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Thank you for standing by. My name is Rebecca, and I will be your conference operator today. At this time, I would like to welcome everyone to the Verastem Oncology Second Quarter 2025 Financial Results Conference Call. [Operator Instructions] Thank you. I will now turn the call over to Julissa Viana, Vice President, Corporate Communications, Investor Relations Patient Advocacy. Please go ahead.

Thank you, operator. Welcome, everyone, and thank you for joining us today to discuss Verastem's second quarter 2025 financial results and recent business updates. Earlier today, we issued a press release detailing our financial results for the second quarter of 2025. This release, along with a slide presentation that we will reference during our call today are available on our website. Before we begin, I would like to remind you that any statements made during this call are not historical and are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the Risk Factors section of the company's most recent annual report on Form 10-K filed with the SEC on March 2, 2025, and the current report on Form 10-Q filed today as well as other reports filed with the SEC. Any forward-looking statements we make represent Verastem's views as of today, and we disclaim any obligation or responsibility to update. Joining me on today's call are Dan Paterson, President and Chief Executive Officer of Verastem, who will provide opening remarks and recap key highlights from the quarter. Matt Ros, Chief Operating Officer; and Mike Crowther, Chief Commercial Officer, who will walk through the initial progress of the AVMAPKI FAK

Thanks, Julissa. Good afternoon, everyone, and thank you for joining us on today's call. We're pleased to report that we delivered exceptional results in the first half of 2025, highlighted by a particularly transformative second quarter. Our team achieved several significant milestones that position us for sustained long-term growth. We secured FDA approval for our lead program ahead of schedule and successfully launched AVMAPKI FAK

Thank you, Dan. The entire team is proud to bring this novel and breakthrough therapy to people living with KRAS-mutated recurrent LGSOC, and we are encouraged by our early launch progress. This therapy addresses a critical need in LGSOC as patients face poor response rates to chemotherapy and hormone therapy, which results in high recurrence rates, creating an urgent need for more effective treatment options. As the first-ever treatment approved specifically for KRAS-mutated recurrent LGSOC, we can make a real difference in patients' lives. Our launch strategy focuses on 3 key areas. First, we want to reach all health care providers. We are effectively targeting both academic and community-based physicians. Our experienced field and marketing teams are executing at a high level, ensuring health care providers understand unique benefits and how to safely used AVMAPKI FAK

Thanks, Matt. It's a pleasure to be on the call today and provide some further details on the launch of the AVMAPKI FAK

Thank you, Mike. Since we issued the press release before the call today with the full financial results, I will focus on the highlights as shown on the next slide. We performed well in our initial quarter of launch, and I am pleased to report $2.1 million in net product revenue for the first 6 weeks -- 6 weeks of the launch. Cost of sales were $0.4 million for the second quarter of 2025 versus 0 in the second quarter of 2024. Cost of sales did not include a significant amount of product costs as inventory produced prior to FDA approval was fully expensed at the time of production. Research and development expense were $24.8 million for the second quarter of 2025 compared to $18.1 million for the second quarter of 2024. The increase was primarily driven by higher clinical-related expenses to support the global Phase III RAMP 301 trial, higher gross production activities in preparation for the launch and higher costs associated with drug product and start-up activities related to the VS-7375 Phase I/IIa clinical trial in the U.S. Selling, general and administrative expenses, or SG&A, were $2.7 million for the second quarter of 2025 compared to $10.2 million for the second quarter of 2024. The increases primarily driven by commercial readiness activities in operations, including personnel- related costs in preparation of the approval. With that being said, we continue to be prudent in our expense management. For the second quarter of 2025, non-GAAP adjusted net loss was $41.4 million or $0.63 per share diluted compared to non-GAAP adjusted net loss of $16.5 million or $0.61 per share diluted for the 2024 quarter. Please see our press release for a reconciliation of GAAP to non-GAAP measures. Moving to the balance sheet. We strengthened our financial position in April with a $75 million private placement, which included issuance of common stock and prefunded warrants. We ended the second quarter of 2025 with cash, cash equivalents and investments of $164.3 million. We believe our current cash, combined with future revenues from AVMAPKI FAK

Thanks, Dan. Before we open the call to Q&A, I'll share a few final remarks to close out today's presentation. It's been a strong first half of the year for Verastem and we've delivered on all of our milestones and are off to a great start with the commercial launch. We're in a strong position to continue executing against our plans. For the second half of the year, some of our milestones include: continuing to report on the launch of AVMAPKI FAK

[Operator Instructions]. Your first question comes from the line of Michael Schmidt with Guggenheim.

This is Paul on for Michael. So just on the LGSOC launch, can you talk about the degree of off-label use that you're currently seeing in the KRAS wild type setting? What the feedback has been from providers on continued use in this setting? And then what you expect in terms of prescribing and reimbursement trends leading up to the possible NCCN guideline update in October and how that could reflect once the decision is made on including the full data set?

Sure. Thanks for the question. This is Matt. While we don't promote any off-label uses, of course, based on the current label, we have seen utilization in both the label population as well as in the wild type population. Reimbursement for the patient populations that we just spoke of have not been an issue to date, and we'll continue to follow the reimbursement patterns as we move forward into the third quarter, leading up to NCCN.

Great. And then I have a follow-up on the KRAS program. So it seems like the U.S. study is enrolling fairly well. Can you just talk about the scope of that update in the fourth quarter? Will it be roughly the same number of patients in lung and PDAC as the initial China study update at ASCO? And also, could we expect any additional updates from GenFleet from that China study at some point?

Sure. Thanks for the question. This is Dan. We would expect the magnitude of the update that we'll give to be roughly equivalent to what we saw in the Chinese data at ASCO. GenFleet has advised that they will be presenting additional data at 2 different medical meetings later this year. So you should expect 2 updates from GenFleet and then we'll give an initial update on our Phase I experience in the U.S. likely late this year on the safety side, and there's a lot of interest in that and then the efficacy early next year.

Your next question comes from the line of Kelly Shi with Jefferies.

This is Anqi Yu for Kelly Shi. Congrats for the quarter. Our question is what are the key indicators you're tracking to gauge the launch performance? And how should we interpret those in terms of launch momentum in the back half of the year? And what could be the key drivers there?

Yes. Yes, it's early in the launch. And as Matt had mentioned earlier, we launched with the 2 specialty pharmacies in place. We've now brought on the specialty distributors and the GPOs. And so we're just starting to track the breadth of data that we're able to get. I'll let Matt comment a little more on kind of where we go from here, but part of it is really starting to see the patterns we see and see what we think is repeatable and reliable and that will then inform kind of what we're going to be tracking. But Matt, I don't know if you want to add?

Yes. No. I mean, Dan is absolutely right on that. I mean we mentioned on the call the importance of the 3 strategic imperatives around engagement with the health care community, ensuring that patient access continues to be seamless and that we're working closely with the patient population. So you can expect over time and once we see the appropriate trends that they're reporting on our performance will be anchored against those 3 imperatives.

Your next question comes from Pete Stavropoulos with Cantor Fitzgerald.

Congratulations on the quarter, first one, in terms of prescribers, do you have a sense if these are physicians you were targeting? What is the split between centers of excellence and community setting? And can you provide some color on how this traction sort of compares to your expectations?

Yes, I'll start, and then I'll hand it over to Mike. I would say probably exceeds our expectations. We had a lot of inbound, and I know Mike, on the sales force doesn't like to hear this, but we actually had prescriptions from people who haven't been called on yet. But we did -- it was a nice mix of the high priority sites and really ones that we hadn't expected. And we actually have a couple of physicians that have had multiple prescriptions that weren't on our high priority list. And so the team is working really hard with the larger centers to really compile lists of patients. I've said a number of times, as we've been asked, we'll be the -- is there going to be a huge bolus of patients that are just sitting out there. The nature of this disease is they need to be treated. And so -- and we wouldn't advise anything different, by the way. If you're on a therapy and it's okay, this is a marathon, not a sprint. And the best thing for the patients is to stay on what you're on, as long as you can tolerate it, and as long as the cancer isn't advancing. And at the point in time, either of those things happen, then there's a conversation with the physician. And based on our market research and what we're seeing so far, that is what's happening. They come in, they talk and we've been told we're the most likely thing they'll go on next. And so it's probably too early to give numbers on the actual breakdown, but we are seeing the majority of scripts, I would say, are from gyne oncs, and that's not a surprise. The big volume would go to them. We are seeing it from med oncs. And it's rolling out kind of as we expected, qualitatively, quantitatively, I'd say, a little ahead of where we thought we would be. I don't know if Mike, if you have or want to say anything else.

I'll just provide a little bit more color and thank you for the question. You can imagine we're very encouraged by the breadth of the initial uptake. We've certainly seen a lot of business from the top 1 and 2 tier customers that represent about 50% of the potential but obviously, about 50% to manage more broadly across the reach. And we've seen encouraging uptake outside those from both community and academic physicians. We've obviously got a very focused field strategy, and we're going to continue broadening the reach of that in Q3. But we do now expect the business to continue evolving because we put in place those critical GPO agreements and FT contracts as well. So I think, overall, we're not surprised by the business from our center accounts, but we're very encouraged by the spontaneous use that were rising from those accounts, which we're supporting through our digital outreach and surround sound activities as well.

And an important point that Mike just made, because the approval came almost 2 months early, there were certain things we could accelerate. We hired the sales force. We were ready to go with our specialty pharma -- pharmacies. We wanted to make sure that in the early days of the launch, this was very high touch. And so this is all through specialty pharmas. Now we're bringing on the specialty distributors that are aligned with the GPOs. I think part of our strategy to reach the physicians in those large practices is not to spend a lot of effort trying to go one-on-one to those physicians because, frankly, those practices don't like sales reps anyway. It's really the educational programs through the GPOs that we're just bringing online now. So we have no impact of that whatsoever in the first quarter. And so I really feel like we're going into the second half of the year with kind of all of our sales up, the winds at our back, and we'll start to see the effect of everything that we were planning to bring to bear for the launch.

Just one more question. Just curious to know what your experience has been with payers. Any pushback or perhaps you're still in the honeymoon phase with them? Any thoughts around that would be great.

Yes. I would say my market access people tell me that there's always a honeymoon phase at the beginning. Now having said that, we're not exactly Wegovy, and I don't expect then there'll be a massive pushback from payers because frankly, we have the data package to support reimbursement. And so -- and this is kudos to our specialty pharmacies to date, they've done a phenomenal job, and we've seen reimbursement both with mutants, with wild-type, with totally off-label uses, which, again, we wouldn't promote, but we're finding that data really supports the usage of these drugs. And so far, so good, we're seeing it's prior off, of course, Medicare, in particular, in that first 90 days, you get the first denial and then you have to put the appeal in, but we're seeing very short periods of time indicated by the fact that we're giving away very little free drug. We're not discounting. And I would say the most impactful program to date has been our $0 copay because we are committed to minimizing the burden on patients, and we are making sure that patients don't have to pay a lot out of pocket for this. That's obviously on the commercial side. The benefit of IRA on the Medicare side is those patients are now capped at $2,000 out-of-pocket total cost. So that should have minimal impact. So early days, so far, so good. We're hoping to continue that and looking forward to a great second half of the year.

Your next question comes from the line of Leonid Timashev with RBC Capital Markets.

RBC Capital Markets, Research Division It's Anish on for Leo. Congrats on the progress this quarter. Just a couple from us. First, how might the launch curve for AVFAK evolve as you switch over from specialty pharmacies to the integration of the specialty distributors you mentioned? And second, even though it's early, it would be great to get a sense on the breakdowns of AVFAK patient history based on lines of care and recurrence, if you could share some color there.

Sure. I would say, in general, I really feel like because this came early, we didn't have the publications, and we had -- part of our distribution network in place. That first 6 weeks, we kind of have in -- hand tied behind our back. And I really do feel like a lot of the prework we've done, we've been out doing outreach with our MSLs for the last 2-plus years. I think when we have the full complement in place, we really should see an acceleration. Again, I don't think there's a huge bolus of patients sitting there. This will be a steady uptick. What we will start to see is the benefit of the long duration of therapy. And we would expect over time that you're going to see a big group of patients who are continuing patients and then adding more on every month. And as far as the mix, I don't know, Matt, if you want to say anything or Mike.

Yes. No --

A little early, but --

Yes, it's a little early. We're following it as closely as you might expect us to be doing. We've seen a mix of patients with multiple lines of prior therapy, but also encouragingly, we've seen patients that have the combination right at their first recurrence, which is quite consistent with our market research that was conducted in the prelaunch setting and remarkably consistent with what we observed in RAMP 201. So the dynamics of 201 and what we've seen in our market research, as I just shared, is lining up, and it's been very consistent within the 6 first weeks of the quarter, and we're seeing those trends continue into the third.

Yes. And there have been a couple of KOLs who expressed the interest in us wanting to go to front line, and we started an investigator-sponsored trial in frontline combination with AI, we're looking into kind of more substantial programs there. Obviously, keeping an eye on cost, but there's great enthusiasm around the drug combination, and we want to continue to build on that.

Your next question comes to the line of Graig Suvannavejh with Mizuho.

Congratulations on the launch so far. I wanted to ask 2 questions, if I could. First, just on the launch. Can you just remind us, even though there was a question already on kind of how you think the uptake curve could look like, could you just remember -- remind us of your commercial efforts in terms of sizing, how you expect that may or may not evolve over time? And then secondly -- and with that, if you could comment on the role of IQVIA in that? And then secondly, on the NCCN guideline potential and inclusion in the meeting October. Could you maybe provide some color for me at least as to typically, what types of considerations go into the committee that reviews the stuff? Are there certain criteria that they need to see? I guess what I'm trying to get is trying to get a sense of how we should think about the level of confidence that you will get inclusion, although I think most people think that you will, but any color there would be great.

Yes. Why don't I start with the NCCN one and then Mike, I'll turn it over to you. I mean, they look at the totality of the data. And if you look at the publications, I think anyone who's looked at the publications feels that these patients benefit. And as much as I would have liked, we got the 2a on the label right away, and that was kind of administrative e-mail back and forth. As much as I would have liked the other parts sooner, I think it's important to understand that in these committees, not everyone is an LGSOC expert. They're ovarian experts, but there's a handful of the LGSOC experts that are on the committee. And I think having them in a room together with our publication to advocate is our best chance of getting it done. And we -- and heard universally that there's the belief that this benefits patients broadly and we think that would factor into the decision, although nothing is guaranteed and we're not going to be in the room. It's not like an FDA meeting where we get to go and advocate for ourselves. We're relying on the LGSOC experts to advocate for us at those ...

And to address the shape of the curve and the evolution of the launch, I think we're -- as we said, we're very encouraged by the strength of the start and we continue to believe that we'll continue to see steady progression because this is not a switch market where we anticipate seeing a large bolus of patients. Obviously, bringing the SDs and the GPOs online for the Q3 and Q4 and putting these additional programs in place that Dan spoke to, I think, will continue to give us increasing breadth and opportunity to push on that. In terms of the evolution of our commercial organization, we held the premise that we will focus very heavily through our field teams on the top 100 accounts, and we've seen such positive results from that. I don't see any initial reason to adjust that strategy. We will keep a weather eye to make sure that the reach and frequency is what we'd expect. And then obviously, we're supporting that through the digital programming and the GPO programming, again, Dan spoke to for the other 50% of patients to those large community practices. And we also obviously have a very strong medical team. We'll continue to engage in medical meetings and others to cash those customers increase our frequency of connection with those customers.

And as for the IQVIA relationship, a small biotech launching a drug the ability to be able to tap into these world-class resources in an era where digital matters, data matters, we never could have gotten data warehouse and all the infrastructure up early without a partner like IQVIA that was tapping into infrastructure they had essentially customizing stuff for our business rules, but not building from scratch. And so we've been very pleased with that relationship. They worked nights and weekends like our team and beside our team as we were getting ready to do this. And that's the way -- the reason we were able to pull this off.

Your next question comes from the line of Justin

Congrats on the successful launch thus far. So given your use of specialty pharmacy, can we assume the $2.1 million in Q2 revenue largely reflects treatment demand with internal channel stocking? And can you just talk about expectation of any inventory channel stocking moving forward? And if you could share any early insights on gross to net dynamics or how the payer mix is shaping up between commercial and Medicare?

Sure. I'll take part of that, and then I'll hand it over to Dan C. So thank you for the question. I'm surprised we did it earlier. Because it was just 2 SPs, there was minimal stocking. We've been pretty adamant in our agreements we get to limit the inventory. We want to make sure that we don't have any surprises with returns and things like that. And so we're keeping tight control. I will tell you each of the SPs has been restocked a number of times, and that just shows that the inventory is going out the door. This isn't a bunch of inventory sitting on shelves. Dan, I'll let you speak to gross to net.

Yes. So thanks, Justin. Obviously, it's early in the launch, and we're getting everything up and running. So we've been given the specifics on the gross finance and when that will be going forward. But I think as we move forward, you look at other oncology, small molecule, therapeutics. I think typically, it's around 15% to 20%, which is not a bad expectation. So we'll continue to monitor that, but we're not giving the specific guidance or details on that at this point.

Any follow-ons? Or are we going to move to the next question?

Your next question comes from the line of Sean Lee with H.C. Wright.

Congrats on a quarter. And I just have 2 quick questions. First, you mentioned that most of these patients are sitting on once they progress from the prior therapy. So I was wondering, have you noticed any multiple differences between these patients versus what patients you've had in the clinical study?

No. I think as Matt said earlier, it aligns pretty well with what we saw in the study and the RAMP 201 study, we had patients from 1 to 10 prior lines of therapy, and we are seeing a mix of patients who had multiple prior lines as well as ones that are coming right off their first relapse. And they typically come off therapy for 2 reasons, either progression or they can't tolerate their existing therapy. And again, that's consistent with what we saw with the patients that went on RAMP 201.

Great. My last question is on the 7375 study. So I was wondering what -- how quickly do you expect to move on to specific indications because GenFleet has quite a bit of safety data to back it up.

Yes. No, it's a good question. So the reason we were able to start the trial at 400 milligrams, which is clearly right in an effective range is we included the Chinese data in our IND. And so that probably cut I don't know, 6 to 9 months off the time frame because we didn't have to start back at the lower doses. So we intend to move very quickly. What we're finding is there are a lot of these patients out there. And the sites we've chosen not only have a lot of patients, but they're very experienced investigators. Refining, we opened a cohort, the cohort gets filled. And so we're going to move very quickly. Once we get to the 600-milligram dose, we're going to start the cetuximab combo early. And again, that, I think, was benefited from having some human clinical data in the IND and allowing us to really short circuit a lot of this -- and so we intend to move very quickly. We believe that we have a best-in-class drug. We're excited to be able to get data out as soon as possible. There will be additional data from the GenFleet experience at least 2 meetings later this year. So we're looking forward to getting a lot more out there to really back up what we've been saying about the drug.

Your question comes from the line of [indiscernible] with B. Riley Securities.

Congrats on this initial commercial ramp up. When we think about modeling for 3Q and 4Q should the free sample play an important role in this initial ramp-up and in the 2Q, you know how many free samples were used by patients.

To be clear, there aren't free samples as a means of bridging until insurance gets approved. We can give a month supply. I mentioned a little earlier, there's been almost none. It's been very little -- and really, the program that we've used the most is really the co-pay assistance, and we're happy to do that.

Got it. I think you already touched on this, but if the co-pay is covered by commercial influence and Medicare what do you expect the monthly out-of-pocket cost will be for the patients in these 2 players?

I think for the majority of patients, it's 0. We have a very liberal program to support the patients. And that's for commercial patients. With the Medicare patients, again, they have the yearly out-of-pocket limit for all medical costs, and that kicks in for a cancer patient like the first month.

Your final question comes from the line of James Molloy with Alliance Global Partners.

Matt on for Jim tonight. Congrats on the progress. So first, on the launch, I wanted to touch on how many reps are currently on board for the sales force and how many total planned reps you guys might add just for the launch in the KRAS mutated population, if you can go into that? And then as well what the time line might look like for the regulatory pathway for AVMAPKI FAK

I'll let you take the first part, Mike, and then I'll address in Japan.

We launched with a very focused team of 16 individuals. And as I have mentioned in earlier comments, we will keep a very close eye on that. We currently have no plans to increase beyond that.

And then we haven't given specific guidance on Japan and the EU, have said is we're doing a small bridging study in Japan that will -- it's actually ramping up accrual now, and we intend to engage with the PMDA and see conditional approval based on the bridging study, and we are already switching the sites in Japan over to be participants in 301, and we'll put enough patients on Japan, so we'll be able to get full approval. But to be clear, you get full reimbursement in Japan based on conditional approval. We haven't given specific guidance on the EU. We have engaged. We recently got orphan drug designation which we think is an important part -- the step and part of what we went through here in the U.S. to make sure it's recognized as a distinct disease. And then we'll be seeking formal scientific guidance on whether we can get approval based on RAMP 201 or whether we're going to need the randomized confirmatory study to get approval with everything going on with MSN and the unclearness around that, I'm not sure that rushing towards that is really something that we want to do anyway. We want to make it available to patients in Europe. But I do believe that even if we are able to get regulatory approval on the single-arm study, most reimbursement in Europe will require the randomized study.