Verastem, Inc. (VSTM) Earnings

Management highlights

### Commercial Progress for COPAC - Delivered meaningful quarter-over-quarter revenue growth after earlier launch adjustments, with momentum continuing into Q3 2026 - Three core commercial priorities are driving consistent new patient demand, expanding use earlier in the treatment journey, and supporting patients to stay on therapy longer; all three priorities saw encouraging progress in Q2 - Added meaningful numbers of first-time prescribers and new accounts across both academic and community gynecologic oncology practices, with early successful patient identification programs in community practices to be expanded in Q3 - Observed a clear shift to earlier treatment initiation at first/next recurrence (from the earlier trend of heavily pretreated late-line patients), aligning outcomes with the prior RAMP201 trial results - Refill consistency improved as the active patient pool grows, indicating longer patient retention on therapy; reimbursement is not a barrier to access - The LGSOC commercial business is on track to become self-sustaining by the end of 2026, with COPAC revenue expected to fully cover commercial operations and the existing Avudametnib + Defactinib development franchise ### Pipeline Progress for VS-7375 (KRAS G12D inhibitor) - VS-7375 is designed to target KRAS G12D-driven cancers with improved tolerability compared to existing and competing agents, addressing unmet need for ~60,000 annual U.S. patients - Completed target enrollment in dose expansion cohorts for the Phase 1-2 TARGET-D-101 study across pancreatic, colorectal, and non-small cell lung cancer (NSCLC) indications - Received FDA Fast Track designation for VS-7375 in NSCLC - Initiated all three planned Phase II registration-directed studies, with the first patients already dosed in each trial; these studies support the potential for accelerated approval and set the stage for future frontline Phase III trials - A comprehensive data update for VS-7375, including response rates across the three lead tumor types and an early look at response durability, is scheduled for October 2026 ### Financial and Operational Updates - Strengthened the balance sheet via non-dilutive financing: a royalty agreement with Oberlin Capital provides up to $75 million in funding, with $50 million expected to be drawn at closing, combined with the $15 million Securibio milestone to add $65 million in incremental cash - Pro forma cash, cash equivalents and investments totaled $201.4 million at the end of Q2 2026, which is sufficient to fund operations into the second half of 2027 - R&D expenses were $41.3 million in Q2 2026, increasing as expected from Q1 2026 to support VS-7375 clinical trial activities and drug supply - SG&A expenses were $27.4 million in Q2 2026, flat sequentially, with management expecting quarterly SG&A to remain consistent through 2026 amid disciplined cost management - Non-GAAP adjusted net loss was $30.6 million ($0.31 per diluted share) in Q2 2026, compared to a $41.3 million ($0.62 per diluted share) loss in Q2 2025

Guidance

- The LGSOC commercial business will become self-sustaining by the end of 2026, maintained from prior guidance - Current pro forma cash position is sufficient to fund operations into the second half of 2027, reaching key value inflection points before requiring additional capital, maintained - SG&A expenses are expected to remain roughly consistent on a quarterly basis through 2026, maintained - A comprehensive VS-7375 data update, including response rates for ~20 patients per lead tumor type and early durability data, will be released in October 2026, reaffirmed - Gross margin levels seen in recent quarters are expected to continue as the run rate going forward, no change from prior expectations - Three Phase III frontline trials for VS-7375 are expected to be initiated after completion of the ongoing Phase II registration-directed studies, maintained

Segment performance

Veristem Oncology has one core commercial product segment: AvMapKey Faxinja Copac (COPAC), a treatment for low-grade serous ovarian cancer (LGSOC). In Q2 2026, COPAC generated net product revenue of $25.1 million, with $3.8 million in cost of goods sold. Additional segment revenue includes $15 million in milestone license revenue from Securibio, triggered when Copectra cumulative worldwide net sales surpassed $200 million. COPAC represents 100% of the firm's commercial product revenue, contributing 62.6% of total Q2 2026 revenue (the remaining 37.4% comes from the Securibio milestone). No other product segments are reported.

Risks & headwinds

- Forward-looking statements around clinical progress, revenue growth, and self-sufficiency are inherently uncertain, and actual results may differ materially due to unforeseen clinical, regulatory, or commercial factors - Partnership discussions for VS-7375 may not result in favorable terms or completed agreements, and rushing a deal could undervalue the program while delaying a deal could slow development progress - Clinical trial outcomes may not meet the 30% overall response rate / 6-month durability bar expected for FDA accelerated approval, or may not demonstrate superior efficacy or tolerability relative to competing G12D and PanRAS inhibitors - The translatability of preliminary VS-7375 activity data from the GenFleet China study to U.S. patient populations is not guaranteed, due to known differences in disease behavior and management - Additional capital will be required after the second half of 2027, and unfavorable market conditions could result in dilutive financing or limited access to capital at attractive terms

Analyst Q&A

• Q: What is the current status of partnership discussions for VS-7375, and what is the company's strategy for timing a potential deal? /

  A: Work continues on the planned collaboration with ARASCA, with details on trial design and role division still being finalized. The company has received considerable inbound interest from strategic partners, with upcoming VS-7375 data in October expected to spur additional interest. Management notes partnership value increases over time, but earlier partnerships can accelerate development, so the new non-dilutive funding gives the company flexibility to avoid rushing a deal or a dilutive equity financing at the current stock price.

• Q: Is the 30% ORR / 6-month durability bar for accelerated approval of VS-7375 still the appropriate benchmark across all three indications, even with a changing competitive landscape? /

  A: 30% ORR and 6-month durability remain a good general guidepost; recent FDA accelerated approval of a melanoma drug with a 24% ORR supports that this bar is reasonable. Management emphasized that accelerated approval considers the totality of data, including safety and tolerability, which is a key differentiator for VS-7375 compared to competing agents with more severe toxicities like extensive rash and mucositis.

• Q: What factors drove COPAC's strong Q2 revenue growth, and how are new patient starts and therapy duration trending? /

  A: Growth was driven by both increases in new patient starts and improved therapy duration, aligned with the company's three core commercial priorities. The quarter saw a meaningful increase in new prescribers and new accounts, with consistent new patient start volume, and improved refill consistency as a result of focused work on supporting patients and managing adverse events to keep patients on therapy longer.

• Q: How does Veristem plan to differentiate VS-7375 from other G12D and PanRAS inhibitors in the market? /

  A: Versistem differentiates VS-737777777777777777775 through both efficacy and tolerability. Unlike many competing agents, VS-7375 plasma concentration continues to increase with dose escalation, allowing harder target hitting that the company expects will deliver deeper, more durable responses. VS-7375 also has a much more favorable tolerability profile: it has no rash or mucositis common with PanRAS inhibitors, and GI side effects are mild and do not increase with higher doses, making it easier for patients to tolerate long-term.