Verastem(VSTM) - 2022 Q4 - Annual Report

Financial Performance - As of December 31, 2022, the company had an accumulated deficit of $737.5 million and a net loss of $73.8 million for the year ended December 31, 2022[415]. - Total revenue for the year ended December 31, 2022, was $2.596 million, a decrease from $88.516 million in 2020[463]. - Product revenue, net was $0 for the years ended December 31, 2022 and 2021, compared to $15.232 million in 2020[463]. - The net loss for the year ended December 31, 2022, was $73.812 million, compared to a net loss of $71.200 million in 2021[463]. - The company had no product revenue recorded for the years ended December 31, 2022 and 2021, indicating a shift in revenue strategy[441]. - The company may incur losses for the foreseeable future and may never achieve or maintain profitability[496]. Research and Development - Research and development expenses for the year ended December 31, 2022, totaled $50.6 million, an increase from $39.3 million in 2021[429]. - Total research and development expenses included $22.4 million for the combination of avutometinib and defactinib in 2022, up from $17.0 million in 2021[429]. - Research and development expenses increased to $50.558 million in 2022 from $39.347 million in 2021[463]. - The company expects to incur significant expenses and may continue to experience operating losses due to ongoing research and development of its lead product candidates, avutometinib and defactinib[415]. - Avutometinib and defactinib are being investigated for various solid tumors, including low-grade serous ovarian cancer and non-small cell lung cancer[412]. - Research and development expenses increased to $50.6 million in 2022 from $39.3 million in 2021, with significant increases in drug substance costs and CRO costs[467]. Cash and Investments - Cash, cash equivalents, and investments as of December 31, 2022, were $87.9 million, with additional expected funding from a $30.0 million Series B Preferred Stock issuance and a $15.0 million debt drawdown[415]. - As of December 31, 2022, the company had $87.9 million in cash, cash equivalents, and investments[472]. - The company had cash, cash equivalents, and investments totaling $87.9 million as of December 31, 2022, down from $100.3 million in 2021[509]. - Net cash used in operating activities was $63.7 million in 2022, compared to $53.5 million in 2021, reflecting net losses adjusted for non-cash charges[475]. - Cash provided by investing activities in 2022 was $66.2 million, primarily from net maturities of investments[476]. - Financing activities generated $51.8 million in 2022, including $27.4 million from an at-the-market equity offering program[477]. Expenses - Selling, general and administrative expenses were $24.975 million in 2022, slightly up from $24.115 million in 2021[463]. - Selling, general and administrative expenses rose to $25.0 million in 2022, compared to $24.1 million in 2021, driven by higher commercial operations costs[468]. - Interest expense decreased significantly to $2.137 million in 2022 from $9.972 million in 2021[463]. - Interest expense decreased to $2.1 million in 2022 from $10.0 million in 2021, largely due to the conversion of 2020 Notes into common stock in July 2021[470]. - Interest income increased to $1.215 million in 2022 from $181,000 in 2021[463]. - Interest income for 2022 was $1.2 million, a significant increase from $0.2 million in 2021, primarily due to rising interest rates on debt securities[469]. Strategic Decisions - The company sold its exclusive worldwide license for duvelisib to Secura Bio, Inc., allowing it to focus on its lead product candidates[413]. - The company anticipates financing future development costs through existing cash, milestone payments, and potential strategic financing opportunities[418]. - The company expects to finance its cash needs through a combination of equity offerings, debt financings, and collaborations[500]. - The company entered into a loan agreement with Oxford for up to $150.0 million, with an initial term loan of $25.0 million funded at closing[478]. - The company has borrowed $25.0 million under a Loan Agreement, which bears interest at a floating rate subject to an overall floor and cap[511]. Impact of COVID-19 - The COVID-19 pandemic has impacted clinical trial operations, causing delays in startup activities and limiting new clinical trials[419]. - The company has adopted a hybrid work program for employees in response to the COVID-19 pandemic[419]. Assets and Liabilities - As of December 31, 2022, the company had a right-of-use asset of $1.8 million and lease liability of $2.3 million[461]. - As of December 31, 2022, the company had federal net operating loss carryforwards of $436.6 million and state net operating loss carryforwards of $203.3 million, available to reduce future taxable income[503]. - As of December 31, 2022, there was $0.3 million aggregate principal amount outstanding of 2018 Notes[495].