Verastem Halts Lung Cancer Trial, Pivots in Crowded Field
Shares slide as the biopharma firm reallocates resources from its KRAS G12C program to focus on more promising pancreatic and lung cancer candidates.
Verastem Oncology is discontinuing a clinical trial for a lung cancer treatment, a strategic retreat from a fiercely competitive segment of the oncology market that sent its shares lower. The company announced it would halt the Phase 2 trial, known as RAMP 203, for its drug candidate targeting KRAS G12C-mutated non-small cell lung cancer (NSCLC).
In Tuesday morning trading, Verastem (VSTM) shares fell 3.8% to $7.42. The decision reflects the intense competition in the KRAS G12C inhibitor space, where larger players like Amgen and Mirati Therapeutics have already established a strong presence. Verastem cited the increasingly crowded field and the candidate's modest efficacy as the primary reasons for the pivot.
According to a company press release, the decision will allow the company to reallocate capital and personnel to its more promising clinical programs. The company is shifting its focus to avutometinib in combination with defactinib in its RAMP 205 trial for metastatic pancreatic cancer, a notoriously difficult-to-treat disease.
"While the RAMP 203 trial for patients with KRAS G12C-mutant NSCLC showed some clinical activity, the results were not compelling enough to continue in the face of a highly competitive market," said Dan Paterson, President and CEO of Verastem Oncology. "We believe our resources are better deployed towards our ongoing trials in pancreatic and ovarian cancer, which represent significant unmet medical needs."
The move underscores the challenging dynamics of the KRAS inhibitor market. While the discovery of KRAS inhibitors was a significant breakthrough in cancer therapy, the first generation of these drugs has faced challenges with resistance and durability of response. This has led to a wave of next-generation therapies and combination strategies, creating a high bar for new entrants.
Verastem will now double down on its lead programs, particularly its work in pancreatic cancer. The American Cancer Society estimates that about 66,440 people will be diagnosed with pancreatic cancer in the U.S. in 2024, with a five-year survival rate of just 13%. The high mortality rate creates a significant commercial opportunity for effective new treatments.
Investors will be closely watching Verastem's progress in its remaining clinical programs. The company's pipeline now hinges on the success of its RAMP 205 trial in pancreatic cancer and its RAMP 204 study in ovarian cancer. The strategic shift, while a setback for the company’s lung cancer ambitions, is a pragmatic move to conserve resources and focus on the most promising assets in its portfolio. As reported by FiercePharma, the decision to halt the lung cancer trial was a necessary step to navigate the competitive landscape.
The company's stock has had a volatile year, with a 52-week high of $11.25 and a low of $4.01. Despite the recent setback, Verastem maintains a strong balance sheet and is well-capitalized to fund its revised clinical development strategy through key inflection points. The majority of analysts covering the stock maintain a "buy" or "strong buy" rating, with an average price target of $16.00, suggesting that Wall Street remains optimistic about the company's long-term prospects.