with
    Hercules Capital, Inc. (Hercules), increasing its existing borrowing
    limit under the loan facility from up to $25.0 million to up to $50.0
    million in financing, subject to certain conditions of funding. In
    December 2017, the Company successfully completed an underwritten
    public offering of shares of common stock with gross proceeds totaling
    approximately $25.0 million.
  • NgocDiep Le, MD, PhD, Appointed Chief Medical Officer – In
    October 2017, Verastem announced the appointment of Dr. Le as its
    Chief Medical Officer. A trained medical oncologist, Dr. Le is board
    certified in internal medicine and has 15 years of drug development
    experience across all phases in both solid and liquid tumors, with
    specialized expertise in clinical development. Dr. Le joins Verastem
    from MedImmune (a wholly owned subsidiary of AstraZeneca) where she
    served as Vice President, Immuno-Oncology Innovative Medicines and led
    the product development teams for multiple high-priority
    immuno-oncology assets. Dr. Le oversees the development strategy and
    activities for Verastem’s core assets, duvelisib and defactinib.
  • Paid First Development Milestone to Infinity Pharmaceuticals
    – In October 2017, Verastem paid to Infinity Pharmaceuticals, Inc.
    (Infinity) a $6.0 million milestone payment, representing the first
    milestone under the duvelisib license agreement. This milestone is
    based on the achievement of positive top-line results from the Phase 3
    DUO study evaluating the efficacy and safety of duvelisib in patients
    with relapsed or refractory CLL/SLL. The milestone was paid using
    funds drawn from Verastem’s existing loan and security agreement with
    Hercules.

Full Year 2017 Financial Results

Net loss for the year ended December 31, 2017 (2017 Period) was $67.8
million, or $1.76 per share, as compared to a net loss of $36.4 million,
or $0.99 per share, for the year ended December 31, 2016 (2016 Period).
Net loss includes non-cash stock-based compensation expense of $5.0
million and $6.2 million for the 2017 Period and 2016 Period,
respectively. Verastem used $57.3 million of cash for operating
activities during the 2017 Period.

Research and development expense for the 2017 Period was $46.4 million
compared to $19.8 million for the 2016 Period. The $26.6 million
increase from the 2016 Period to the 2017 Period was primarily related
to an increase of $13.4 million in external clinical research
organization expense for outsourced biology, chemistry, development and
clinical services, which includes our clinical trial costs, the
achievement of a $6.0 million milestone pursuant to our license
agreement with Infinity, an increase of $5.1 million in consulting fees,
and an increase in personnel related costs of $1.9 million.

General and administrative expense for the 2017 Period was $21.4 million
compared to $17.2 million for the 2016 Period. The increase of $4.2
million from the 2016 Period to the 2017 Period primarily resulted from
increases in consulting and professional fees of $4.4 million, including
$2.5 million related to commercial launch preparation, and an increase
in personnel costs of $1.0 million. These increases were partially
offset by a decrease in stock-based compensation expense of $1.5 million.

As of December 31, 2017, Verastem had cash, cash equivalents and
investments of $86.7 million compared to $80.9 million as of December
31, 2016.

The number of outstanding common shares as of December 31, 2017, was
50,800,908.

Financial Guidance

Based on our current operating plans, we expect to have sufficient cash,
cash equivalents and investments to fund our current operating plan and
capital expenditure requirements into the second half of 2018.

About Duvelisib

Duvelisib is a first-in-class investigational, dual inhibitor of
phosphoinositide 3-kinase (PI3K)-delta and PI3K-gamma, two enzymes known
to help support the growth and survival of malignant B-cells and
T-cells. PI3K signaling may lead to the proliferation of malignant B-
and T-cells and is thought to play a role in the formation and
maintenance of the supportive tumor microenvironment.1,2,3
Duvelisib was evaluated in late- and mid-stage extension trials,
including DUO™, a randomized, Phase 3 monotherapy study in patients with
relapsed or refractory chronic lymphocytic leukemia/small lymphocytic
lymphoma (CLL/SLL),4 and DYNAMO™, a single-arm, Phase 2
monotherapy study in patients with refractory indolent non-Hodgkin
lymphoma (iNHL).5 Both DUO and DYNAMO achieved their primary
endpoints and Verastem has submitted a new drug application (NDA)
requesting the full approval of duvelisib for the treatment of patients
with relapsed or refractory CLL/SLL, and accelerated approval for the
treatment of patients with relapsed or refractory follicular lymphoma
(FL). Duvelisib is also being developed by Verastem for the treatment of
peripheral T-cell lymphoma (PTCL), and is being investigated in
combination with other agents through investigator-sponsored studies.6
Information about duvelisib clinical trials can be found on www.clinicaltrials.gov.

About Defactinib

Defactinib is an investigational inhibitor of focal adhesion kinase
(FAK), a non-receptor tyrosine kinase that mediates oncogenic signaling
in response to cellular adhesion and growth factors.7 Based
on the multi-faceted roles of FAK, defactinib is used to treat cancer
through modulation of the tumor microenvironment and enhancement of
anti-tumor immunity.8,9 Defactinib is currently being
evaluated in three separate clinical collaborations in combination with
immunotherapeutic agents for the treatment of several different cancer
types including pancreatic cancer, ovarian cancer, non-small cell lung
cancer (NSCLC), and mesothelioma. These studies are combination clinical
trials with pembrolizumab and avelumab from Merck & Co. and Pfizer/Merck
KGaA, respectively.10,11,12 Information about these and
additional clinical trials evaluating the safety and efficacy of
defactinib can be found on www.clinicaltrials.gov.

About Verastem, Inc.

Verastem, Inc. (NASDAQ:VSTM) is a biopharmaceutical company focused on
developing and commercializing drugs to improve the survival and quality
of life of cancer patients. Verastem is currently developing duvelisib,
a dual inhibitor of PI3K-delta and PI3K-gamma, which has successfully
met its primary endpoint in a Phase 2 study in indolent Non-Hodgkin
Lymphoma (iNHL) and a Phase 3 clinical trial in patients with chronic
lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL). Verastem has
submitted a New Drug Application (NDA) requesting the full approval of
duvelisib for the treatment of patients with relapsed or refractory
CLL/SLL, and accelerated approval for the treatment of patients with
relapsed or refractory follicular lymphoma (FL). In addition, Verastem
is developing the FAK inhibitor defactinib, which is currently being
evaluated in three separate clinical collaborations in combination with
immunotherapeutic agents for the treatment of several different cancer
types, including pancreatic cancer, ovarian cancer, non-small-cell lung
cancer (NSCLC), and mesothelioma. Verastem’s product candidates seek to
treat cancer by modulating the local tumor microenvironment and
enhancing anti-tumor immunity. For more information, please visit www.verastem.com.

Verastem, Inc. forward-looking statements notice:

This press release includes forward-looking statements about Verastem’s
strategy, future plans and prospects, including statements regarding the
development and activity of Verastem’s investigational product
candidates, including duvelisib and defactinib, and Verastem’s PI3K and
FAK programs generally, the structure of our planned and pending
clinical trials, Verastem’s financial guidance and the timeline and
indications for clinical development and regulatory submissions. The
words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,”
“plan,” “predict,” “project,” “target,” “potential,” “will,” “would,”
“could,” “should,” “continue,” and similar expressions are intended to
identify forward-looking statements, although not all forward-looking
statements contain these identifying words. Each forward-looking
statement is subject to risks and uncertainties that could cause actual
results to differ materially from those expressed or implied in such
statement. Applicable risks and uncertainties include the risks that
acceptance or approval of the NDA will not occur on the expected
timeframes or at all; that even if data from clinical trials is
positive, regulatory authorities may require additional studies for
approval and the product may not prove to be safe and effective; that
the preclinical testing of Verastem’s product candidates and preliminary
or interim data from clinical trials may not be predictive of the
results or success of ongoing or later clinical trials; that the full
data from the DUO study will not be consistent with the previously
presented results of the study; that data may not be available when
expected, including for the Phase 3 DUO™ study; that the degree of
market acceptance of product candidates, if approved, may be lower than
expected; that the timing, scope and rate of reimbursement for our
product candidates is uncertain; that there may be competitive
developments affecting our product candidates; that data may not be
available when expected; that enrollment of clinical trials may take
longer than expected; that our product candidates will cause unexpected
safety events or result in an unmanageable safety profile as compared to
their level of efficacy; that duvelisib will be ineffective at treating
patients with lymphoid malignancies; that Verastem will be unable to
successfully initiate or complete the clinical development of its
product candidates; that the development of Verastem’s product
candidates will take longer or cost more than planned; that Verastem may
not have sufficient cash to fund its contemplated operations; that
Verastem or Infinity Pharmaceuticals, Inc. (Infinity) will fail to fully
perform under the duvelisib license agreement; that Verastem may be
unable to make additional draws under its debt facility or obtain
adequate financing in the future through product licensing,
co-promotional arrangements, public or private equity, debt financing or
otherwise; that Verastem will not pursue or submit regulatory filings
for its product candidates, including for duvelisib in patients with
CLL/SLL or iNHL; and that Verastem’s product candidates will not receive
regulatory approval, become commercially successful products, or result
in new treatment options being offered to patients. Other risks and
uncertainties include those identified under the heading “Risk Factors”
in Verastem’s Annual Report on Form 10-K for the year ended December 31,
2017 and in any subsequent filings with the U.S. Securities and Exchange
Commission. The forward-looking statements contained in this press
release reflect Verastem’s views as of the date of this release, and
Verastem does not undertake and specifically disclaims any obligation to
update any forward-looking statements.

References

1 Winkler et al. PI3K-delta and PI3K-gamma inhibition by
IPI-145 abrogates immune responses and suppresses activity in autoimmune
and inflammatory disease models. Chem Biol 2013; 20:1-11.
2
Reif et al. Cutting Edge: Differential roles for phosphoinositide 3
kinases, p110-gamma and p110-delta, in lymphocyte chemotaxis and homing.
J Immunol 2004:173:2236-2240.
3 Schmid et al. Receptor
tyrosine kinases and TLR/IL1Rs unexpectedly activate myeloid cell PI3K,
a single convergent point promoting tumor inflammation and progression.
Cancer Cell 2011;19:715-727.
4www.clinicaltrials.gov,
NCT02004522
5www.clinicaltrials.gov,
NCT01882803
6www.clinicaltrials.gov,
NCT02783625, NCT02158091
7 Schaller M.D. and Parsons
J.T. Focal adhesion kinase: an integrin-linked protein tyrosine kinase.
Trends Cell Biol. 1993 3: 258-62.
8 Jiang H et al.
Targeting focal adhesion kinase renders pancreatic cancers responsive to
checkpoint immunotherapy. Nat Med 2016: Aug 22(8) 851-60.
9
Sulzmaier F.J. et al. FAK in cancer: mechanistic findings and clinical
applications. Nature Rev Cancer. 2014 14: 598-610.
10www.clinicaltrials.gov,
NCT02546531
11www.clinicaltrials.gov,
NCT02943317
12www.clinicaltrials.gov,
NCT02758587

       
 

Verastem, Inc.

Selected Consolidated Balance Sheets

(in thousands)

 
December 31, December 31,
2017 2016
 
Cash, cash equivalents and investments $ 86,672 $ 80,897
Prepaid expenses and other current assets 1,115 398
Property and equipment, net 861 1,417
Other assets   1,143   917
Total assets $ 89,791 $ 83,629
 
Accounts payable and accrued expenses $ 17,128 $ 10,991
Long-term debt 14,828
Other liabilities 151 341
Stockholders’ equity   57,684   72,297
Total liabilities and stockholders’ equity $ 89,791 $ 83,629
 
 
         

Verastem, Inc.

Consolidated Statements of Operations

(in thousands, except per share amounts)

 
 
Year ended December 31,
2017   2016  
Operating expenses:
Research and development $ 46,423 $ 19,779
General and administrative   21,381     17,223  
Total operating expenses   67,804     37,002  
Loss from operations (67,804 ) (37,002 )
Interest income 561 562
Interest expense   (559 )    
Net loss $ (67,802 ) $ (36,440 )
Net loss per share—basic and diluted $ (1.76 ) $ (0.99 )

Weighted-average number of common shares used in net loss per
share-

basic and diluted

  38,422     36,988  
 
 

Contacts

Verastem, Inc.
Marianne M. Lambertson
Vice President,
Corporate Communications
Investor Relations/Public Relations
+1
781-292-4273
mlambertson@verastem.com