Shares of Verastem (NASDAQ:VSTM) jumped by as much as 11% this morning after the company reported second-quarter earnings and announced a deal to sell development rights to a drug. The stock gave up those gains and closed breakeven for the day.
Revenue in the second quarter was $4.3 million, which resulted in an adjusted net loss of $20.5 million, or $0.12 per share. The developmental biotech company finished the quarter with $160.8 million in cash. Verastem also said it had entered into a definitive agreement to sell its global commercial and development rights to COPIKTRA (duvelisib) to Secura Bio in a deal worth up to $311 million. That transaction includes an up-front payment of $70 million, with additional possible payouts if Secura Bio can achieve various regulatory and sales milestones.
"The first half of 2020 has been a time of transformational change at Verastem Oncology," CEO Brian Stuglik said in a statement. "We recently announced our newest strategic transaction, the sale of COPIKTRA to Secura Bio, which allows us to monetize this asset while focusing our resources and efforts on advancing the VS-6766 and defactinib combination program in KRAS mutant solid tumors."
The deal with Secura Bio is expected to close during the third quarter and will provide Verastem with enough cash to fund its programs for VS-6766 and defactinib through 2024. Operating expenses in 2020 are expected to be in the range of $80 million to $90 million, or about 40% lower than in 2019. Starting in 2021, the company forecasts annual operating expenses of roughly $50 million.