Verastem Cancer Therapy Should Get Traction, Raise Stock Price

Mar. 23, 2019 7:49 AM ETVerastem, Inc. (VSTM)49 Comments
William Meyers profile picture
William Meyers
7.48K Followers

Summary

  • Verastem had Copiktra approved by the FDA in September.
  • Q4 2018 sales of Copiktra were just $1.2 million.
  • Copiktra sales should grow from increased awareness, label expansion, and international expansion.

Verastem (NASDAQ:VSTM) is now a commercial stage biotechnology pharmaceutical company with one approved drug, Copiktra. Verastem's stock price has fallen since it received its FDA approval. This reflects stock market conditions in Q4 2018, overenthusiasm leading up to the approval, and Verastem being relatively unknown to investors. It also fell a bit after Q4 results were released, though it has since seen some recovery.

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I believe Copiktra is well-positioned to grow revenue substantially over the next few years. There are specific reasons to believe it will achieve physician acceptance in its currently approved indications. It is likely to see further expansion of its label as new trial data comes in. It also is likely to be approved outside the U.S. and generate global revenue through partners, some of which have already made milestone payments. With revenue growth, the market capitalization and stock price of Verastem should also grow.

Copiktra Basics

Copiktra (duvelisib) was approved by the FDA in September 2018 for the treatment of adult patients with relapsed or refractory CLL (chronic lymphocytic leukemia) or SLL (small lymphocytic lymphoma) after at least two prior therapies. Copiktra also received FDA accelerated approval for the treatment of adult patients with relapsed or refractory FL (follicular lymphoma) after at least two prior therapies. In CLL, SLL, and FL, doctors and patients previously had limited options after progression despite treatment with two prior therapies.

Copiktra is not the first approved PI3K inhibitor approved for use, but it is the first that is a dual inhibitor of PI3K-delta and PI3K-gamma. PI3K-delta and PI3K-gamma have distinct and mainly non-overlapping roles in cells, such as cell proliferation, differentiation, migration and activation. As a dual inhibitor, Copiktra offers an integrated approach to PI3K inhibition that both disrupts intracellular PI3K signaling and helps dismantle the malignant B-cell tumor micro-environment. For a more complete picture

This article was written by

William Meyers profile picture
7.48K Followers
I provided stock and bond research and analysis to a small cap specialist investor, Lloyd Miller, from 2002 until his death in January 2018. For my own account I invest mainly in technology and biotechnology stocks. My technology and investment web site is openicon.com, where readers can view the notes I take to make decisions and to write articles for Seeking Alpha.

Disclosure: I am/we are long VSTM, GILD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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