Verastem, Inc. VSTM has entered into an exclusive collaboration and license agreement with China's CSPC Pharmaceutical Group to develop and commercialize its newly approved drug, Copiktra (duvelisib), for treating different types of cancer indications in China.
Copiktra was approved by the FDA only earlier this week for treating relapsed or refractory chronic lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL) in adult patients, having received at least two prior therapies. The drug also received an accelerated approval as a monotherapy for addressing relapsed or refractory follicular lymphoma (FL) in adult patients, who has previously undergone at least two systemic therapies.
Shares of Verastem rallied 6.15% in after-hours trading following this Chinese deal. In fact, so far this year, the stock has skyrocketed 132.9% against the industry's decline of 2.7%.
Per the terms of the CSPC Pharmaceutical agreement, Verastem will receive an upfront payment of $15 million and also be eligible to get up to $30 million as development/sales-based milestone payments and double-digit royalties on potential sales in China.
CSPC will hold the exclusive rights to develop/commercialize and the product license for Copiktra in China. The Chinese firm will also have the right to collaborate with Verastem on certain development and clinical studies and will proportionally share the cost of the same.
Copiktra is an oral phosphoinositide 3-kinase (PI3K) inhibitor that targets the PI3K signaling pathway. The FDA approval came on priority review basis and before the scheduled action date of Oct 5, 2018 set by the regulatory body. Previously, the FDA had granted a Fast Track Designation to Copiktra for CLL/FL as well as an Orphan Drug Designation for CLL/SLL and FL. Following this approval, the drug was immediately available in the United States.
The approval of Copiktra will address an area of significant unmet need, especially for patients whose diseases have progressed following a couple of prior therapies and are left with limited treatment options.
However, the drug comes with a stern boxed warning against the serious side effects associated with its use such as fatal infections, diarrhea or colitis, skin eruptions, pneumonitis and other hazardous diseases. These adversities might result in dose reduction, treatment delay or ultimately discontinuation. The boxed warnings probably hurt investor sentiments which pulled the stock down on Tuesday after the FDA approval was made public on Monday.
Verastem, Inc. Price and Consensus
Verastem, Inc. Price and Consensus | Verastem, Inc. Quote
Zacks Rank & Stocks to Consider
Verastem currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the healthcare sector include Ligand Pharmaceuticals Inc. LGND , Cambrex Corp. CBM and Anika Therapeutics Inc. ANIK , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Ligand's earnings estimates have been revised 28.4% upward for 2018 and 6.5% for 2019 over the past 60 days. The stock has skyrocketed 97.7% so far this year.
Cambrex's earnings estimates have moved 3.5% north for 2018 and 2% for 2019 over the past 60 days. The stock has surged 36.8% year to date.
Anika's earnings estimates have been raised 17.3% for 2018 and 4.2% for 2019 over the past 60 days.
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