2025 RBC Global Healthcare Conference. My name is Greg Renza, one of the biotech analysts, and we're pleased to have Verastem with us today. Really an important and very interesting point, inflection point for the company in a busy year. I look forward to our discussion today with the President and CEO, Dan Paterson. Firstly, Dan, congratulations on the recent approval. A lot of opportunity here with Verastem and your launch. Maybe just taking a step back for those who are learning the Verastem story or coming back into it, maybe just give us an overview of the company, the recent approval in low-grade serous ovarian cancer, and just a layout of what is an emerging and interesting pipeline.
Sure, sure. We're developing small molecules that target the Ras pathway. A lead program is actually two drugs together, avutometinib and defactinib are the generic names. Now that we're approved, we have AVMAPKI FAKZYNJA CO-PACK. Still getting used to rolls off the tongue. We were very excited to get the approval two months early. While we were going through the process, and we have breakthrough therapy designation, it's a relatively rare subset of ovarian cancer with high unmet need. We're having almost daily conversations with the agency, and it was clear from all of the discussions and all the correspondence that this was going to move in an expedited manner. While that was going on, we were getting inbound calls almost daily from investors saying, "Is anyone working at the FDA? Will they still give accelerated approval?
Are they still approving drugs? We could give guidance that everything was on track. It really was not appropriate to say we are going to get earlier approval. Until it happens, you never know, because they never say you are going to get approval early. What they do is they say, "This milestone is supposed to happen here." When it happened two months early, it was a pretty good signal. We knew enough that we could accelerate our launch plans. We moved up the hiring of the sales force, all the contracting for specialty distributors, specialty pharma, the 3PL hub, all that stuff got moved up. We were pleased to get the actual letter again two months early. We hit the ground running there. More broadly, that is our lead program. More broadly, we are studying the same combination together with standard chemotherapy in frontline metastatic PDAC.
We had a cancer. We will have an update on that data at ASCO. We last reported on that at ASCO a year ago. A small cohort of six patients, where we had an 83% confirmed response rate, which is just phenomenal in pancreatic cancer. It is one of those cancers where drugs have gone to die, basically. To have an initial result like that, and now looking forward to presenting a larger data set, 60 patients at ASCO. Also at ASCO, our earlier program, which is a G12D inhibitor that we licensed from a company in China called GenFleet. It is part of a larger collaboration that covered three targets in the Ras pathway. We have presented preclinical data at AACR, really showing that it is likely the best in class molecule based on preclinical data.
We have done some direct head-to-head comparisons with avutometinib, which is clearly the leader in this space, and we have been able to compete there. Setting up a nice data point, we think, will be a big ask for us.
Yeah, I know that we're looking forward to diving into that. When we think about AVMAPKI FAKZYNJA approval, you've certainly pointed to the early approval. As you've had time to reflect on this, why do you think that is? What does this say about the unmet need of the space? Maybe use this as a chance to talk about low-grade serous ovarian cancer.
Sure. So you're assuming we've had time to reflect on this. It's been quite a whirlwind, if you will. Low-grade serous ovarian cancer, it's about 10% of ovarian cancer. You're probably much more familiar with so-called high-grade. It's typically treated with platinum. We talk about platinum-sensitive versus platinum-resistant. More recently, the PARPs. Those tend to be cancers that can be pretty aggressive. They also tend to have a unique pattern of genetic mutations. They tend to have BRCA or other mutations related to DNA damage repair. I would say low-grade is kind of the opposite. It's a very different array of mutations. It does not have BRCA mutations. It instead has disturbances in the MAPK pathway. About 70% of patients have some kind of mutation in the MAPK pathway. We'll react to different drugs.
I think the hallmark of low-grade serous ovarian cancer is its resistance to chemotherapy. If you think of traditional chemotherapy, the kinds of tumors that respond tend to grow fast. When you go back before targeted therapy, it literally was, "If I can get a cell that divides more quickly than normal cells, I can kill it before I kill the normal cells." The reason why your hair falls out, you get nausea and vomiting. Nutritional chemotherapy is hair cells and gut cells tend to replicate pretty quickly, and so they're more susceptible. This is very different. It's slow-growing response to standard care. Chemotherapy and hormonal therapy is in the 6%-13% range. Unfortunately, these women have lots of symptoms. It's unfortunate you get a tumor in your gut that interferes with stuff. They are almost constantly under therapy for the life of the disease.
They tend to live a long time. They tend to live on average 10 years. It is just cycling through one thing versus another. Unfortunately, most of the treatments have a high side effect burden. Kind of your classic definition of high unmet need. There was previously nothing approved by the FDA specifically for this drug. What they tended to get was the cast-offs from high-grade ovarian cancer. Traditionally, these patients were lumped into those clinical trials. More recently, those patients were excluded from those clinical trials, but there was nothing specific for them. We have interacted with both the HCPs and the patient groups quite a bit over the last number of years. They have really loved the idea that somebody cares about this disease. We have focused on it. We have developed those relationships. Now we are very excited that the drug is approved and available.
Yeah. I certainly want to get into some of the details and the strategy of the launch. Maybe just one more question on the approval. As you were developing this combination and even filing with the FDA, one of the pieces that maybe goes underappreciated is this is an approval of two novel agents. Maybe just talk through the gravity of that, what that means. While we're doing that, Dan, maybe talk about that contribution that avutometinib and defactinib are sort of making to the profile here.
Sure. The FDA has specific guidance for so-called novel drugs. It is specifically for drugs that did not have prior approval for the indication for which it is being studied. As far as we know, and our regulatory people took a very hard look, I believe it is the first time two drugs have gotten an approval together that it is the first time they have ever been approved for anything. Especially in today's environment, what is going on, that was a risk. The agency moved quickly. I have to say, when I hear from my team, the people they were interacting with are just superstars. They know what they are doing, whether it is the CMC people, the ClinPharm people, or the clinical people. These people really know what they are doing. They put us through our paces, but they clearly understood what we had. They were moving quickly.
It just gave us a lot of faith in where the agency is today. I can't speak to where it's going and the long-term impact of some of the attrition they've had, which is quite worrying, actually. Going through the process, it was clear that they were digging in. They were on top of it. Everything happened as it should.
Great, great. With your experience and background, you and the team are sort of designed for this next step with the launch. You have mentioned the ability to pull forward, just given an early approval. Let's just talk about the value that you can capture during the approval day. You disclosed and shared the pricing. Now, as you talk about the epidemiology, maybe tie it a little bit to that market opportunity and just that rationale for how you are pricing this CO-PACK for value.
Sure. One of the first things we do is look at recent analogs. One of the unintended consequences of the IRA, I believe, has been over the last year or so, you've seen the initial price of oncology drugs for smaller indications go up quite a bit. I think it's just a reaction to companies knowing that once you're on the market, raising prices is harder. Really trying to do that. When we looked at the unmet need, the impact of the drug, I mean, we have an overall response rate of 44%. It's very durable. Patients stay on for a long time. The side effect profile relative to other things they can take is favorable. That kind of set up kind of what the need is and really having a price based on that need and the fact that it's two drugs.
There were two full CMC packages, ClinPharm packages. I mean, it was quite expensive to develop. It is a relatively small population. Having said that, typically when you size an oncology market, you look at the incidence of the disease. U nfortunately, in a lot of cancers, patients are not around to get treatments for a long time. In lung cancer, they may get frontline. They may get secondline. It happens pretty quickly. As I mentioned earlier, these patients cycle through therapies for 10 years. What we did is we looked at the so-called prevalent population. How many people are out there that have been through the frontline of therapy? The frontline failed them, and they need something else. That is about 6,000 patients -8,000 patients in the United States.
You look at the fact that based on the data out of our study, based on the label, patients are on therapy for on average 18 months. That is a long duration of therapy in an indication where the prevalent population is decent size. We believe the total addressable market in both the labeled indication and then in the KRAS wild-type, where we believe it will get used based on the data, is probably about $3 billion. That is not saying our peak sales are going to be $3 billion. You will never pick everybody up. We have not given guidance, but if you look at the consensus from the different analysts, they range from $300 million-$800 million peak sales. It is a real opportunity. In one way, it is the tip of the sword. It is our first indication for this drug combination.
We do have larger indications coming down the pike, but it in and of itself is quite a sizable market. When you step back and look at this market, about half the patients are treated at only about 100 sites in the country. Half of them are very concentrated. If you think of the tools you have to deploy when you're launching a drug, salespeople's one tool. Increasingly, it's only one tool. It's a complex market. There are other things you need to do. That 100 sites will be the focus of the sales force. We also have medical science liaisons, or MSLs, that are more science-oriented. They're not salespeople. They can't be compensated to sell drug, and that's not their job. Their job is scientific exchange.
If you think of the nature of some of the places we'll go into, whether they're large institutions that have P&T committees and lots of people who decide what's used, or the other half of the market, which is the community, which is largely made up of very large practices that are affiliated with the group purchasing organizations, they tend to be science-based in that they implement guidelines. They go so far as electronic medical records where the guidelines get embedded. When you put a disease in, it comes up and says, "This is preferred." The way you educate physicians in those organizations is not one-on-one detailing the sales rep. They have in-services and meetings where they educate their doctors on new things.
Because we contract with them, they invite us in, and we will have our medical science liaisons come in and have teach-ins on the drugs. That is how we educate them. In a disease like this, that is almost as much like a rare disease as a traditional cancer, the patients are obviously critical. We started an education campaign well over two years ago. One component of that campaign was an unbranded website that educated on both low-grade serous ovarian cancer and the unmet need. We allowed patients to sign up. We have contacts for over 2,500 patients that we have permission to directly communicate with appropriately.
Yeah [crosstalk]. So you've been building a registry system [crosstalk].
We have been building that up, building up really the relationships with the healthcare providers. They know who we are. We have educated quite a bit on the disease state, but they also know about the drug because there have been scientific presentations along the way. We are going to ASCO in a few weeks, but there are much more targeted groups, SGO, IGCS, that are very focused on gynecologic oncology. That is a much more targeted audience for us. Those specialists tend to be a resource in the community to educate their peers, medical oncologists, that may not see as many of these patients. We have made a lot of inroads there and spent a lot of time educating them. I think developed a fair amount of goodwill because they recognize that there are rarer subsets of these cancers that have been ignored for years.
They like the fact that someone's focused on it, put the resources in. I think that's really helped the relationship. We've partnered a lot, both with the patient groups and the physician groups. We did the first-ever survey of the needs of low-grade serous ovarian cancer patients. We've worked very hard to get low-grade serous ovarian cancer designated in the orphan disease. About 10 years ago, it was recognized by the World Health Organization as a separate disease. It took a fair amount of education and effort to get that through to the FDA. To their credit, when we presented the objective information, they agreed and gave us the orphan drug designation and treated it as a different disease. It really was an evolution in thinking.
Yeah. That's very helpful to hear about the pre-launch and how it's dovetailing into this execution that you're ready to go. I think investors want to know and ask you about how you look at comps of what a launch trajectory, what a tracing would look like. I think the other piece of importance for investors is certainly the prospect of the NCCN guideline listing. Maybe those two are interrelated. Maybe walk us through the guidelines, that designation for listing regardless of KRAS status and how that can shape a trajectory and also what gives you confidence that the listing is potential.
Sure. The National Comprehensive Cancer Network, or NCCN, really started about 30 years ago. It's all the comprehensive cancer centers that decided to get together and actually was involved early, early on in some of the first meetings where the initial reaction of physicians was, "We don't do cookbook medicine. We don't do that." They were reminded by their peers, "Every time we use a protocol, we'll do a clinical trial.
We're doing a similar thing. I think they were very thoughtful in thinking of the future around the role payers would play and said, "We really need an authority, not an insurance company, not some private company that could objectively say, 'This is how we should treat each disease.'" Over the years, the NCCN guidelines have really become the gold standard and are what's used by insurance companies in the U.S. to decide what they pay for. In many ways, it's more important than the label because about a third of all oncology drug usage is off-label. Physicians can write for whatever they want. We saw that during the COVID crisis. They can write for whatever they want. Insurance companies decide what's reasonable to pay for. They have adopted the NCCN guidelines as really that gold standard. They have a process.
They have committees for each major cancer, and they tend to meet a certain number of times a year, but they will hold an ad hoc meeting when a new drug is approved. We put together our dossier, and we submitted it the day we got approval. They acknowledged they received it. Presumably, they are in the process of trying to get people together for a Zoom meeting where they can have it. We believe very strongly that when you look at the other treatment options for these patients, clearly we have got the label for mutant. Interestingly, in low-grade serous ovarian cancer, it is kind of the opposite of a number of other cancers. Patients with a KRAS mutation do better. Patients with wild-type, whether the cancer is driven by something else or whatever, they have a poorer prognosis. It is not just reaction to an individual drug.
If you look at patients with LGSOC, I mentioned earlier, they live on average 10 years. The KRAS mutant lived for about 12 years on average. The KRAS wild-type at 7 years. They just do poorly, unfortunately, or the drugs do poorly by them. It is really the more appropriate way to say it. When we look at how the patients did in our study, yes, the response rate, and that is what you use as a primary endpoint for accelerated approval, which we got, was lower. We had 40%+ mutant, and it was 17% in the wild-type. If you peel it down a level, again, these patients do not have many treatment options. What we call clinical benefit rate, so that is CR PR plus Stable isease for at least six months. The number for that is much closer between wild-type and mutant.
It's not an endpoint that the FDA typically looks at in a single-arm study. It's clearly not when they look at an accelerated approval, but when physicians are evaluating what to use. In this disease in particular, we've heard from time and time again from the physicians, the arbitrary shrinkage of 30% really doesn't mean anything to my patient. The tumor shrinking and staying shrunk, I think that's probably the right way to say it, is meaningful to the patient because when the tumor grows, there's not a lot of empty space in the belly. Getting that tumor to shrink and stay where it is is of benefit to patients. That wasn't a formal endpoint in our single-arm study we used for accelerated approval. We're measuring that. Affirmatory study. The feeling of the physicians is when you're shrinking the tumor, keeping it shrunken, you're doing something.
Okay. That's really helpful. The submission was made. They have approval. It's been acknowledged. Yeah, an assumption of an ad hoc meeting. Do you have a base case for a category listing based on RAMP 201 and the FRAME data?
Good question. NCCN uses categories of that. The highest level is category one, which typically needs a randomized phase III study. We have not done that yet. If you look at things that are listed on the guidelines now, they tend to have what's called 2A. 2A and 2B are what you're shooting for. Most payers, I think, will pay at 2B. 2A is what we're hoping for. Almost all payers will pay at 2A. Again, once we have our confirmatory study, we'll go back and presume we get level one. 2A should be good enough for reimbursement. The upside case would be if we get 2A with some kind of preference and they say, "This is sometimes they'll," and if you've ever looked at the NCCN, it's really complicated.
In the case of LGSOC, it lists a bunch of stuff, and it says, "The preference is do a clinical trial first." It typically means they don't think a lot of what's on there. They're hoping for better for the patients. Our upside case would be 2A preferred, but we'll take what we can get. Interestingly, the FDA has changed guidance recently on sharing evidence. You can never promote all play. That's the hallmark of the FDA for those who are history nerds. The FDA started with taking drugs that were basically antifreeze off the market so that people didn't die. They started from the basis of safety. That's always been the basis. Then they went to efficacy, and you can't make claims that aren't related.
Our salespeople can't go out and say, "Hey, this is great for wild-type." The new guidance in Safe Harbor is you can share peer-reviewed publications. It can't be part of your promotion. It has to be done separately, but you can share information about what the state of the science is. There is a way to get that information out.
That's great. Over this year and with the launch, what are some of the metrics that you're looking at? What do you think is a barometer for early performance success? What do you plan to share with the street as far as tracking the launch?
Typically, activity precedes outcome. The first thing we'll look at is, are we getting out to see the patients? Are we delivering the message? We did a lot of baseline market research. We know awareness. We tend to treat those types of things. We measure how that changes over time. Obviously, we'll measure prescriptions. That's the ultimate when prescriptions get paid for and don't have to discount. It's kind of the ultimate. We'll look at things that will be useful for us to reallocate the things we're doing. When a prescription comes in, how long until it's reimbursed? What percentage of them get reimbursed? If a physician uses the drug, will they use it again? Are we penetrating in the community as well as in academic centers? Those are the things we'll look at.
We'll start reporting things that I think we can reliably and accurately measure because I don't think it helps the street if it's data that's garbage in, garbage out. We want things that we can feel comfortable we can repeatedly measure that will give everyone directionality on where we go. We know the first few quarters, everyone's going to be trying to calibrate IQVIA data to actual sales because for those who don't know, IQVIA used to be IMSA. They're the leader in basically selling data. It's prescription data, medical claims data. There's no way you can capture 100% of the universe because some institutions hold their data back to sell themselves and stuff. There's always, for the first few quarters, this calibration of, "I'm getting weekly IQVIA data. How's it going to relate to sales?" People are going to want to get comfortable with that.
At a certain point, it becomes a leading indicator of what we report. It is really hard in the first year.
That's [terrible]. Dan, we cover a lot, and we didn't even get to ASCO, but we'll have to wait for next week. Congrats on the approval and all the progress, and I look forward to seeing you then as well.
Thanks. I'd encourage people to tune in to [ASCO].
Thanks, everyone, for joining us [crosstalk].
Thanks.