Okay, great. Greetings, everyone, and welcome to the HC Wainwright Global Investment Conference. My name is Sean Lee, and I'm an Equity Research Analyst at the bank. To this next fireside chat, I would like to welcome Mr. Dan Paterson, who is the CEO of Verastem Oncology, and Dr. John Pachter, who is the CSO. Verastem Oncology is a biotech company developing a range of novel therapies against cancer. Earlier this year, the company's lead combination of avutometinib plus defactinib received accelerated FDA approval for the treatment of low-grade serous ovarian cancer. In today's conversation, I hope we can learn more about the progress the company has made so far and the business strategy going forward. Without further ado, welcome, Dan. Can you maybe start us off for the benefit of investors who may not be familiar with the name? Could you give a brief intro on Verastem Oncology?
Sure, sure. We're developing small molecules that target the RAS pathway. We really have two major foci right now for this year. One is the successful launch of our first product, and it was actually two products that were simultaneously approved. It was a novel approval. We had priority review and still got approval about two months before the PDUFA date, which, with all the turmoil going down in Washington, you know, I was a little nervous during that period, but things went well and we had great interactions with the agency. Our first indication is a subset of ovarian cancer called low-grade serous ovarian cancer. There's about 6,000 to 8,000 women in the United States suffering from this disease. It tends to strike younger women. It tends to be chemo resistant. Standard of care is anywhere from 6% to 15% response rate.
We had a 44% response rate in our pivotal study. We launched it in mid-May. Being two months early, you know, we had the bare minimum in place, but did not have everything in place, did not have our peer-reviewed publications out. All of that has been done. Having said that, in our first six weeks of launch, we did a little over $2 million net, which exceeded consensus quite substantially. Right now, we're in our first full quarter with everything in place and, you know, expecting to be able to report favorable results at the end of this quarter. The other exciting part of the story, and it's interesting, we've got what I would call three groups of investors, one who care about the launch product. We have a group of investors who care about our newer program, which John will talk a little about.
We have what we think is a best-in-class G12D inhibitor. Unlike the LGSOC market, where we've spent the last four years educating folks on the size of the market, there's no question about the opportunity for the G12D inhibitor, where the lead indications will be pancreatic cancer and non-small cell lung cancer. We've had some pretty compelling data from our partner in China. Just over the weekend, they reported some updated lung data and then had some very interesting pancreatic data at ASCO, and I'll let John talk about that. Between those two programs, we think this will be a transformative year for us.
Great. Let's focus on the commercial side of things to start.
Sure.
As you mentioned, it's been about four months since the combo was approved. The company hasn't released any specific financial guidance, and I know it's still early, but what can you tell us about the progress so far? Do you have some learnings from the launch that you can share, and do you have specific goals in mind that you hope to achieve by the end of this year?
Yeah, the biggest learning is all the work we've been doing over the last couple of years. We've had our medical science liaisons in the field for the last two years. They worked very closely with both the investigators on the trial and general key opinion leaders. There's been great receptivity. It's one thing when we talk about what we think about the drug. I think we hear pretty universally from analysts and others when they reach out to the physicians who are actually treating the patients, they're very excited to have a new drug. We've worked very closely with the community, both the healthcare providers and the patients, to really help raise awareness around the disease. As I said, there's just a lot of excitement to have something new out there.
The momentum from that first partial quarter has carried over into the second quarter, and we're just very pleased to see the progress that we've made.
Great. Okay, then looking beyond the U.S. market to the major international markets such as Europe, Japan, and Canada, what are the company's plans there?
No specific plans for Canada. I have to say the whole most favored nation thing is giving us a little pause and hoping that plays out before we have to do anything specific when it comes to pricing. We have started talking with the regulators in Europe, and the big question there will be whether we can get approval on the single-arm study where we get accelerated FDA approval or whether we'll need our confirmatory study. I personally believe even if we're able to get approval on the single-arm study, reimbursement will really come in when we have the randomized study. We're having those discussions and that's moving forward. In Japan, slightly different story. We believe we can get approval on a small bridging study.
The bridging study is almost fully accrued, and we intend to go to the PMDA and talk about conditional approval with that study and are already starting to transfer some of those sites over to get enough Japanese patients onto our confirmatory study. That's probably more clarity, and that'd probably be a 2027 event, but we do continue to work on Europe. We are having some discussions in China and haven't really done anything in Canada right now, just looking for a lot of things to play out to understand kind of what the impact on us would be.
Understood. Now, as a good bridge onto the clinical side, as you mentioned, because this is an accelerated FDA approval, the company is also running a confirmatory Phase 3 trial in ovarian cancer. What can you tell us about this study? Especially, I know you guys have an upcoming pre-planned interim analysis.
Yeah, so it has accrued quite well. I mean, we had a lot of discussions with the agency. We were a little concerned that we wouldn't be able to accrue the study. It's a relatively rare disease. There have been Phase 3s done before. The standard of care does not perform particularly well. We were able to build into the study a crossover, so if you go on standard of care and you have a documented progression based on central scan review, you can cross over to the experimental arm. It has accrued quite well. We're just about fully accrued. There was a pre-planned interim analysis built in. The reason for that was if you looked at the standard of care, they each had less prior lines of therapy, and there had never been a study done that prospectively broke out KRAS wild type and KRAS mutant.
The prognosis of those two subgroups is actually quite different. Patients with a KRAS mutant disease, and this is different than a lot of other cancers, actually have a better prognosis, and they live on average 12 years, where patients with KRAS wild type disease live on average seven years. Given a little bit of uncertainty around the comparator, we did our best with the sample size and estimating what we thought it would be. For kind of belt and suspenders, we built in a pre-planned interim analysis where a blinded data monitoring committee will get to look at the data. We won't see it, and they can tell us whether we proceed as planned or whether we should do a modest sample size increase. That allows us to do that, and that'll happen later this year.
Looking forward to that one. Beyond the LGSOC, the company is also testing the avutometinib plus defactinib combo in a variety of other tumor indications, including lung cancer and pancreatic cancer. Are there any upcoming milestones in these studies that investors should pay attention to?
Yeah, no, good point. The lung cancer one, this is in G12C non-small cell lung cancer, and it's a partnership with Amgen where we're studying sotorasib together with both avutometinib and defactinib. We did a doublet of just avutometinib plus sotorasib. We'll have data on that later this year. We have shown that we can safely add in defactinib. John's group has developed some really compelling preclinical data on the triplet, and we're really looking forward to early data on that later this year as well. What we're really excited about is our frontline metastatic pancreatic cancer data. We're combining with standard of care gemabraxane. At ASCO a year ago, we had our initial report on that where we had about an 83% response rate. That was a small number of patients. At the ASCO that just happened, we had double that number of patients, so 12 patients.
We maintained the 83% response rate, which is just unprecedented. We're now in an expansion phase that we are almost fully accrued on that we'll use both to talk with the agency about potential breakthrough therapy designation, but also to have an end of phase two meeting to talk about what the path forward would be. Standard of care in this setting is 30% to 35% response rate with a five and a half month PFS. We're seeing an 83% response rate, and almost all patients are getting past that five and a half month benchmark and still being on the study, so very exciting.
Yeah, a lot to look forward to.
Yeah, we have our earlier program, which is just exceeding everything we would have expected. We had some data over the weekend that we're happy to talk about.
Yeah, I'm just going to move into that right off. The VS-7375 is the next product in line in your clinical pipeline.
Yeah.
You guys have presented yourself, your partner had pretty good data just over this weekend.
Yeah, so we developed it with our partner, GenFleet Therapeutics, in Shanghai. They've, as of World Lung yesterday when they presented, they said they had 142 patients on, so they're moving extremely fast. I'll highlight that it's a dual on-off inhibitor of KRAS G12D, unlike Revolution Medicines, which is on only and some of the others that are off only. I think that mechanism seems to be giving us in preclinical models much better efficacy than we see with maximal concentrations of the Revolution Medicines drugs. We think that on-off profile is important. Turning to the clinical data, at ASCO, GenFleet Therapeutics showed with 23 efficacy evaluable patients a 52% response rate in pancreatic cancer. Reminding you that the Revolution Medicines drugs, which we see as a benchmark, are 30% to 35% response rate in that same setting.
In World Lung yesterday, GenFleet Therapeutics presented that at the recommended Phase 2 dose that they've selected of 600 milligrams once daily, they're seeing a 69% response rate, which again is astoundingly good, much better than what's been seen with G12C inhibitors, compares really favorably relative to Revolution Medicines' drugs. We think the dual on-off mechanism is probably explaining these really high response rates. It's a really exciting time.
People are putting a lot of effort into trying to do direct comparisons across our data versus Revolution Medicines. The most important part of the data is clearly it's an active drug. Clearly, the response rates are in a range where one would expect to see if you're hitting a target that's a driver mutation. A lot of the criticism of the early G12C data, when you're talking 25% to 30% response rates, is are you really hitting a driver mutation hard? The other importance of that Chinese data is we did include it in our IND, and we were able to do a very truncated dose escalation that probably cut nine months off our timeline. We started at 400 milligrams, which is an active dose, and we're doing a very quick escalation, and then we'll be getting into expansions and combination regimens later this year.
I was going to ask that. With Phase 1 that you guys are running in the U.S., what kind of data can we expect later this year, and what do you think the next steps will be for the program?
What we've said is we'll have initial efficacy data first half of next year. It takes a couple of cycles for patients to respond, and we've seen that both with the GenFleet Therapeutics data and with the Revolution Medicines data. You see stable disease early on, and then when the data gets a little mature, you see a real response rate, and we want to make sure we do that. Having said that, the one liability that folks saw in the Chinese data from GenFleet Therapeutics was there was more GI toxicity than we would have liked, and they did not allow prophylactic antiemetics in their phase one. We're allowing that, and we want to get safety data out later this year to really dispel that and show that we're able to overcome that liability.
In the Chinese study, the patients were also fasted, and it's been shown with adagrasib in particular and sotorasib, which have similar backbones, that patients who are fed do much better from a GI tox perspective. We're doing both of those things in our trial. We want to show the safety later this year and the efficacy first half of next year.
We're excited about combinations. Once we clear even the first two cohorts as a single agent in the dose escalation, because again, it's pretty abbreviated based on the Chinese data, we can get to combinations this year, and that'll include cetuximab combination, which we would take into colorectal. It'll include chemo IO combination that we would take into frontline lung cancer, and it'll include gem-nat-paclitaxel or gemabraxane combination that we can take into frontline pancreatic. It's moving very quickly in the U.S., and we'll also add some ex-U.S. sites, which we're working on doing now.
Have you settled on those three as your primary expansion indications for VS-7375 or?
In addition to those, we're doing single agent KRAS G12D inhibitor in second line plus lung and second line plus pancreatic, and we also have a basket. I think that it'll be data-driven as to what we prioritize, but we're moving quickly to get those initial signals.
Certainly, a lot to look forward to in the next 6 to 12 months.
Putting a couple of good quarters of sales behind us, you know, we think it could be a really important year for us.
Certainly. Yeah, just on the financial side of things, what's the company's cash position looking like and what do you expect to be cash runway? Do you have sufficient funding to run all these programs that you're looking to?
Yeah, so what we reported at our last quarter close is a little over $160 million in cash. We also did a fundraising a year or so ago that had cash-only warrants, so warrants that are well in the money. They had a strike price of $3.50, and they expire in January, so we'd fully expect those to come in. Those would bring in another $50 million or so. That's enough to get us well into the second half of 2026. We think the base business or the LGSOC business could be self-funding by that point, and any future raise would be to support the G12D program. As you've heard, there's a lot of potential opportunity there. As we think of funding that program, priority one would be to fund it with sales. That's the most effective way, no dilution, and we just sell drug and fund it.
Next behind that is potential partnerships. We've had a lot of inbound interest in the G12D. It's a very hot area, and I think as you look at really the dearth of clinical data that's come out, and one would expect a lot more by now based on the number of agents that are listed in clinTrials.gov. We think others may be struggling, and we do look at Revolution Medicines as really being in the lead. It's up to us to catch up. We do believe we've got a very efficacious molecule, and it's up to us to prove that. There is the potential for future equity raises. We'd like to not do it at the price we're at now, and that's why it's not our number one choice. Right now, it'd be our number three.
We do have a line of credit that still has a couple of tranches left on it. We've chosen not to take them down yet. We think we want to see how the data plays out. We want to see how the stock price plays out. We want to see how sales play out. Importantly, the macro environment has just been very unpredictable. The good news is it looks like interest rates are going to come down. The XBI has gone up a little bit. If no more crazy things come down from Washington, we think maybe the macro environment will allow us to kind of run our business.
Certainly. Fingers crossed on that.
Fingers crossed.
To close it out in the last couple of minutes, is there anything you feel that the street isn't getting about Verastem? Are there any key points that you feel deserve a deeper look?
I think there's a couple of things. One, I think the LGSOC opportunity really is much more significant than people appreciate. You know, it's a disease with high unmet need. We have a, you know, relatively good pricing. We're getting really good reimbursement. The long length of therapy makes us a lot different than a lot of cancer indications. In our clinical trial, a labeled indication, patients were on on average 18 months. That allows us to build a bit of an annuity that's very different from other cancer indications you cycle it through. Although there is initial interest in the G12D inhibitor, I think we've got to put some data in the U.S. up and show consistency. We need to show that the efficacy is as good, the tolerability is better, and then I think they'll really appreciate the value of that asset.
Great. Thank you, Dan, for this information chat, and I hope you have a great rest of the conference.
Great, thanks.
Thanks.