On Friday, Verastem (NASDAQ:VSTM) shares plummeted approximately 63% following an update on clinical trial results. BTIG has responded by lowering their stock price target on the biopharmaceutical company to $13.00 from the previous $27.00, while maintaining a Buy rating.
The adjustment comes after Verastem reported updated data from the RAMP 201 study, which evaluates the effectiveness of avutometinib and defactinib in patients with Low-Grade Serous Ovarian Cancer (LGSOC).
The updated overall response rate (ORR) was 27% among all patients, with 37% in those with KRAS mutant and 15% in wild-type (WT) patients. These figures are notably lower than the 45% ORR from Part A of the study presented at the American Society of Clinical Oncology (ASCO) last year. The reduced ORR has led to a significant sell-off in Verastem's stock.
Despite the lower response rates, BTIG sees potential for the response rates to improve as the data matures. The firm also notes the high unmet need in LGSOC and the possibility of the two-drug regimen being impactful and approvable. Verastem is now seeking accelerated approval for the treatment in the KRAS-mutated population and is awaiting further guidance from the FDA for the KRAS-WT population.
Verastem is expected to present more mature data from the RAMP 201 study at a medical conference in the second half of 2024. This presentation is anticipated to provide a clearer picture of the ORR, the durability of the response, and progression-free survival (PFS).
BTIG has adjusted their market model to reflect a lower peak penetration and probability of success in KRAS WT patients based on the latest regulatory update.
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