Verastem, Inc. 2026 Q2 Earnings Call

Please go ahead. Thank you, operator.

Welcome everyone, and thank you for joining us today to discuss Verastem's second quarter 2026 financial results and recent business updates. This afternoon, we issued a press release detailing these results, along with a slide presentation that we will reference during our call today. Both are available on the Investor Relations section of our website. Before we begin, let me point out that we'll be making forward-looking statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and actual results may differ materially. We encourage you to consult the risk factors discussed in our SEC filings for additional detail. Additionally, today we'll be discussing certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are provided in the press release we issued today.

Joining me on today's call to deliver prepared remarks and take your questions are Dan Paterson, President and Chief Executive Officer, Dan Lyons, Chief Commercial Officer, and Dan Calkins, Chief Financial Officer. Dr. Michael Kauffman will be joining us for the Q&A portion of the call. I will now turn the call over to Dan.

Thank you, Julissa. Good afternoon, and thank you for joining our call today. We delivered a strong second quarter with meaningful progress across both our commercial business and pipeline. For the quarter, we generated net product revenues of $25.1 million, reflecting continued execution of our commercial strategy, putting us back on track and reinforcing the long-term opportunity for avutometinib defactinib CO-PACK. We also strengthened the balance sheet with a non-dilutive royalty financing agreement with Oberland Capital to secure up to $75 million in funding, of which we expect to draw $50 million at closing. Combined with a $15 million milestone payment from Secura Bio for a COPIKTRA sales milestone, the incremental $90 million in non-dilutive funding strengthens our balance sheet and allows us to get beyond key data readouts, advance partnership discussions, and preserves strategic flexibility as we evaluate future financing opportunities.

As we've shared previously, we continue to expect the LGSOC business will become self-sustaining by the end of 2026, meaning that commercial revenue will support both the ongoing commercial organization and the existing avutometinib and defactinib development franchise. As Dan Lyons will discuss, the commercialization of the CO-PACK is progressing well, and we're encouraged that the changes we made are having an impact. Since the first quarter, we've seen a meaningful rebound with significant quarter-over-quarter growth driven by growing physician confidence in initiating treatment for new patients, physicians prescribing to more patients in earlier lines, and increasing patient refills. In addition, our field teams are continuing to support prescribers in helping patients stay on therapy to realize the full benefit of the treatment. These trends reinforce our belief that adoption will continue to grow as physicians become increasingly comfortable using the combination at a patient's first or next recurrence.

In June, we reported a positive update on the RAMP 205 pancreatic cancer data. Looking ahead, we believe the regimen of avutometinib plus defactinib in combination with chemotherapy can play an important role in the second-line treatment of PDAC, following either a pan-RAS or a KRAS G12D inhibitor to help address resistance mechanisms that are expected to emerge. Turning to VS-7375, we have an opportunity to meaningfully advance treatment for patients with KRAS G12D-driven cancers. Our goal isn't simply to extend patients' lives, but to do so with a treatment designed to specifically target the biology of these cancers without unnecessary on-target toxicities. Ultimately, we want patients to spend more time living their lives, not managing nasty side effects from their treatment. The progress we've seen across the RAS field is validation of the possibilities.

It has also made clear that there remains significant opportunity to improve both outcomes and the overall treatment experience for the approximately 60,000 patients diagnosed each year in the U.S. alone with a KRAS G12D-driven cancer. Recently, I heard about a young woman in her thirties who was participating in our trial, and her story and experience in the trial reminded me why this work matters. She was diagnosed with a KRAS G12D mutated advanced non-small cell lung cancer. She'd never smoked and did not respond to current standard of care chemo plus immunotherapy. She was not only living with cancer but experiencing constant symptoms of the disease that disrupted her quality of life.

When she entered our study and began treatment with VS-7375 at 600 milligrams, her primary tumor shrank by more than 65% within six weeks, and her symptoms also started to improve. She remains on treatment today and continues to do well. While this is one patient's experience, it serves as a powerful reminder about what is at stake. That behind every data point is a person and family member hoping for not just more time, but more quality time. In June, we shared preliminary clinical data from the phase I/II TARGET-D 101 study, which further strengthened our conviction that VS-7375 has the potential to not only become the best-in-class oral KRAS G12D inhibitor, but a treatment that patients can truly tolerate. We continue to be encouraged by the emerging antitumor activity across multiple tumor types and the favorable tolerability profile we've seen so far.

Together, these data support the advancement of our three ongoing phase II registration-directed studies in pancreatic, colorectal, and non-small cell lung cancers. Operationally, we've continued to execute the VS-7375 development program at an impressive pace. We completed target enrollment in the pancreatic, colorectal, and non-small cell lung cancer dose expansion cohorts of the TARGET-D 101 study, received FDA Fast Track designation for non-small cell lung cancer, and initiated all three of our phase II registration-directed studies, with the first patients now dosed in each trial. These studies represent an important step toward generating additional data to support the potential for the accelerated approval pathway and set the stage for our upcoming frontline phase III studies. We look forward to sharing a meaningful data update on VS-7375, including response rates across our three lead tumor types, in October.

With that, I'll turn the call over to Dan Lyons for our commercial update.

Dan? Thanks, Dan. We continued to make meaningful progress in the second quarter as the launch matures.

We are pleased with the quarterly sales of AVMAPKI FAKZYNJA CO-PACK, $25.1 million. Our commercialization of the CO-PACK remains focused on three priorities: driving consistent new patient demand, expanding use earlier in the treatment journey, and helping patients to stay on therapy to realize the full benefit of treatment. Across each of these areas, we are seeing encouraging signs that the changes we made are having an impact, and physician experience continues to deepen. Our first commercial priority is to continue to grow new patient starts. We continued to see healthy and consistent levels of new patient starts and refills throughout the second quarter. As the new patient demand continues to build, we expect this to convert to future refills.

We're seeing increasing evidence of repeat prescribing that is trending higher among existing writers and greater depth of prescribing among our existing accounts, giving us confidence that adoption continues to broaden. While our distribution model doesn't provide complete visibility into every prescription, we are pleased with the number of new accounts that adopted the CO-PACK in the second quarter across academic and community targets. Through the end of the second quarter, adoption continues to expand as experience with AVMAPKI FAKZYNJA CO-PACK deepens, with a meaningful addition of first-time prescribers and new accounts. Gynecologic oncologists are the primary prescribers, reflecting their central role in managing patients with LGSOC from diagnosis through the course of their disease. Adoption continues to expand across both academic and community practices. In the community setting, our site-specific alerts help identify patients, and we are already seeing early returns from that effort.