Verastem Oncology to Report Q1 Earnings: What's in the Cards?

We expect investors to focus on Verastem Oncology’s VSTM progress with the development of its pipeline candidates being studied for various cancer indications when it reports first-quarter 2025 earnings.

The company currently does not have a marketed drug in its portfolio, as a result, we do not expect it to record revenues during the upcoming quarter. The Zacks Consensus Estimate for loss per share in first-quarter 2025 is pegged at 71 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar)

Factors Shaping VSTM's Upcoming Results

With no approved/marketed product in its portfolio, the focus of the first-quarter investor call will be on updates related to Verastem’s progress with the development of its avutometinib/defactinib combo therapy. Avutometinib is an RAF/MEK clamp, while defactinib is a best-in-class selective FAK inhibitor.

A new drug application (NDA) seeking approval of the company’s novel combination regimen of avutometinib plus defactinib for treating KRAS mutant recurrent low-grade serous ovarian cancer (LGSOC), a rare and distinct type of ovarian cancer, is under priority review in the United States. The FDA’s decision on the NDA is expected on June 30, 2025.

If approved, the avutometinib/defactinib regimen will become the first-ever FDA-approved treatment specifically for adults with recurrent KRAS mutant LGSOC. VSTM is preparing for a potential commercial launch of the combo therapy in the United States in mid-2025.

The company is also evaluating avutometinib plus defactinib in combination studies in first-line metastatic pancreatic cancer as well as non-small cell lung cancer in early to mid-stage studies.

Year to date, shares of Verastem have rallied 20.1% against the industry’s decline of 8.4%.

During the first quarter of 2025, the company filed an investigational new drug (IND) application to begin clinical studies on its recently licensed KRAS G12D (ON/OFF) inhibitor.

Verastem expects to initiate a phase I/IIa study evaluating VS-7375 in advanced solid tumors by mid-2025.

Activities related to the development of pipeline candidates are most likely to have escalated Verastem’s operating expenses in the to-be-reported quarter.

Earnings Whispers

Our proven model does not predict an earnings beat for Verastem this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Verastem has an Earnings ESP of -6.34% as the Most Accurate Estimate currently stands at a loss of 76 cents per share and the Zacks Consensus Estimate is pegged at a loss of 71 cents per share.

Zacks Rank: VSTM currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Verastem, Inc. Price

Verastem, Inc. price | Verastem, Inc. Quote

Stocks to Consider

Here are a few stocks worth considering from the healthcare space, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

argenx ARGX has an Earnings ESP of +12.88% and a Zacks Rank #2 at present.

argenx stock has lost 3.2% year to date. ARGX beat on earnings in two of the last four quarters and missed in the other two, delivering an average surprise of 345.11%.

CytomX Therapeutics CTMX has an Earnings ESP of +38.89% and a Zacks Rank #2 at present.

CytomX Therapeutics’ shares have plunged 27.2% year to date. CTMX beat on earnings in three of the trailing four quarters and missed in the other one, delivering an average surprise of 180.70%.

Novavax NVAX has an Earnings ESP of +495.75% and a Zacks Rank #3 at present.

Shares of Novavax have lost 25.3% in the year-to-date period. NVAX’s earnings beat estimates in two of the trailing four quarters and missed in the other two, delivering an average negative surprise of 0.48%.

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This article originally published on Zacks Investment Research (zacks.com).

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