Verastem(VSTM) - 2024 Q4 - Annual Report

Financial Performance - As of December 31, 2024, the company reported an accumulated deficit of $955.5 million and a net loss of $130.6 million for the year[492]. - Total revenue for the year ended December 31, 2024, was $10.0 million, a significant increase from $2.6 million in 2022, primarily due to the sale of the COPIKTRA license[524]. - The net loss for the year ended December 31, 2024, was $130.6 million, compared to a net loss of $87.4 million in 2023[524]. - Operating activities used $104.8 million in cash during 2024, compared to $86.5 million in 2023, primarily due to net losses adjusted for non-cash items[536]. - Interest income decreased to $4.1 million in 2024 from $6.2 million in 2023, attributed to lower interest rates and investment balances[529]. Research and Development - Research and development expenses totaled $81.3 million for the year ended December 31, 2024, an increase from $61.4 million in 2023[498]. - The company invested $25.1 million in the development of avutometinib and defactinib for LGSOC in 2024, up from $13.4 million in 2023[498]. - The total research and development expense for 2024 reflects a significant increase in costs associated with clinical trials and product development activities[499]. - Research and development expenses increased to $81.3 million in 2024 from $61.4 million in 2023, driven by higher costs in CROs, investigator fees, and consulting[526]. Cash and Investments - Cash, cash equivalents, and investments stood at $88.8 million as of December 31, 2024[492]. - Cash provided by investing activities in 2024 was $60.0 million, primarily from net maturities of investments[537]. - Cash provided by financing activities for the 2024 Period was $53.8 million, primarily from the issuance of common stock and warrants[538]. - Cash provided by financing activities for the 2023 Period was $91.4 million from a public offering of common stock and pre-funded warrants[538]. - As of December 31, 2024, the company had cash, cash equivalents, and investments totaling $88.8 million, down from $137.1 million in 2023[556]. Regulatory and Operational Concerns - The company anticipates continued operating losses due to the lack of regulatory approval for its product candidates[492]. - The company has not yet achieved regulatory approval for any product candidates, raising substantial doubt about its ability to continue as a going concern[492]. - The company anticipates continued operating losses and significant expenses in the foreseeable future[542]. Financing and Capital Structure - Future financing may include potential milestones and royalties from the Secura APA, collaboration agreements, or equity offerings[493]. - The company has raised capital through various means, including public and private stock offerings and collaboration agreements[491]. - The company has borrowed $40.0 million under a Loan Agreement, with interest rates subject to fluctuations based on market conditions[558]. - A 10% increase in current interest rates would have resulted in an immaterial increase in cash interest expense due to the interest rate floor and cap[558]. Tax and Valuation - As of December 31, 2024, the company had federal and state NOL carryforwards of $370.6 million and $56.7 million, respectively[551]. - The company recorded a 100% valuation allowance against its NOL and tax credit carryforwards, indicating uncertainty about realizing tax benefits[551]. Future Commitments - The company expects to spend approximately $60.0 million under the IQVIA Master Services Agreement over the next three to four years[549]. - The company has committed to spend on commercialization strategies for product candidates expected to launch in mid-2025[549]. Other Financial Metrics - The change in fair value of preferred stock tranche liability was related to the Series B Convertible Preferred Stock Securities Purchase Agreement, which expired in July 2024[507]. - The change in fair value of preferred stock tranche liability resulted in $4.2 million income for 2024, compared to $2.8 million in 2023[531]. - The change in fair value of warrant liability was an expense of $19.1 million in 2024, reflecting an increase in the value of liability classified warrants[532]. - Selling, general and administrative expenses rose to $43.6 million in 2024, up from $30.7 million in 2023, mainly due to increased personnel costs and expenses related to the anticipated launch of new products[527].