Verastem Oncology, a biopharmaceutical company committed to advancing new medicines for patients with RAS/MAPK pathway-driven cancers, announced a new credit facility for up to $150 million and an equity investment of $7.5 million with Oberland Capital Management.
The company also announced a strategic collaboration with IQVIA to utilize IQVIA’s world-class infrastructure and established commercialization solutions to complement its launch strategy for the investigational combination of avutometinib plus defactinib for the treatment of recurrent KRAS mutant low-grade serous ovarian cancer (LGSOC) planned for mid-2025.
Verastem’s commercialization efforts are in anticipation of the U.S. Food and Drug Administration (FDA) approval of avutometinib plus defactinib in recurrent KRAS mutant LGSOC. And the company announced on December 30, 2024, that the FDA set a Prescription Drug User Fee Act (PDUFA) action date for its NDA submission of June 30, 2025.
Under this note purchase agreement with Oberland Capital, Verastem will issue an initial $75 million of notes at closing, expected to occur on January 13, 2025.
Then the company can access up to an additional $75 million in notes upon achievement of certain pre-determined milestones related to the potential regulatory approval and commercialization of avutometinib plus defactinib for the treatment of LGSOC. These notes carry an interest-only period of six years and will bear interest at a floating rate, which is subject to both a floor and a cap. This note purchase agreement also provides for revenue participation pursuant to which Oberland Capital will initially be entitled to 1% of the first $100 million of net sales in each calendar year of certain of the company’s products, subject to pro-rata increase upon potential future drawdowns.
The company has entered into a stock purchase agreement with affiliates of Oberland Capital for the private placement of 1,416,939 shares of the company’s common stock issued at closing, representing $7.5 million of gross proceeds based on the trailing 30-trading day’s volume-weighted average price or VWAP of $5.2931 per share.
And Oberland has the option to participate in future equity offerings that may be consummated by the Company within three years from closing for up to $2.5 million at the same price per share in such offering.
The closing of the stock purchase agreement is expected to happen with the closing of the note purchase agreement on January 13, 2025. And a portion of the proceeds from the notes and equity investment will be used to fully repay amounts owed under the company’s existing loan with Oxford Finance ($42.7 million), which has been terminated.
The agreement between Verastem and IQVIA enables Verastem to tap into IQVIA’s industry-leading expertise and resources while maintaining strategic oversight through the commercialization process and launch. And IQVIA will help accelerate key launch capabilities resulting in significant savings while delivering a world-class product launch.
KEY QUOTE:
“The Oberland Capital transaction, coupled with our strategic partnership with IQVIA, enables us to launch avutometinib plus defactinib for recurrent LGSOC from a position of financial strength and with commercialization solutions to accelerate our launch. The additional capital will help us create a commercial revenue stream to support our pipeline with new approaches for patients needing treatments for complex and rare cancers.”
– Dan Paterson, president and chief executive officer of Verastem Oncology
