Mizuho lowers Verastem stock price target to $14 on dilution from financing

Investing.com - Mizuho (NYSE:MFG) has reduced its price target on Verastem (NASDAQ:VSTM) to $14.00 from $16.00 while maintaining an Outperform rating on the stock. The company’s shares have shown remarkable strength, delivering a 257% return over the past year, according to InvestingPro data.

The firm cited dilution from an April financing as the primary reason for the price target reduction, though it expressed continued optimism about the company’s overall prospects. Despite the dilution concerns, InvestingPro data shows the company maintains a healthy current ratio of 3.46, with liquid assets exceeding short-term obligations.

Mizuho highlighted Verastem’s second-quarter 2025 results, noting a revenue beat for the recently launched Avmapki Fakzynja Co-pack/AFC and reimbursement already secured for AFC’s off-label use in KRAS-wild-type patients.

The research firm also pointed to an upcoming October review for AFC’s potential inclusion in NCCN guidelines as a positive catalyst for the stock.

Mizuho stated that all other pipeline programs remain on track, including avutometinib and defactinib in non-small cell lung cancer and pancreatic ductal adenocarcinoma, as well as VS-7375, a KRAS G12D ON/OFF inhibitor.

In other recent news, Verastem Inc . reported its financial results for the second quarter of 2025, noting a net product revenue of $2.1 million following the launch of its new cancer therapy. Despite reporting a non-GAAP adjusted net loss of $41.4 million, the company bolstered its financial standing with a $75 million private placement. Additionally, Verastem announced updated data from its partner GenFleet Therapeutics’ Phase 1/2 study in China for its KRAS G12D inhibitor, known as GFH375. This study showed a promising 68.8% overall response rate at the recommended Phase 2 dose for patients with advanced non-small cell lung cancer. Across all dose levels, the drug demonstrated a 57.7% response rate in these patients. Furthermore, BTIG reiterated a Buy rating for Verastem, following the improved clinical data for its KRAS G12D inhibitor VS-7375. The data presented an improved overall response rate of 58% among non-small cell lung cancer patients, up from the previously reported 42%. These developments underscore the company’s ongoing efforts in cancer treatment advancements.

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