Verastem’s Breakthrough FDA Approval and Market Potential for KRAS Mutant LGSOC Therapy

In a report released today, Kelly Shi from Jefferies maintained a Buy rating on Verastem (VSTM – Research Report), with a price target of $19.00.

Kelly Shi has given his Buy rating due to a combination of factors surrounding Verastem’s recent FDA approval. The company received accelerated approval for its avutometinib and defactinib combination therapy for treating recurrent KRAS mutant low-grade serous ovarian cancer (LGSOC), marking it as the first approved treatment for this rare cancer type. This approval has been met with strong enthusiasm from physicians, who anticipate significant adoption due to the therapy’s superior progression-free survival rates compared to existing treatments and its favorable safety profile.
Furthermore, Verastem is poised to capture a substantial market opportunity, estimated at $402 million in the U.S. alone for KRAS mutant LGSOC. Although the approval does not currently extend to KRAS wild-type LGSOC, there is potential for future expansion into this segment, especially with the ongoing Phase 3 trials and potential inclusion in NCCN guidelines. Additionally, there are regulatory pathways being explored for approvals outside the U.S., which could further enhance Verastem’s market presence and revenue potential.

According to TipRanks, Shi is an analyst with an average return of -3.8% and a 36.22% success rate. Shi covers the Healthcare sector, focusing on stocks such as Summit Therapeutics, Legend Biotech, and Incyte.

In another report released on April 29, Mizuho Securities also reiterated a Buy rating on the stock with a $8.00 price target.