Verastem, Inc. (VSTM)·Q3 2025 Earnings Summary

Executive Summary

• First full commercial quarter delivered $11.2M net product revenue from AVMAPKI FAKZYNJA CO-PACK, materially above S&P Global consensus, with broad payer coverage and rapid time-to-fill; management said results “exceeded expectations” and adoption is “consistent” across academic and community oncologists .
• Non-GAAP EPS of $(0.54) beat consensus; GAAP loss widened on a large non-cash warrant liability mark, while gross margin expanded versus Q2 given limited COGS recognition from pre-approval inventory accounting .
• RAMP 301 confirmatory Phase 3 completed planned enrollment; IDMC requested a modest one-time ~29-patient increase across KRAS mutational strata, with timelines intact; management remains blinded and cited fewer-than-expected events due to rapid accrual .
• VS-7375 (KRAS G12D ON/OFF) cleared 400/600 mg monotherapy cohorts without DLTs and with no GI AEs > Grade 1; early anti-tumor activity observed; cetuximab combo cohort opened; multiple readouts guided for 1H26 .
• Near-term stock catalysts: commercial ramp durability and payer breadth, RAMP 203 interim (Q4 25), plus 1H26 VS-7375 interim and RAMP 205 update; confirmatory outcomes and NCCN scope remain watch items .

What Went Well and What Went Wrong

• What Went Well

  • Commercial launch traction: “net revenue of over $11 million” in Q3 on “consistent adoption” across academic and community settings; 133 prescribers; covered lives >80%; time-to-fill ~12–14 days .
  • RAMP 301 execution: planned enrollment completed early; only a “modest” sample-size increase (~29 patients) across KRAS mutant and wild-type arms per IDMC, with timelines maintained .
  • KRAS G12D program momentum: VS-7375 cleared 400/600 mg without DLTs; “no nausea, vomiting, or diarrhea greater than Grade 1,” with early tumor reductions; cetuximab combination initiated .

• What Went Wrong

  • Earnings quality/noise: GAAP net loss widened to $(98.5)M, driven largely by a $(55.9)M unfavorable warrant liability fair value change; OpEx elevated on launch and pipeline investment .
  • Limited visibility: management declined to provide gross-to-net or detailed new vs. refill metrics; patient retention commentary still “too early” (trial DOR ~18 months, but commercialization nascent) .
  • External uncertainties: outcome/timing of NCCN review for potential broader listing (KRAS wild-type) not yet known; off-label use exists, but data visibility limited via distributor channels .

Financial Results

• Notes: Q2 COGS = $0.318M product + $0.128M intangible amortization . Q3 COGS = $1.670M product + $0.290M intangible amortization . CFO noted Q3 COGS “did not include a significant amount of product costs as inventory produced prior to FDA approval was fully expensed at the time of production,” supporting elevated gross margin .

Operating detail and balance sheet

KPI snapshot (commercial)

• Segment breakdown: not applicable (single commercial product revenue line) .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Our performance in Q3…exceeded expectations with net revenue of over $11 million and demonstrated the strength of our growing commercial business and consistent adoption by both academic and community oncologists” (Dan Paterson, CEO) .
• “In the study, VS-7375 cleared both the 400 mg… and the 600 mg… monotherapy doses with no dose-limiting toxicities… no nausea, vomiting, or diarrhea greater than Grade 1 were reported” .
• On RAMP 301 IDMC: “I’m optimistic because the number of recommended additional patients was relatively small… it was across both wild-type and mutant… part of the reason… there just aren’t enough events yet” .
• Commercial access/timing: “Payer coverage continues to be broad, and the time to fill prescriptions has been fast (~12–14 days)… covered lives has now exceeded 80%” (Mike Crowther, CCO) .

Q&A Highlights

• RAMP 301 interim: IDMC had full data access; options ranged from futility to +100 patients; they chose a small ~29-patient increase across KRAS WT and mutant; rationale likely fewer events from faster accrual; company remains blinded .
• NCCN update: Committee met in October on broader listing; outcome unknown and timing uncertain (could slip into early next year) .
• Commercial mix/retention: Too early to quantify new vs refills; both are contributing; patient DOR in trials ~18 months suggests potential durability but still early in launch .
• VS-7375 tolerability: U.S. cohorts include fed dosing and prophylactic antiemetics (unlike China), which management believes improved GI tolerability; no GI >G1 in first two cohorts .
• Usage scope: Vast majority within KRAS-mutant LGSOC; some wild-type use observed with coverage, but limited visibility via distributor channels .

Estimates Context

• Q3 2025: Revenue $11.242M vs S&P Global consensus $5.760M (beat by +$5.482M / +95.3%); Non-GAAP EPS $(0.54) vs consensus $(0.6333) (beat by +$0.0933) . Values marked with * are from S&P Global estimates data.*
• Q2 2025: Revenue $2.137M vs $1.116M (beat by +$1.021M / +91.5%); Non-GAAP EPS $(0.63) vs $(0.7413) (beat by +$0.1113).*

• Implication: Street likely to raise near-term revenue estimates given outperformance and expanding prescriber base/access. EPS revisions may reflect gross margin dynamics and elevated OpEx from launch and pipeline investments .

Key Takeaways for Investors

• Commercial ramp outperformed: first full quarter revenue nearly doubled consensus, with encouraging breadth of adoption, payer coverage >80%, and efficient time-to-fill—supports near-term revenue upward revisions .
• Quality of beat: High gross margin aided by pre-approval inventory accounting; monitor gross-to-net and inventory normalization effects on margins as volumes scale .
• Clinical catalysts cluster in next 2–3 quarters: RAMP 203 interim (Q4 25) and two 1H26 data events (VS-7375 interim; RAMP 205 update) provide multiple shots on goal for sentiment re-rating .
• Confirmatory risk managed: RAMP 301 modest upsize with timelines intact; fewer events suggest active disease control—maintain focus on 2026 outcomes and potential NCCN scope decisions .
• KRAS G12D asset differentiating: Early U.S. tolerability (no GI >G1 at 400/600 mg), visible activity, combo strategy initiated—positions VSTM for larger TAM beyond LGSOC if efficacy translates in PDAC/NSCLC/CRC .
• Balance sheet adequate into H2 2026; additional non-dilutive capacity via Oberland facility as milestones are achieved .
• Trading lens: Stock likely sensitive to monthly demand signals (prescriber adds/refills), NCCN scope decision timing, and interim clinical readouts; watch 4Q seasonality and any change in payer dynamics or inventory patterns .

---

Appendix: Additional Detail

Non-GAAP reconciliations and GAAP noise

• GAAP net loss $(98.5)M includes $(55.9)M unfavorable warrant liability fair value change; non-GAAP adjusted net loss $(39.4)M; Q2 showed the opposite effect with a favorable change .
• CFO: COGS low due to pre-approval inventory expensed previously; gross-to-net not guided, expected to be in-line with oncology small molecule norms .

Pipeline datapoints

• RAMP 205 DL1: cORR 83% (10/12) with chemo backbone; expansion cohort fully enrolled (29 pts); 1H26 update planned .
• GenFleet GFH375 data (China): PDAC ORR 41% (RP2D 600 mg QD; n=59 evaluable), DCR 96.7%, mPFS 5.52 months; NSCLC ORR 68.8% at 600 mg (n=16), DCR 93.8% (n=16) .

Footnote: *Values retrieved from S&P Global.