Send me real-time posts from this site at my email

Why Verastem Stock Jumped Briefly This Morning

What happened

Shares of Verastem (NASDAQ: VSTM) jumped by as much as 11% this morning after the company reported second-quarter earnings and announced a deal to sell development rights to a drug. The stock gave up those gains and closed breakeven for the day.

So what

Revenue in the second quarter was $4.3 million, which resulted in an adjusted net loss of $20.5 million, or $0.12 per share. The developmental biotech company finished the quarter with $160.8 million in cash. Verastem also said it had entered into a definitive agreement to sell its global commercial and development rights to COPIKTRA (duvelisib) to Secura Bio in a deal worth up to $311 million. That transaction includes an up-front payment of $70 million, with additional possible payouts if Secura Bio can achieve various regulatory and sales milestones.

Image source: Getty Images.

"The first half of 2020 has been a time of transformational change at Verastem Oncology," CEO Brian Stuglik said in a statement. "We recently announced our newest strategic transaction, the sale of COPIKTRA to Secura Bio, which allows us to monetize this asset while focusing our resources and efforts on advancing the VS-6766 and defactinib combination program in KRAS mutant solid tumors."

Now what

The deal with Secura Bio is expected to close during the third quarter and will provide Verastem with enough cash to fund its programs for VS-6766 and defactinib through 2024. Operating expenses in 2020 are expected to be in the range of $80 million to $90 million, or about 40% lower than in 2019. Starting in 2021, the company forecasts annual operating expenses of roughly $50 million.

10 stocks we like better than Verastem
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Verastem wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of August 1, 2020

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue