Verastem second quarter net loss increases to $6.8 million

Verastem, Inc.Aug 13 2012

Verastem, Inc., (NASDAQ: VSTM) a biopharmaceutical company focused on discovering and developing drugs to treat breast and other cancers by targeting cancer stem cells, today reported financial results for the quarter ended June 30, 2012, and also commented on certain corporate accomplishments and plans.    

"We made significant advances in our therapeutic programs during the second quarter," said Christoph Westphal, M.D., Ph.D., Chairman, President and Chief Executive Officer of Verastem. "The acquisition of the Phase 2-ready focal adhesion kinase inhibitors from Pfizer accelerates this key cancer stem cell-targeting program by approximately 12-18 months, and we are now positioned to initiate a potential registration study in mesothelioma next year."

Recent Accomplishments

Our significant recent accomplishments include the following:

Focal Adhesion Kinase (FAK) Inhibition

• Accelerated the FAK program by 12-18 months with the in-license of VS-6063 from Pfizer
  • VS-6063 has completed a Phase 1 study in advanced solid tumors, where it was well tolerated and demonstrated signs of clinical activity
  • VS-6063 is expected to enter into a Phase 2 mesothelioma study in mid-2013
  • A positive Phase 2 trial in mesothelioma could present an opportunity for an accelerated approval
• Nominated VS-4718 as a development candidate
  • IND-enabling toxicology studies were initiated in June 2012
  • Accelerated VS-4718 clinical development with a planned Phase 1 healthy volunteer study anticipated to initiate in Q1 2013

Dual PI3K/mTOR Inhibition

• Outlined clinical development plans for VS-5584 including a Phase 1 study in patients with advanced solid tumors anticipated to commence in mid-2013

Corporate

• Held our first annual Research and Development Day: outlined scientific rationale and clinical plans for each of our therapeutic programs
• Established a research collaboration with Eisai to discover next-generation small molecule inhibitors of Wnt signaling
• Presented data at the 2012 ASCO meeting from our biomarker diagnostic development program
• Added Richard S. Sackler, M.D., Chairman of Purdue Pharma, to our Scientific Advisory Board

Second Quarter 2012 Financial Results

As of June 30, 2012, Verastem had cash, cash equivalents and investments of $104.3 million compared to $56.8 million on December 31, 2011.

Net loss for the three months ended June 30, 2012, (the "2012 Quarter") was $6.8 million, or $0.34 per share applicable to common shareholders, as compared to net loss of $2.5 million, or $2.03 per share, for the three months ending June 30, 2011 (the "2011 Quarter"). Net loss includes stock-based compensation expense of $1.5 million and $36,000 for the 2012 Quarter and 2011 Quarter, respectively.

Research and development expense for the 2012 Quarter was $4.7 million compared to $1.7 million for the 2011 Quarter. The $3.0 million increase from the 2011 Quarter to the 2012 Quarter principally resulted from an increase of $1.2 million for personnel costs, including stock-based compensation of $751,000, an increase of $1.1 million in contract research organization expense, an increase of $365,000 in license fee expense and an increase of $201,000 for laboratory supplies.

General and administrative expense for the 2012 Quarter was $2.2 million compared to $759,000 for the 2011 Quarter. The $1.4 million increase from the 2011 Quarter to the 2012 Quarter principally resulted from an increase of $874,000 for personnel costs, including stock-based compensation of $696,000, an increase of $318,000 in professional fees primarily related to additional legal and accounting fees for being a publicly traded company, an increase of $100,000 in insurance primarily related to being a publicly traded company and an increase of $99,000 in consulting fees.