Verastem, De Risked?

Introduction

Investors and watchers of VSTM were elated to receive positive news from the FDA in late September confirming approval of their drug “COPIKTRA.” Since this positive news the stock price has plummeted in excess of 65% from near $10 pre approval to its close on Christmas Eve of $3.35.

vstm 1-year chart from Nasdaq.com

Bears and others skeptical of VSTM’s future argued the price had been propped up on speculation, pushing the price near $10. This may explain the bulk of the drop from highs, but as it continues to plummet many question if it’s warranted. The stock currently trades around 58 cents above it’s 52 week low adding to the skepticism of this monstrous drop. The question continues to grow; is VSTM due for upside after this major hit?

Overview

VSTM is a biotech company based out of Boston. They have set out to provide the market with solutions geared towards improving the survival of cancer patients. As discussed above, their drug COPITKRA has been approved by the FDA.

Screen Shot 2018-12-25 at 10.50.14 PM.png

Source cancer health.com

This grants sales intended for use in Chronic Lymphocytic Leukemia and Follicular Lymphoma. The bearish markets in culmination with other factors have pushed VSTM down in the $3 range leaving it currently sitting at $3.35. This places market cap at just over $247million. Outstanding shares source can be found by clicking here.

Reduced Risk?

COPIKTRA is set aside from competition as it is the “the first FDA approved dual inhibitor of PI3K-delta and PI3K-gamma drug.” Countless articles surfaced in favor of VSTM and their ability to navigate hurdles inherent with sales upon approval, many claiming VSTM had since seen a reduction in risk due to the immediate drop from approval. Third quarter results provided investors with a peak into potential lucrative opportunities for VSTM as well as potential hurdles. The quarter was well underway leading to a negligible number from sales of COPTIKRA, yet highlighted hope for many investors as $508,000 was booked in sales within the first several days that remained after approval.

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Disclosure: I am/we are long VSTM.

Disclaimer: MS Money Move and it’s Chief Operating Officer who is a scientist and individual investor, as well as its affiliates are not registered ...

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