Analyst Conference Summary

conference date: November 7, 2018 press release only
for quarter ending: September 30, 2018 (Q3, third quarter 2018)

No conference was held, this is a summary of the press release.

Forward-looking statements

Overview: FDA approved duvelisib for CLL. (Renamed Copikta) First revenue from sales received.

Basic data (GAAP):

Revenue was $15.5, up sequentially from $10.0 million, and up from $0.0 year-earlier.

Net income was negative $21.7 million, down sequentially from negative $18.4 million, but up from negative $23.1 million year-earlier.

EPS, diluted, was negative $0.29, up sequentially from negative $0.30, and up from negative $0.61 year-earlier.

Guidance:

none

Conference Highlights:

Robert Forrester, CEO of Verastem, said "During the third quarter, we achieved a remarkable milestone with our lead product Copikta (duvelisib) receiving its first regulatory approval from the U.S. Food and Drug Administration. We were also delighted to have signed an exclusive licensing agreement with CSPC Pharmaceutical Group Limited for the development and commercialization of Copikta for all oncology indications in China, further extending the global reach of our product. This is an exciting time at Verastem Oncology, and we believe this is just the beginning for both Copikta and the Company. It is our goal to unlock the potential of PI3K inhibition, initially as a monotherapy, and through novel combinations to potentially expand its use to broader hematologic and solid tumors."

In September the FDA approved Copikta (duvelisib), a P13K inhibitor, for treatment of relapsed or refractory CLL/SLL and FL, and for accelerated approval for relapsed or refractory FL. The supporting Phase 3 study met its primary endpoint and had a manageable safety profile. The data had been presented at ASH.

Product revenue from duvelisib was $0.5 million. License revenue was $15 million for the upfront payment from CSPC for Chinese rights.

Verastem signed an exclusive license agreement with Yakult Honsha Co. for duvelisib in Japan. There was a $10 million upfrong payment plus another potential $90 million in milestone payments and double-digit royalties.

Buildout of the commercial team for duvelisib is led by Joseph Lobaki, former CCO of Medivation. The launch is on track and Copiktra was available for distribution on the day it was approved. Already included in NCCN guidelines, and reimbursement coverage has been secured.

Updated data was presented at during the quarter for duvelisib and defactinib. More data will be presented at ASH in December.

A Phase 1/2 trial for Copiktra in combination with venetoclax for CLL was initiated by the Dana-Farber Cancer Institute.

Cash and equivalents ended at $145.6 million, down sequentially from $168.7 million. $150 million in 5% convertible senior notes were issued. Verastem has a $50.0 million line of credit available.

Cost of good sold was $49 thousand. R&D expense was $11.6 million. G&A was $25.4 million. Amortization $31 thousant. Total operating expense was $37.1 million. Loss from operations was $21.6 million. Interest net expense $0.1 million.

Q&A:

none

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