Verastem Oncology announces $75 million private placement led by RTW

Verastem, Inc., which does business as Verastem Oncology (Nasdaq: VSTM), said on April 25, 2025 that it entered into a securities purchase agreement with certain institutional and accredited investors for a private placement. The company expects gross proceeds of approximately $75 million before placement agent fees and other offering expenses. The terms come from a press release issued through Business Wire and furnished with a Form 8-K.

The securities and the buyers

The placement includes approximately $24 million of common stock at a price of $7.00 per share. In lieu of common stock, certain investors will receive $51 million of pre-funded warrants at a price of $6.9999 per warrant. The exercise price of each pre-funded warrant will equal $0.0001 per share.

RTW Investments led the placement. Other new and existing investors took part, including BVF Partners, Nantahala Capital, Octagon Capital, OrbiMed and Stonepine Capital Management. It expects the placement to close on or about April 28, 2025, subject to customary closing conditions.

Verastem has agreed to file a registration statement for the resale of the common stock issued in the placement, and of the shares issuable on exercise of the pre-funded warrants, no later than 30 days after closing. The release names no counsel to the company or to the placement agents.

Placement agents and use of the money

Guggenheim Securities is the lead placement agent. RBC Capital Markets, BTIG, Mizuho and B. Riley Securities are co-placement agents. Verastem has agreed to pay customary placement fees and reimburse certain expenses of the placement agents.

The company says the proceeds are expected to fund the potential launch of avutometinib and defactinib in recurrent low-grade serous ovarian cancer, continued clinical research and development of product candidates including VS-7375, and working capital and other general corporate purposes. The release gives no cash balance or spending figure, so it does not show how long the money would last.

What the launch depends on

Verastem describes itself in its annual report as a late-stage development biopharmaceutical company focused on cancers driven by the RAS/MAPK pathway. The two lead drugs have not been approved. On October 31, 2024, Verastem completed a rolling new drug application to the FDA for avutometinib and defactinib in adults with recurrent KRAS mt low-grade serous ovarian cancer who received at least one prior systemic therapy. On December 30, 2024, the FDA accepted the application under the accelerated approval pathway, granted priority review and set June 30, 2025 as the action date.

The application rests on the RAMP 201 trial, which the 10-K describes as an adaptive, randomized, open label study. The primary analysis showed a confirmed overall response rate of 31% (34/109; 95% CI: 23-41) in all evaluable patients with measurable disease, after approximately 12 months of follow up. The response rate was 44% (25/57) in patients with KRAS mt disease and 17% (9/52) in patients with KRAS wt disease. Median duration of response in the KRAS wt group was 9.2 months, against 31.1 months in the KRAS mt group.

The safety record is not clean. The company reports a 10% discontinuation rate due to adverse events and says no new safety signals were identified. The most common treatment-related adverse events for the combination were nausea in 67.0% of patients, diarrhea in 58.3% and increased blood creatine phosphokinase levels in 60.0%. Grade 3 or higher events were 2.6% for nausea, 7.8% for diarrhea and 24.3% for the blood enzyme increase.

A confirmatory Phase 3 trial, RAMP 301, was announced in December 2023 and is open and enrolling. It will serve as the confirmatory study the FDA requires for the initial KRAS mt indication, and it is meant to support a wider indication regardless of KRAS status. The money from this placement is therefore being raised before the FDA has acted on the application and before the confirmatory trial reports. The release also warns that raising additional capital may cause dilution to stockholders.

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