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On Thursday, H.C. Wainwright reaffirmed a Buy rating and a $7.00 price target on shares of Verastem (NASDAQ:VSTM), following the company's presentation of updated results from its ongoing clinical study. According to InvestingPro data, analyst targets for VSTM range from $7 to $15, with a strong consensus recommendation of 1.22 (where 1 is a Strong Buy).
Verastem, a biopharmaceutical company, shared new data from the Phase 1/2 RAMP 203 study, which examines a combination of avutometinib, defactinib, and sotorasib in treating KRAS G12C mutant non-small cell lung cancer (NSCLC).
The RAMP 203 study had previously reported findings in October 2023, highlighting a 25% objective response rate (ORR) in KRAS G12C-naïve patients treated with a doublet combination of avutometinib and sotorasib.
The latest update from the study presented initial results from patients who had progressed on previous KRAS G12C inhibitor treatments. In this subset of patients, while no responses were observed, two out of three showed a 20% reduction in tumor size, and all three patients were still on treatment as of the November 1 data cutoff.
The company emphasized that there have been no reported dose-limiting toxicities with the triplet therapy, which is significant given the novel nature of this drug combination. Verastem expects to complete patient enrollment for the KRAS G12C prior-treated cohort in early 2025 and plans to provide further updates before possibly expanding the patient groups for the doublet or triplet combination therapies.
InvestingPro analysis indicates the company maintains a Fair financial health rating, though it's currently not profitable with an EBITDA of -$114.5 million in the last twelve months.
As of the end of the third quarter of 2024, Verastem reported having $113 million in cash and cash equivalents. The management team believes these funds are sufficient to support the company's operations through the first half of 2025. This financial update accompanied the clinical trial results in the analyst's reiteration of the Buy rating and the $7 price target for Verastem's stock.
InvestingPro data reveals the company holds more cash than debt and maintains a healthy current ratio of 3.23, though it's quickly burning through cash. Subscribers to InvestingPro can access the comprehensive Pro Research Report for deeper insights into Verastem's financial health and growth prospects.
In other recent news, Verastem has seen a flurry of activity surrounding its financial performance and drug development. Mizuho (NYSE:MFG) Securities has raised its price target on Verastem to $9.00, maintaining an Outperform rating, due to a revised valuation model for the company's leading cancer treatment, avutometinib plus defactinib (A+D). This change has led to a projection of peak year sales for A+D at approximately $750 million, with peak sales expected to be reached in 2029.
On the other hand, Truist Securities maintained a Buy rating on Verastem with a $15.00 price target, expressing confidence in the company's future value. This comes in the wake of the company's announcement of an accelerated pathway opportunity focusing on KRAS mutations, which could expedite the development process for its treatments.
In addition, Verastem's second-quarter financial results exceeded expectations due to milestone payments, and the company announced plans to raise approximately $55 million through a public offering. Other firms, including B.Riley, and RBC Capital Markets, have also revised their stock targets for Verastem following these developments.
Lastly, Verastem received the FDA's Orphan Drug Designation for a drug combination aimed at treating pancreatic cancer and disclosed promising interim results from its ongoing RAMP 205 trial. These are part of the company's recent developments, emphasizing its continued efforts in oncology.
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