Verastem's Ovarian Cancer Drug Showing Promise, Analyst Upgrades Stock

Mizuho Securities has upgraded Verastem Inc VSTM from Neutral to Buy with a price target of $36, up from $24, to reflect additional data from ASCO.

The analyst says data supports plans to secure accelerated approval for avutometinib +defactinib in low-grade serous ovarian cancer (LGSOC). 

Verastem released updated data from Part A of the ongoing registration-directed RAMP 201 (ENGOTov60/GOG3052) trial of avutometinib (VS-6766) alone and in combination with defactinib among LGSOC patients.

Related: Analyst Initiates Verastem With Neutral While 'Waiting For FDA Go-Ahead.'

The avutometinib and defactinib combo resulted in an objective response rate (ORR) of 45% (13/29) and tumor shrinkage in 86% (25/29) of evaluable patients. 

The analyst notes the ORR was better than the 28% reported in January 2023 and is in line with the 46% ORR first reported for FRAME (IST study).

Among the patients with KRAS mutant LGSOC, the ORR was 60% (9/15) in the combination arm, from 27%, and ORR in the KRAS-wild-type arm was 29% (4/14) vs. 29% (4/14).

Mizuho writes that a gating factor for the shares is the time to accelerated approval pathway designation. It does not expect this to occur until after a six-month follow-up becomes available for RAMP 201 Part B data, which could be in late-2023/early-2024.

Price Action: VSTM shares are up 20.50% at $11.23 on the last check Thursday.