BOSTON - Verastem Oncology (NASDAQ:VSTM), a biopharmaceutical company engaged in the development of cancer treatments, has announced its plans to conduct an underwritten public offering of its common stock and warrants. The offering also includes pre-funded warrants in place of common stock for certain investors. Guggenheim Securities and Cantor are serving as joint book-running managers for the offering.
The offering's completion is contingent on market and other conditions, and no assurances can be provided regarding the final terms or the successful completion of the offering.
Verastem Oncology plans to allocate the net proceeds from this offering towards the potential launch of its drug candidates avutometinib and defactinib for the treatment of low-grade serous ovarian cancer (LGSOC). Moreover, funds will support ongoing clinical research and development, general corporate purposes, capital expenditures, and potential strategic acquisitions.
The securities described will be offered pursuant to a shelf registration statement filed with the Securities and Exchange Commission (SEC), which was declared effective on November 20, 2023. Prospective investors are encouraged to read the preliminary prospectus supplement, the accompanying base prospectus, and other relevant documents filed with the SEC before investing. These documents can be accessed through the SEC's EDGAR database.
Verastem Oncology's focus is on advancing treatments for RAS/MAPK-driven cancers, with a pipeline centered on small molecule drugs that inhibit pathways crucial for cancer cell survival and tumor growth.
The company has cautioned that the statements regarding its anticipated public offering are forward-looking and subject to various risks and uncertainties. These include the potential adverse effects on the market price of its common stock, capital market risks, and the impact of economic or industry conditions. Verastem Oncology has stated that there can be no guarantee of completing the proposed public offering on the anticipated terms, or at all.
This news article is based on a press release statement from Verastem Oncology and does not constitute an offer to sell or a solicitation of an offer to buy any securities.
In other recent news, Verastem Oncology has seen alterations in stock targets from RBC Capital Markets and BTIG due to recent developments. RBC Capital reduced Verastem's price target to $16 from $32 while maintaining an Outperform rating, following the initiation of a New Drug Application (NDA) submission for avutometinib/defactinib, a drug candidate for low-grade serous ovarian cancer (LGSOC).
Meanwhile, BTIG lowered their stock price target to $13.00 from $27.00, maintaining a Buy rating, after Verastem reported updated data from the RAMP 201 study evaluating avutometinib and defactinib's effectiveness.
In addition, Verastem Oncology has started a rolling submission for a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for avutometinib and defactinib, aimed at treating adult patients with recurrent KRAS mutant LGSOC. The company plans to complete the clinical module of the NDA in the second half of 2024.
Verastem also announced promising interim results from the ongoing RAMP 205 Phase 1/2 clinical trial for the treatment of metastatic pancreatic cancer. The company will present these initial findings at the American Society of Clinical Oncology (ASCO) Annual Meeting on June 1, 2024. The trial continues to evaluate additional dose and schedule regimens.
All these recent developments show a dynamic period for Verastem Oncology with multiple ongoing projects and adjustments to its financial outlook by analyst firms RBC Capital Markets and BTIG.
InvestingPro Insights
As Verastem Oncology (NASDAQ:VSTM) navigates the complexities of capital raising through its latest underwritten public offering, investors are closely monitoring the company's financial health and market performance. According to real-time data from InvestingPro, the company's Market Cap stands at a modest $91.68 million. The metrics also reveal a negative P/E Ratio of -0.83, reflecting challenges in profitability, and a Price to Book value of 3.63 as of Q1 2024, which can indicate investor expectations for future growth despite current losses.
InvestingPro Tips highlight that Verastem Oncology holds more cash than debt on its balance sheet, which is a positive sign for financial stability. Two analysts have revised their earnings upwards for the upcoming period, suggesting potential optimism about the company's future performance.
Still, it is important to note that the company has been quickly burning through cash and suffers from weak gross profit margins. Furthermore, analysts do not anticipate the company will be profitable this year, and the stock has experienced significant price volatility.
For investors considering the potential risks and rewards of Verastem Oncology's stock, these insights can be crucial. There are 12 additional InvestingPro Tips available, which could provide deeper analysis and guidance. To access these tips, investors can visit https://www.investing.com/pro/VSTM and use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, offering a comprehensive view of the company's financial standing and market expectations.
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