On Tuesday, Verastem Inc . (NASDAQ:VSTM), currently trading at $3.67, saw its price target boosted by BTIG from $13.00 to $20.00, while the firm maintained a Buy rating on the stock. According to InvestingPro data, analyst targets now range from $7 to $20, suggesting significant upside potential.
The adjustment followed the announcement that the U.S. Food and Drug Administration (FDA) has accepted Verastem's New Drug Application (NDA) for Avutometinib in combination with Defactinib. This treatment is aimed at Recurrent KRAS Mutant Low-Grade Serous Ovarian Cancer (LGSOC) and is now under priority review, with a Prescription Drug User Fee Act (PDUFA) date set for June 30, 2025.
BTIG's analyst expressed increased confidence in the drug's market approval prospects, anticipating that by mid-2025 the combination could become the first FDA-approved treatment option for women with KRASm LGSOC. This optimism is based on the FDA's decision to grant priority review status to the NDA filing and insights gained from a recent Key Opinion Leader (KOL) call.
The analyst's updated outlook has factored in an elevated probability of success for the drug combination, raising it from 65% to 80%. This revised probability was a significant factor in the decision to increase the price target for Verastem's shares. The firm's reiteration of the Buy rating signals continued support for the stock's potential. InvestingPro analysis indicates the company holds more cash than debt on its balance sheet, though it's currently burning through cash with an EBITDA of -$114.48M.
The FDA's acceptance of the NDA under priority review is a positive development for Verastem, as priority review designation is granted to drugs that, if approved, would represent significant improvements in the treatment, diagnosis, or prevention of serious conditions.
With the PDUFA date set for June 30, 2025, stakeholders will be watching closely for the FDA's decision, which could have a major impact on Verastem's trajectory in the oncology market.
InvestingPro subscribers can access additional insights, including 8 more ProTips and a comprehensive analysis of Verastem's financial health and market position through the Pro Research Report.
In other recent news, Verastem has been the subject of significant developments. Analyst Kalpit Patel from B.Riley has reaffirmed a Buy rating and a $7.00 price target for Verastem, following new details from a draft listing application by GenFleet Therapeutics. This application reveals promising preclinical data for a KRAS G12D inhibitor, a project in collaboration with Verastem.
H.C. Wainwright and Truist Securities have both maintained a Buy rating on Verastem shares. Wainwright's decision follows the company's presentation of updated results from its RAMP 203 study, examining a combination of avutometinib, defactinib, and sotorasib in treating KRAS G12C mutant non-small cell lung cancer. Truist's stance comes as Verastem announced an accelerated pathway opportunity focusing on KRAS mutations.
Mizuho (NYSE:MFG) Securities raised its price target on Verastem to $9.00, maintaining an Outperform rating, due to a revised valuation model for the company's leading cancer treatment, avutometinib plus defactinib. This change led to a projection of peak year sales for the treatment at approximately $750 million, expected to be reached in 2029.
Verastem's second-quarter financial results exceeded expectations due to milestone payments, and the company announced plans to raise approximately $55 million through a public offering. Lastly, Verastem received the FDA's Orphan Drug Designation for a drug combination aimed at treating pancreatic cancer and disclosed promising interim results from its ongoing RAMP 205 trial.
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