Verastem Sinks 4% After Halting Lung Cancer Drug Trial
The biotech firm is discontinuing its RAMP 203 study in a competitive cancer market, pivoting resources to its next-generation KRAS G12D inhibitor.
Verastem Oncology (NASDAQ: VSTM) shares fell nearly 4% in trading after the company announced it was discontinuing a Phase 1/2 clinical trial for its lung cancer drug combination, marking a significant strategy shift for the biopharmaceutical firm.
The company announced Monday it would halt the RAMP 203 trial, which was evaluating a combination of its drug avutometinib with sotorasib for patients with KRAS G12C-mutant non-small cell lung cancer (NSCLC). The decision came after an evaluation of interim data. Shares of Verastem fell 3.72% to $7.76 on the news.
Verastem is reallocating resources to focus on the development of VS-7375, an oral drug that targets the KRAS G12D mutation, a different but common cancer-driving gene. The company plans to move VS-7375 into a Phase 1/2a study by mid-2025, according to company statements.
The pivot comes as the company navigates a highly competitive market for KRAS G12C inhibitors. The field is currently dominated by major players, including Amgen’s Lumakras (sotorasib) and Bristol Myers Squibb’s Krazati (adagrasib). The high bar for success in this segment likely influenced Verastem's decision to redirect its focus. Interim data from the now-discontinued trial showed a 40% overall response rate in treatment-naïve patients, with a median progression-free survival of 11.1 months.
“Following a strategic review of the RAMP 203 program and the future KRAS G12C treatment landscape, we have decided to discontinue the trial,” said Dan Paterson, President and CEO of Verastem Oncology. He added that the company's efforts will now be concentrated on its differentiated programs, particularly the development of its KRAS G12D inhibitor.
The strategic shift represents a calculated move away from a crowded therapeutic area toward a potentially more open field. While the KRAS inhibitor market is projected to grow substantially, reaching over $2 billion by 2030, the G12C mutation has been the primary focus of initial drug development efforts.
Verastem's focus on VS-7375, for which it has already received Fast Track designation from the FDA, suggests a strategy to lead in an area with fewer competitors. Patients currently enrolled in the RAMP 203 study will be allowed to continue their treatment if they are seeing clinical benefits.
Despite the trial setback and subsequent stock decline, Wall Street analysts appear to maintain a positive long-term outlook on the company, which has a market capitalization of approximately $607 million. Based on data from nine analysts, Verastem holds eight 'buy' ratings and one 'strong buy', with an average price target of $16.00, suggesting significant upside from its current level. This bullish sentiment likely reflects confidence in the company's broader pipeline and the potential of its refocused strategy on the KRAS G12D target.