Verastem, Inc. (VSTM) Q3 2025 Earnings Call Transcript

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Overview

The earnings call reflects positive sentiment due to early adoption of the new product, a strong financial runway, and strategic plans for clinical trials and market expansion. Despite some uncertainties in patient data and NCCN feedback, the overall outlook is optimistic with potential for label expansion and interest from partners. The positive adoption and feedback from healthcare providers, combined with a solid cash position, suggest a favorable stock price reaction.

Key Financial Performance

Net Product Revenue $11.2 million for the third quarter of 2025, representing the first full quarter of commercial operations. This revenue surpassed expectations and was driven by consistent adoption among academic centers and community oncologists.

Cost of Sales $1.7 million for the third quarter of 2025. This did not include a significant amount of product costs as inventory produced prior to FDA approval was fully expensed at the time of production.

Research and Development (R&D) Expenses $29.0 million for the third quarter of 2025. This increase was driven by ongoing global confirmatory Phase III RAMP-301 clinical trial, the ongoing BS-7375 Phase I/IIa clinical trial, and higher costs associated with drug substance production activities related to BS-7375.

Selling, General, and Administrative (SG&A) Expenses $21.0 million for the third quarter of 2025. These expenses were driven by commercial activities and operations, including personnel-related costs to support the ongoing CO-PACK launch.

Non-GAAP Adjusted Net Loss $39.4 million or $0.54 per share diluted for the third quarter of 2025, compared to $35.3 million or $0.88 per share diluted for the same quarter in 2024. The increase in net loss reflects higher R&D and SG&A expenses.

Cash, Cash Equivalents, and Investments $137.7 million as of the end of the third quarter of 2025. This provides runway into the second half of 2026, supported by future revenues and the exercise of outstanding cash warrants.

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Operating Highlights

FDA approval for AVMAPKI FAKZYNJA CO-PACK: Achieved FDA approval for treating KRAS-mutated recurrent low-grade serous ovarian cancer (LGSOC).

Commercial launch performance: Generated $11.2 million in net product revenue in Q3 2025, surpassing expectations. Strong adoption among academic centers and community oncologists.

Physician engagement and patient support: Engaged 133 prescribers, with 65% of prescriptions from top 100 organizations. High engagement with gynecological and medical oncologists.

Market penetration: 65% of prescriptions from top 100 organizations, with a mix of academic and community providers. High awareness and engagement among healthcare providers.

Reimbursement and access: Reimbursement has not been a barrier; payer coverage exceeds 80%. Time to fill prescriptions is approximately 12-14 days.

Operational efficiencies in distribution: Specialty distributors and pharmacies onboarded, ensuring seamless access and minimizing inventory stocking.

Expense management: R&D expenses at $29 million and SG&A expenses at $21 million, focused on commercial activities and clinical trials.

Pipeline development: Advancing VS-7375 clinical trials for KRAS G12D mutant cancers. Initial safety data shows no dose-limiting toxicities.

Future growth plans: Expecting data readouts in 2026 for pancreatic cancer and G12D mutant solid tumors. Engaging with FDA for registration-enabling studies.

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Risk or Challenges

Regulatory and Clinical Trial Risks: The company is advancing multiple clinical trials, including the RAMP-301 Phase III trial and the VS-7375 Phase I/IIa trial. Any delays, failures, or adverse findings in these trials could impact timelines and strategic objectives. Additionally, the company plans to engage with the FDA in 2026 to discuss registration-enabling studies, which introduces regulatory uncertainty.

Financial Sustainability: The company reported a non-GAAP adjusted net loss of $39.4 million for the third quarter of 2025. While current cash reserves and projected revenues are expected to provide runway into the second half of 2026, any shortfall in revenue growth or unexpected expenses could strain financial resources.

Market Adoption and Competitive Pressures: Although the initial launch of AVMAPKI FAKZYNJA CO-PACK has shown strong adoption, the company is still in the early stages of market penetration. Sustained adoption depends on continued physician engagement, patient retention, and overcoming competitive pressures in the oncology market.

Supply Chain and Distribution Risks: The company has onboarded specialty distributors and pharmacies to manage product distribution. Any disruptions in this supply chain or issues with inventory management could impact product availability and revenue.

Reimbursement and Access Challenges: While reimbursement has not been a barrier so far, the company must ensure continued payer support and seamless access for patients. Any changes in payer policies or delays in reimbursement could affect patient access and revenue.

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Guidance & Outlook

Revenue Growth: The company expects continued growth in revenue from the AVMAPKI FAKZYNJA CO-PACK, driven by strong adoption among healthcare providers and patients. The company is optimistic about steady adoption over time.

Clinical Pipeline Advancements: Several important data readouts are expected in the first half of 2026, including safety and efficacy results from the RAMP-205 expansion cohort in first-line advanced pancreatic cancer and initial results from the Phase I/IIa trial evaluating VS-7375 in advanced G12D mutant solid tumors. The company plans to advance trials of VS-7375 in both monotherapy and combination expansion cohorts in pancreatic, lung, and colorectal cancers.

Regulatory Engagement: The company plans to engage with the FDA in the first half of 2026 to discuss the path forward for VS-7375, including harmonizing existing data to advance the program efficiently.

Market Expansion: The company is focused on expanding the opportunity set for AVMAPKI FAKZYNJA CO-PACK and ensuring every appropriate patient benefits from this novel treatment. The company is targeting both academic and community oncology practices to maximize reach.

Financial Outlook: The company has sufficient capital to fund ongoing commercial launch efforts and clinical development plans into the second half of 2026. Future revenues from AVMAPKI FAKZYNJA CO-PACK sales are expected to contribute to financial stability.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:Can you provide more comments on how the LGSOC product is being used in the market, particularly in terms of prior lines of therapy and KRAS mutant versus wild-type use?

A:The product is being used across a range of therapy lines, including first recurrence and later lines. It is being used for both KRAS mutant and wild-type patients, with some off-label use. However, exact numbers are not available due to limited visibility through the distribution channel.

Q:What type of analysis did the IDMC perform for the RAMP-301 study update?

A:The IDMC performed an analysis that led to a recommendation to add about 30 patients across both KRAS wild-type and mutant groups. The study accrued faster than expected, resulting in fewer events than anticipated. The additional patients were added to ensure sufficient data for conclusions.

Q:Have you heard back from the NCCN committee review in October regarding label expansion to include KRAS wild-type patients?

A:No, the company has not received any updates from the NCCN committee. The timeline for feedback is unclear and could range from early next year to earlier, depending on the committee's process.

Q:Do you have any details on new patient starts versus refills contributing to the strong quarter?

A:The company is not providing specific details on new prescriptions versus refills at this time. However, they are seeing significant new prescriptions and continued refills from patients who started therapy earlier in the quarter.

Q:Can you provide details on patient retention in the LGSOC market and dropout rates?

A:It is too early to provide specific details on patient retention or dropout rates. The average treatment duration in the clinical trial was about 18 months, and patients starting at earlier lines of treatment may experience prolonged benefits.

Q:Are there significant differences in how patients are treated in the VS-7375 study compared to the study in China?

A:Yes, there are differences. In the U.S., patients are fed and given prophylactic antiemetics, unlike in China where patients were fasted. These interventions have resulted in no GI toxicities greater than grade 1 in the U.S. study.

Q:What was the enrollment plan for the confirmatory trial for KRAS mutant and wild-type patient populations?

A:The total enrollment was planned for 270 patients, with guardrails to ensure 1/2 to 1/3 of the population was KRAS mutant. The data monitoring committee recommended adding a small number of patients to both groups.

Q:What is the next step or priority in the commercial launch?

A:The company plans to continue its current strategy, focusing on both increasing the number of prescribers and ensuring higher prescription rates per doctor. They aim to maintain existing prescribers, onboard new ones, and ensure patients stay on therapy.

Q:What is the patient's journey like after receiving a prescription?

A:Patients receive a one-month supply (3 weeks on, 1 week off). Initial doctor visits are more frequent to monitor for early toxicities, but this decreases to every 3 to 6 months over time.

Q:What were the potential outcomes of the RAMP-301 IDMC recommendation to upsize the study?

A:The outcomes could have ranged from futility to adding up to 100 patients or none. The IDMC recommended adding about 30 patients due to fewer events than expected, and the company followed this recommendation.

Q:Were there any side effects reported in the initial cohort of the 7675 G12D study?

A:There were some grade 2 or 3 side effects in very small numbers, but no unexpected signals. GI toxicities were limited to grade 1, and a more comprehensive update on efficacy and safety is expected early next year.

Q:Can you share any anecdotal updates from the LGSOC product launch, including off-label usage?

A:The majority of use has been within the KRAS mutant LGSOC population, with some off-label use for wild-type patients. Payers have been covering these cases as well.

Q:Has there been any inbound interest from partners regarding M&A or collaborations?

A:The company has received inbound interest, particularly due to the strong launch trajectory and excitement around the G12D molecule. They are open to discussions but are focused on their current plans.

Q:Review of Unclear Management Responses

A:Management avoided providing specific details on new patient starts versus refills, patient retention/dropout rates, and the exact timeline for feedback from the NCCN committee. They also did not disclose specifics about M&A discussions or provide full transparency into the IDMC's decision-making process for the RAMP-301 study.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

VSTM Transcript

Verastem, Inc. (VSTM) Q3 2025 Earnings Call Transcript

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Verastem, Inc. (VSTM) Q2 2025 Earnings Call Transcript

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The earnings call summary indicates strong financial performance, positive product development updates, and effective market strategy, with minimal payer pushback and successful reimbursement strategies. The Q&A section reinforced positive sentiment with management's confidence in launch momentum and successful engagement with the healthcare community. Despite some uncertainties in EU approval timelines, the overall outlook is optimistic, with a focus on expansion and minimal financial concerns.

VSTM Report

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