Verastem, Inc.: Form 10-Q for the period ended Jun 30, 2025

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those discussed below and elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for our fiscal year ended December 31, 2024. Please also refer to the sections under headings “Forward-Looking Statements” and “Risk Factors” in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for our fiscal year ended December 31, 2024.

OVERVIEW

We are a biopharmaceutical company committed to the development and commercialization of new medicines to improve the lives of patients diagnosed with RAS MAPK pathway-driven cancers. We market AVMAPKI™ FAKZYNJA™ CO-PACK (avutometinib capsules; defactinib tablets) in the United States. Our pipeline is focused on novel small molecule drugs that inhibit critical signaling pathways in cancer that promote cancer cell survival and tumor growth, including RAF/MEK inhibition, FAK inhibition and KRAS G12D inhibition.

On May 8, 2025, the FDA approved AVMAPKI FAKZYNJA CO-PACK for the treatment of adult patients with “KRAS mt” recurrent LGSOC who received prior systemic therapy. The KRAS mt recurrent LGSOC indication has been granted approval by the FDA under the accelerated approval pathway based on the tumor response rate and duration of response. Continued approval for this indication may be contingent upon verification and description of clinical benefit in a confirmatory trial.

AVMAPKI (avutometinib) inhibits MEK kinase activity while also blocking the compensatory reactivation of MEK by upstream RAF. RAF and MEK proteins are regulators of the RAS/RAF/MEK/ extracellular-signal-regulated-kinase (“ERK”) MAPK pathway. Blocking RAF and/or MEK activates FAK, a key mediator of drug resistance. FAKZYNJA (defactinib) is a FAK inhibitor and together, the avutometinib and defactinib combination is designed to provide a more complete blockade of the signaling that drives the growth and drug resistance of RAS/MAPK pathway-dependent tumors. Avutometinib, alone or in combination with defactinib, has received orphan drug designation for the treatment of all patients with LGSOC in the United States. Defactinib has received orphan drug designation in ovarian cancer in the United States, the European Union, and Australia. In addition, the FDA granted orphan drug designation to avutometinib, in combination with defactinib, for the treatment of pancreatic cancer.

In the fourth quarter of 2020, we commenced a registration-directed trial investigating avutometinib in combination with defactinib for the treatment of patients with recurrent LGSOC entitled RAMP 201 study. We use the term “RAMP” to refer to our RAF and MEK Program. The RAMP 201 study is an adaptive two-part multicenter, parallel cohort, randomized, open label trial evaluating the efficacy and safety of avutometinib alone and in combination with defactinib in patients with recurrent LGSOC. The primary analysis from both the FRAME trial and RAMP 201 trial has been published.

In December 2023, we announced the initiation of a confirmatory Phase 3 trial to evaluate the combination of avutometinib and defactinib for the treatment of patients with recurrent LGSOC entitled RAMP 301. RAMP 301 is a randomized global confirmatory trial, which is evaluating the efficacy and safety of avutometinib and defactinib versus standard of care chemotherapy or hormonal therapy in patients with recurrent LGSOC with and without a KRAS mutation. RAMP 301 will serve as the confirmatory study required by the FDA for the combination of avutometinib and defactinib for the initial indication of recurrent KRAS mt LGSOC to potentially receive full approval and has the potential to support an expanded indication regardless of KRAS mutation status. RAMP 301 is a global study with enrollment open in the United States, Australia, Canada, Europe United Kingdom, New Zealand, Japan, and Korea. Enrollment is on track, and we are targeting full enrollment by the end of 2025.

On May 8, 2025, the FDA approved AVMAPKI FAKZYNJA CO-PACK in advance of its Prescription Drug User Fee Act or PDUFA action date. Following this approval, we submitted a letter to the National Comprehensive Cancer Network (“NCCN”) seeking inclusion of avutometinib plus defactinib combination therapy in its LGSOC treatment guidelines. NCCN included AVMAPKI FAKZYNJA CO-PACK in its LGSOC treatment guidelines consistent with the product’s approved indication. We submitted to NCCN the publications for RAMP 201 and FRAME in support of its consideration of the inclusion of the KRAS wild-type population evaluated in these trials in the NCCN Guidelines in July 2025. The NCCN Committee for Ovarian Cancer will holds its annual meeting in October 2025, and the Company has been informed that its submission will be reviewed at that time.

In October 2024, the Japanese Gynecologic Oncology Group dosed the first patient in a Phase 2 trial called RAMP 201J, evaluating the safety and efficacy of avutometinib in combination with defactinib in recurrent LGSOC in Japan. We expect to report initial data from RAMP 201J in Q4 2025.

In September 2021, we entered into a clinical collaboration agreement with Amgen, Inc. (“Amgen”) to evaluate the combination of avutometinib with Amgen’s KRAS G12C inhibitor LUMAKRAS® (sotorasib) in a Phase 1/2 study entitled RAMP 203. The Phase 1/2 trial began evaluating the safety, tolerability and efficacy of avutometinib in combination with LUMAKRAS in patients with KRAS G12C non-small cell lung cancer (“NSCLC”) who have not been previously treated with a KRAS G12C inhibitor, as well as in patients who have progressed on a KRAS G12C inhibitor. The trial built upon initial preclinical data showing enhanced anti-tumor efficacy with the combination of LUMAKRAS (KRAS G12C inhibition) and avutometinib (RAF/MEK inhibition) relative to either agent alone. In January 2024, the FDA granted fast track designation for combination of avutometinib and LUMAKRAS for the treatment of patients with KRAS G12C-mutant metastatic NSCLC who have received at least one prior systemic therapy and have not been previously treated with a KRAS G12C inhibitor. The RAMP 203 study has progressed to the recommended Phase 2 dose of 4 mg avutometinib in combination with 960 mg of LUMAKRAS for the doublet of avutometinib and LUMAKRAS. Enrollment of patients without prior G12C treatment and patients who have experienced disease progression on a KRAS G12C inhibitor in the doublet dose expansion phase has been completed. Patients in both doublet cohorts continue to be followed for safety and efficacy.

Based on emerging data demonstrating improved tumor regressions in KRAS G12C-mutant NSCLC preclinical models when a FAK inhibitor is combined with a G12C inhibitor and avutometinib, defactinib was added to the RAMP 203 study in new triplet cohorts in 2024. In December 2024, we announced three patients whose cancer previously progressed on a G12C inhibitor have been treated with the triplet combination of sotorasib 960 mg administered daily on a continuous schedule and avutometinib 3.2 mg twice-weekly plus defactinib 200 mg twice-daily. Avutometinib and defactinib are administered on a three out of four weeks schedule.​ There were no dose limiting toxicities observed in the first triplet combination cohort. Planned dose level evaluation cohorts for the triplet combination completed enrollment in first quarter of 2025. We expect to present an interim update of safety and efficacy from both the doublet and triplet data in the fourth quarter of 2025.

In May 2022, we received the first “Therapeutic Accelerator Award” from Pancreatic Cancer Network (“PanCAN”) for up to $3.8 million. The grant is supporting a Phase 1b/2 clinical trial of avutometinib in combination with defactinib entitled RAMP 205. RAMP 205 is evaluating the safety, tolerability and efficacy of avutometinib and defactinib in combination with GEMZAR® (gemcitabine) and ABRAXANE® (Nab-paclitaxel) in patients with previously untreated metastatic adenocarcinoma of the pancreas. The RAMP 205 trial is evaluating whether combining avutometinib (to target mutant KRAS which is mutated in more than 90% of pancreatic adenocarcinomas) and defactinib (to reduce stromal density and adaptive resistance to avutometinib) to the standard GEMZAR/ABRAXANE regimen improves outcomes for patients with pancreatic adenocarcinoma. In August 2022, PanCAN agreed to provide us with an additional $0.5 million for the collection and translational analysis of patient samples. Combination dose evaluation is ongoing.

A dose level “0” has been added to the RAMP 205 study protocol that evaluates 3.2 mg of avutometinib twice a week, 200 mg of defactinib twice a day for three weeks out of every four weeks with 800 mg/m2 of gemcitabine and 100 mg/m2 of Nab-paclitaxel on a schedule of day 1, day 8, and day 15. All dose levels have been expanded to 12 patients each, including six additional patients recently enrolled to dose devel 1, where it was reported five out of six patients reported an objective response rate at the American Society of Clinical Oncology (“ASCO”) 2024 Annual Meeting. At dose level 1, of the six additional patients, five remain on therapy and continue to be monitored for response given the initial length of time to response. We completed enrollment in quarter 1 of 2025. In May 2025, we announced as of April 25, 2025, 60 patients (12 per cohort) had been treated in one of five dose regimens with the combination of avutometinib and defactinib with gemcitabine and Nab-paclitaxel in frontline metastatic pancreatic ductal adenocarcinoma (“PDAC”). In the dose level 1 cohort, 12 patients received 2.4 mg of avutometinib twice a week, 200 mg of defactinib twice a day for 3 weeks out of every 4 and 800 mg/m2 of gemcitabine and 125 mg/m2 of Nab-paclitaxel on a schedule of day 1, day 8 and day 15. In dose level 1, 83% (10/12) of patients achieved partial responses (8 confirmed and 2 unconfirmed who remain on treatment). Given these results, we have selected dose level 1 as the recommended phase 2 dose, has met the pre-defined criteria to advance beyond the first stage of the expansion study, and is now enrolling up to 29 patients at this dose level. Adverse events across all dose cohorts remained generally consistent with the previously announced safety and tolerability profile, and no new safety signals have emerged.

Furthermore, avutometinib and defactinib are currently being investigated in combination with immunotherapeutic and other agents through investigator sponsored trials for the treatment of various solid tumors, including, but not limited to, colorectal cancer (“CRC”), gynecological cancer with MAPK pathway alterations, breast cancer, thyroid cancer and melanoma.

In August 2023, we entered into a collaboration and option agreement (the “GenFleet Agreement”) with GenFleet Therapeutics (Shanghai), Inc. (“GenFleet”) pursuant to which GenFleet granted us options to obtain exclusive development and commercialization rights worldwide outside of mainland China, Hong Kong, Macau, and Taiwan for up to three oncology programs targeting RAS pathway driven cancers (the “GenFleet Options”). Under the GenFleet Agreement, we can exercise our GenFleet Options on a program-by-program basis. The collaboration builds on the strengths of both companies in oncology small molecule drug development, enabling us to partner our clinical development and regulatory expertise with GenFleet’s accomplished discovery capabilities. This synergistic collaboration includes our experience and established network of collaborators, including scientific and clinical experts in RAS biology and RAS pathway-driven cancers and GenFleet’s accomplishments with its KRAS G12C inhibitor program. In December 2023, we announced the selection of an oral and selective KRAS G12D (ON/OFF) inhibitor entitled VS-7375 (known as GFH375 in China) with a potential best-in-class profile as the lead program from our collaboration with GenFleet. An investigational new drug (“IND”) application by GenFleet in China for VS-7375 was cleared in June 2024. In July 2024, GenFleet began dosing several patients in a Phase 1/2 trial in China that is evaluating VS-7375 in patients with KRAS G12D-mutated advanced solid tumors. The Phase 1/2 study is being conducted in approximately 20 hospitals in China. The Phase 1 study was used to determine the recommended Phase 2 dose, and the Phase 2 study will further evaluate the efficacy and safety of VS-7375 in patients with advanced solid tumors, such as PDAC, CRC, and NSCLC.

On January 14, 2025, we announced the early exercise of the GenFleet Option with respect to VS-7375. We filed an IND application in the United States for VS-7375 during the first quarter of 2025. In April 2025 we announced the FDA clearance of the IND, and in June 2025 we announced we dosed our first patient with VS-7375 in our U.S. Phase 1/2a clinical trial evaluating VS-7375 in patients with advanced KRAS G12D solid tumors. We expect to report a preliminary update on the Phase 1 monotherapy dose escalation in Q4 2025. Subject to the results of the Phase 1 monotherapy dose escalation, the Company plans to initiate monotherapy expansion cohorts in both advanced PDAC and NSCLC. Additionally, we expect to initiate the dose escalation cohorts in combination with cetuximab, chemotherapy, and chemotherapy with checkpoint-inhibitor for CRC, PDAC, and NSCLC, respectively, in Q4 2025. Subject to the results of the Phase 1 dose escalation combinations cohorts with VS-7375, the Company plans to initiate a combination expansion cohort in CRC, PDAC, and NSCLC. Verastem and GenFleet shared preclinical data at American Association for Cancer Research meeting in April 2025.

At the ASCO 2025 Annual Meeting, GenFleet announced updated data from the dose escalation phase of the Phase 1/2 trial of GFH375 (known as VS-7375 in the U.S.). GenFleet reported that 62 patients were enrolled in the Phase 1 portion of the study in China, receiving oral doses ranging from 100 to 900 mg daily. In the study, 98% of patients had metastatic disease, and 75% had received ≥2 prior lines of therapy. As of the data cutoff of May 16, 2025, 23 efficacy-evaluable patients with PDAC and 12 efficacy-evaluable patients with NSCLC, who received daily dosages of 400 or 600 mg and had at least one post-treatment tumor assessment, achieved an objective response rate (“ORR”) of 52% and a disease control rate (DCR) of 100%, and an ORR of 42% and a DCR of 83%, respectively. As of the cutoff date of March 31, 2025, GenFleet reported that there were no dose-limiting toxicities observed across all dose levels (100-900 mg QD), and the treatment-related adverse events (“TRAEs”) were mostly Grade 1/2. The most common TRAEs occurring in at least 20% of patients were diarrhea, nausea, vomiting, and anemia. TRAEs ≥ Grade 3 consisted mainly of decreased neutrophil count (8%) and diarrhea (5%). No TRAE-related deaths were reported.

Our operations to date have been focused on organizing and staffing our company, business planning, raising capital, identifying and acquiring potential product candidates, undertaking preclinical studies and clinical trials for our product candidates and initiating U.S. commercial operations following the approval of COPIKTRA through our ownership period ending in September 2020 and in anticipation of the approval of AVMAPKI FAKZYNJA CO-PACK. We have financed our operations to date primarily through public and private offerings of our common stock, pre-funded warrants, and warrants, offerings of convertible notes, sales of common stock under our at-the-market equity offering program, our loan and security agreement executed with Hercules in March 2017, as amended, the Loan Agreement with Oxford, our Note Purchase Agreement, the upfront payments and milestone payments under our license and collaboration agreements with Sanofi, CSPC, and Yakult, the upfront payment and milestone payments received under the Secura APA, and sales of Series B Convertible Preferred Stock. Additionally, from our U.S. commercial launch of COPIKTRA on September 24, 2018, through our ownership period ending in September 2020, we financed a portion of our operations through product revenue. From our U.S. commercial launch of AVMAPKI FAKZYNJA CO-PACK on May 8th, 2025, we are financing a portion of our operations through product revenue.

As of June 30, 2025, we had an accumulated deficit of $1,033.6 million. Our net loss was $25.9 million, $78.0 million, $8.3 million and $42.1 million for the three and six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, we had cash, cash equivalents, and investments of $164.3 million. In accordance with applicable accounting standards, we evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within 12 months after the date of the issuance of the consolidated financial statements. We anticipate operating losses may continue for the foreseeable future and we continue to incur operating costs to execute our strategic plan, including costs related to research and development of our product candidates and commercial activities. As a result of the assessment in accordance with the applicable accounting standards, these conditions raise substantial doubt about our ability to continue as a going concern for 12 months after the date the condensed consolidated financial statements are issued.

We expect to finance our operations with our existing cash, cash equivalents and investments, through potential future milestones and royalties received pursuant to the Secura APA, through the Note Purchase Agreement, through future product revenues or through other strategic financing opportunities that could include, but are not limited to collaboration agreements, offerings of our equity, or the incurrence of debt. However, given the risks associated with these potential strategic or financing opportunities, they are not deemed probable for purposes of the going concern assessment. If we fail to obtain additional capital or generate sufficient revenue from our commercialization activities in the future, we may be unable to complete our planned preclinical studies and clinical trials and obtain approval of certain investigational product candidates from the FDA or foreign regulatory authorities. Therefore, there is substantial doubt about our ability to continue as a going concern.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES

Our discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of certain assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements, and the amounts of revenues and expenses during the reported periods.

We believe that several accounting policies are important to understanding our historical and future performance. We refer to these policies as “critical” because these specific areas generally require us to make judgments and estimates about matters that are uncertain at the time we make the estimate, and different estimates—which also would have been reasonable—could have been used, which would have resulted in different financial results.

The critical accounting policies we identified in our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2024, related to revenue recognition, collaborative agreements, accrued and prepaid research and development expenses, and stock-based compensation. During the six months ended June 30, 2025, there were no material changes to our critical accounting policies.

RESULTS OF OPERATIONS

Comparison of the three months ended June 30, 2025 and 2024

(dollar amounts in thousands)

Product Revenue, Net. We began commercial sales of AVMAPKI FAKZYNJA CO-PACK within the United States in May 2025, following receipt of FDA marketing approval on May 8, 2025. For the three months ended June 30, 2025 (the “2025 Quarter”) we recorded approximately $2.1 million of net product revenue. We had no product revenue during the three months ended June 30, 2024 (the “2024 Quarter”).

Sale of COPIKTRA license and related assets revenue. Sale of COPIKTRA license and related assets revenue for the 2025 Quarter was $0.0 million compared to $10.0 million for the 2024 Quarter. Sale of COPIKTRA license and related assets revenue for the 2024 Quarter was comprised of one sales milestone payment of $10.0 million due to Secura achieving cumulative worldwide net sales of COPIKTRA exceeding $100.0 million during the 2024 Quarter. We received the $10.0 million milestone payment in July 2024.

Costs of sales – product. Costs of sales – product for the 2025 Quarter of approximately $0.3 million consisted of costs associated with the manufacturing of AVMAPKI FAKZYNJA CO-PACK, royalties owed to Chugai, Pfizer, and the Institute for Cancer Research (“ICR”) on such sales, and certain period costs. The Company began capitalizing inventory upon receiving FDA approval for AVMAPKI FAKZYNJA CO-PACK on May 8, 2025. Prior to the FDA approval of AVMAPKI FAKZYNJA CO-PACK, expenses associated with the manufacturing of AVMAPKI FAKZYNJA CO-PACK were recorded as research and development expense. Certain of the costs of AVMAPKI FAKZYNJA CO-PACK units recognized as revenue during the 2025 Quarter, or less than $0.1 million, were expensed prior to obtaining regulatory approval, therefore, are not included in cost of sales- product during this period. We expect cost of sales - product to increase in relation to product revenues as we deplete these inventories. We had no cost of sales – product during the 2024 Quarter.

Costs of sales –intangible amortization. Cost of sales – intangible amortization for the 2025 Quarter of approximately $0.1 million was related to finite-lived intangible assets related to AVMAPKI FAKZYNJA CO-PACK which we recognized and began amortizing in the 2025 Quarter. There was no cost of sales – intangible amortization the 2024 Quarter.

Research and development expense. Research and development expense for the 2025 Quarter was $24.8 million compared to $18.1 million for the 2024 Quarter. The $6.7 million increase from the 2024 Quarter to the 2025 Quarter was primarily driven by an increase of $2.4 million in contract research organization (“CRO”) costs, an increase of $2.0 million in investigator fees, an increase of $1.5 million in personnel costs, including non-cash stock compensation, and an increase of $0.8 million in clinical supply costs.

Research and development expenses consist of costs associated with our research activities, including the development of our product candidates. Research and development expenses include product/ product candidate and/or project-specific costs, as well as unallocated costs. We record expenses related to external research and development services, such as CROs, clinical sites, pass-through fees such as investigator fees, manufacturing organizations and consultants, by project and/or product candidate. We use our employee and infrastructure resources in a cross-functional manner across multiple research and development projects. Our project costing methodology does not allocate personnel, infrastructure and other indirect costs to specific clinical programs or projects.

Product/ product candidate/ project specific costs include:

• direct third-party costs, which include expenses incurred under agreements with CROs, the cost of consultants who assist with the development of our product candidates on a program-specific basis, clinical site costs, and any other third-party expenses directly attributable to the development of the product candidates;
• direct costs related to avutometinib or defactinib that are not specific to a clinical trial such as the costs relating to contract manufacturing operations including manufacturing costs in connection with producing avutometinib and defactinib are included within “Avutometinib and defactinib manufacturing and non-clinical trial specific” as the cost to manufacture avutometinib and defactinib is not allocated to specific clinical trials; and
• license fees.

Unallocated costs include:

• research and development employee-related expenses, including salaries, benefits, travel, and stock-based compensation expense;
• cost of consultants, including our scientific advisory board, who assist with our research and development but are not allocated to a specific program; and
• facilities, depreciation, and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, and laboratory supplies.

The table below summarizes our direct research and development expenses for our product/ product candidates/ projects and our unallocated research and development costs for the 2025 Quarter and the 2024 Quarter.

(in thousands)

The $4.1 million increase in avutometinib + defactinib – LGSOC was primarily driven by an increase in RAMP 301 trial costs as the trial continues to advance and enroll more patients. The $0.6 million decrease in avutometinib + defactinib – NSCLC was primarily driven by a decrease in RAMP 202 trial costs. The $1.7 million decrease in avutometinib and defactinib manufacturing and non-clinical trial specific expenses was driven by a reduction in manufacturing and study activities, as well as safety consulting services. The $2.4 million increase in GenFleet related expenses was primarily driven by drug product costs for the 7375-101 study.

Selling, general and administrative expense. Selling, general and administrative expense for the 2025 Quarter was $20.7 million compared to $10.2 million for the 2024 Quarter. The increase of $10.5 million from the 2024 Quarter to the 2025 Quarter primarily resulted from the increase of $8.1 million of consulting and professional fees related to the launch of avutometinib and defactinib in KRAS mt LGSOC, an increase of $2.7 million in personnel costs including non-cash based stock compensation, an increase of $1.0 million in travel and other costs, partially offset by a decrease of $1.3 million in commercial operations expenses.

Other expense. Other expense for the 2025 Quarter and 2024 Quarter was less than $0.1 million. Other expense for the 2025 Quarter and 2024 Quarter was comprised of transaction losses due to changes in foreign currency exchange rates.

Interest income. Interest income for the 2025 Quarter was $0.8 million compared to $1.0 million for the 2024 Quarter. The decrease of $0.2 million from the 2024 Quarter to the 2025 Quarter in interest income was primarily due to the decrease in investment balances on short term investments and cash equivalents and a decrease in interest rates on securities during each respective quarter.

Interest expense. Interest expense for the 2025 Quarter was $0.2 million compared to $1.1 million for the 2024 Quarter. The $0.9 million decrease from the 2024 Quarter was primarily driven by termination of the Loan Agreement with Oxford on January 13, 2025 resulting in a reduction of interest expense recorded in the 2025 Quarter. The Company has elected to record interest expense associated with the Notes within change in fair value of Notes on the condensed statements of operations and comprehensive loss.

Change in fair value of preferred stock tranche liability. The change in fair value of the preferred stock tranche liability was $0.0 million for the 2025 Quarter compared to $10.2 million income for the 2024 Quarter. The change in fair value of preferred stock tranche liability was comprised of the mark-to-market adjustment related to the second tranche right issued as part of the Securities Purchase Agreement. The preferred stock tranche liability expired in July 2024 and therefore was not outstanding during the 2025 Quarter. The fair value of the preferred stock tranche liability decreased from $10.2 million at the beginning of the 2024 Quarter to $0.0 million at the end of the 2024 Quarter resulting in $10.2 million income in the 2024 Quarter.

Change in fair value of warrant liability. The change in fair value of the warrant liability of $20.3 million for the 2025 Quarter was comprised of the mark-to-market adjustment for the liability classified warrants issued as part of the July 2024 Offering. The liability classified warrants decreased in value from December 31, 2024 as a result of the exercise of 2,787,499 Warrants during the quarter and a decrease in warrant valuation due to a lower stock price. There was no warrant liability outstanding during the 2024 Quarter.

Change in fair value of Notes. We elected the fair value option for the Notes and therefore the changes in fair value, including interest, other than changes that are directly attributable to instrument specific credit risk are recorded as change in fair of Notes in the condensed statements of operations and comprehensive loss. The change in fair value for the 2025 Quarter of $3.0 million was primarily driven by interest on the Notes and a reduction in the risk-free rate during the 2025 Quarter. There were no Notes outstanding in the 2024 Quarter.

Comparison of the six months ended June 30, 2025 and 2024

(dollar amounts in thousands)

Product Revenue, Net. We began commercial sales of AVMAPKI FAKZYNJA CO-PACK within the United States in May 2025, following receipt of FDA marketing approval on May 8, 2025. For the six months ended June 30, 2025 (the “2025 Period”) we recorded approximately $2.1 million of net product revenue. We had no product revenue during the six months ended June 30, 2024 (the “2024 Period”).

Sale of COPIKTRA license and related assets revenue. Sale of COPIKTRA license and related assets revenue for the 2025 Period was $0.0 million compared to $10.0 million for the 2024 Period. Sale of COPIKTRA license and related assets revenue for the 2024 Period was comprised of one sales milestone payment of $10.0 million due to Secura achieving cumulative worldwide net sales of COPIKTRA exceeding $100.0 million during the 2024 Quarter. We received the $10.0 million milestone payment in July 2024.

Costs of sales – product. Costs of sales – product for the 2025 Period of approximately $0.3 million consisted of costs associated with the manufacturing of AVMAPKI FAKZYNJA CO-PACK, royalties owed to Chugai, Pfizer, and ICR on such sales, and certain period costs. We began capitalizing inventory upon receiving FDA approval for AVMAPKI FAKZYNJA CO-PACK on May 8, 2025. Prior to the FDA approval of AVMAPKI FAKZYNJA CO-PACK, expenses associated with the manufacturing of AVMAPKI FAKZYNJA CO-PACK were recorded as research and development expense. Certain of the costs of AVMAPKI FAKZYNJA CO-PACK units recognized as revenue during the 2025 Period, or less than $0.1 million, were expensed prior to obtaining regulatory approval, therefore, are not included in cost of sales - product during this period. We expect cost of sales - product to increase in relation to product revenues as we deplete these inventories. We had no cost of sales – product during the 2024 Period.

Costs of sales –intangible amortization. Cost of sales – intangible amortization for the 2025 Period of approximately $0.1 million was related to finite-lived intangible assets related to AVMAPKI FAKZYNJA CO-PACK which we recognized and began amortizing in the 2025 Period. There was no cost of sales – intangible amortization the 2024 Period.

Research and development expense. Research and development expense for the Period was $53.9 million compared to $35.8 million for the 2024 Period. The $18.2 million increase in R&D expense from the 2024 period to the

2025 period was primarily driven by a $6.0 million GenFleet option payment related to VS-7375, a $4.7 million increase in CRO costs, a $2.5 million increase in investigator fees, a $2.3 million increase in personnel costs including non-cash stock compensation, a $2.1 million increase in drug substance and drug product manufacturing costs, and a $0.9 million increase in clinical supply costs. These increases were partially offset by a $0.3 million decrease in investigator-sponsored trial (“IST”) expenses.

The table below summarizes our direct research and development expenses for our product/ product candidates/ projects and our unallocated research and development costs for the 2025 Period and the 2024 Period.

(in thousands)

The $8.2 million increase in avutometinib + defactinib – LGSOC is primarily driven by an increase in RAMP 301 trial costs as the trial continues to advance and enroll more patients. The $1.9 million decrease in avutometinib + defactinib – NSCLC is primarily driven by a decrease in RAMP 202 trial costs. The $1.3 million increase in avutometinib + defactinib – pancreatic cancer is primarily driven by fully utilizing the PanCAN Grant in the second quarter of 2024 and therefore there was no offsetting reduction in expense in the 2025 Period. The $2.7 million decrease in avutometinib and defactinib manufacturing and non-clinical trial specific expenses was driven by a reduction in study activities and safety consulting services. The $9.8 million increase in GenFleet related expenses was primarily driven by the $6.0 million GenFleet Option payment with respect to VS-7375.

Selling, general and administrative expense. Selling, general and administrative expense for the 2025 Period was $35.7 million compared to $20.6 million for the 2024 Period. The increase of $15.1 million from the 2024 Period to the 2025 Period was primarily driven by an $11.7 million increase in consulting and professional fees, a $3.7 million increase in personnel costs including non-cash stock-based compensation, a $1.1 million financing cost fee related to the Note Purchase Agreement and the 2025 Private Placement, and a $1.1 million increase in travel, conference, and other expenses. These increases were partially offset by a $2.5 million decrease in commercial operations expenses.

Other expense. Other expense for the 2025 Period and the 2024 Period was less than $0.1 million. Other expense for the 2025 Period and 2024 Period was comprised of transaction losses due to changes in foreign currency exchange rates.

Interest income. Interest income for the 2025 Period was $1.8 million compared to $2.4 million for the 2024 Period. The decrease of $0.6 million from the 2024 Period to the 2025 Period in interest income was primarily due to the decrease in investment balances on short term investments and cash equivalents and a decrease in interest rates on securities during each respective quarter.

Interest expense. Interest expense for the 2025 Period was $0.4 million compared to $2.3 million for the 2024 Period. The decrease of $1.9 million from the 2024 Period was primarily driven by termination of the Loan Agreement with Oxford on January 13, 2025 resulting in a reduction of interest expense recorded in the 2025 Period. The Company has elected to record interest expense associated with the Notes within change in fair value of Notes on the condensed statements of operations and comprehensive loss.

Loss on debt extinguishment. The loss on debt extinguishment for the 2025 Period of $1.8 million represents the loss recognized on early extinguishment of our Loan Agreement. On January 13, 2025, we repaid in full all principal, accrued and unpaid interest, fees, and expenses under the Loan Agreement in an aggregate amount of $42.7 million (the Payoff Amount). The Payoff Amount, excluding accrued interest, exceeded the carrying amount of the Term Loans on January 13, 2025 by $1.8 million which was recorded as a loss on debt extinguishment. There was no loss on debt extinguishment in the 2024 Period.

Change in fair value of preferred stock tranche liability. The change in fair value of the preferred stock tranche liability was $4.2 million income for the 2024 Period. The change in fair value of preferred stock tranche liability was comprised of the mark-to-market adjustment related to the second tranche right issued as part of the Securities Purchase Agreement. The preferred stock tranche liability expired in July 2024 and therefore was not outstanding during the 2025 Period. The fair value of the preferred stock tranche liability decreased from $4.2 million at the beginning of the 2024 Period to $0.0 million at the end of the 2024 Period resulting in $4.2 million income in the 2024 Period.

Change in fair value of warrant liability. The change in fair value of the warrant liability of $17.9 million for the 2025 Period was comprised of the mark-to-market adjustment for the liability classified warrants issued as part of the July 2024 Offering. The liability classified warrants decreased in value from December 31, 2024 as a result of the exercise of 2,787,499 Warrants during the period and a decrease in warrant valuation due to a lower stock price. There was no warrant liability outstanding during the 2024 Period.

Change in fair value of Notes. We elected the fair value option for the Notes and therefore the changes in fair value, including interest, other than changes that are directly attributable to instrument specific credit risk are recorded as change in fair of Notes in the condensed statements of operations and comprehensive loss. The change in fair value for the 2025 Period of $7.4 million was primarily driven by interest on the Notes and a reduction in the risk-free rate during the 2025 Period. There were no Notes outstanding in the 2024 Period.

LIQUIDITY AND CAPITAL RESOURCES

Sources of liquidity

We have financed our operations to date primarily through public and private offerings of our common stock, pre-funded warrants, and warrants, offerings of convertible notes, sales of common stock under our at-the-market equity offering program, our loan and security agreement executed with Hercules in March 2017, as amended, the Loan Agreement with Oxford, our Note Purchase Agreement, the upfront payments and milestone payments under our license and collaboration agreements with Sanofi, CSPC, and Yakult, the upfront payment and milestone payments received under the Secura APA, and sales of Series B Convertible Preferred Stock. Additionally, from our U.S. commercial launch of COPIKTRA on September 24, 2018, through our ownership period ending in September 2020, we financed a portion of our operations through product revenue. As of September 30, 2020, we have sold our COPIKTRA license and no longer sell COPIKTRA in the United States. We expect to finance a portion of our business through future potential milestones and royalties received pursuant to the Secura APA.

As of June 30, 2025, we had $164.3 million of cash, cash equivalents, and investments. We primarily invest our cash, cash equivalents and investments in U.S. Government money market funds, U.S. government agency bonds, corporate bonds and commercial paper of publicly traded companies.

Risks and uncertainties include those identified under Item 1A. Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on March 20, 2025, and under “Risk Factors” in this Quarterly Report on Form 10-Q.

Cash flows

The following table sets forth the primary sources and uses of cash for the 2025 Period and the 2024 Period (in thousands):

Operating activities. The use of cash in both periods resulted primarily from our net losses adjusted for non-cash charges and changes in the components of working capital. Our cash outflow from net losses adjusted for non-cash charges and adjustments was $84.2 million and $43.4 million for the 2025 Period and the 2024 Period, respectively. Non-cash charges and adjustments for the 2025 Period were primarily related to the change in fair value of warrant liability, non-cash changes in fair value of the Notes, loss on debt extinguishment and stock-based compensation expense. Non-cash charges and adjustments for the 2024 Period were primarily related to a change in fair value of preferred stock tranche liability and stock-based compensation expense. Our cash inflow from operating activities due to changes in operating assets and liabilities was $12.9 million for the 2025 Period. Our cash outflow from operating activities due to changes in operating assets and liabilities was $12.5 million for the 2024 Period. Cash inflow due to changes in operating assets and liabilities for the 2025 Period was primarily driven by an increase of $6.6 million in accrued expenses and other liabilities, an increase of $6.3 million in accrued expenses, long term, and an increase of $4.0 million in accounts payable, offset by an increase of $2.1 million in accounts receivable, an increase of $1.2 million in inventory, and an increase of $0.8 million in prepaid expenses, other current assets and other assets. Cash outflow due to changes in operating assets and liabilities for the 2024 Period was primarily driven by an increase of $10.0 million of accounts receivable, $0.8 million of grant receivable, a decrease of $0.7 million of accrued expenses and other liabilities, a decrease of $0.5 million of accounts payable, and a decrease of $0.3 million of deferred liabilities. The increases in both periods in prepaid expenses, other current assets, and other asserts is exclusive of cash received from PanCAN and used on the RAMP 205 study. Cash used in operating activities was $71.3 million and $55.9 million for the 2025 Period and the 2024 Period, respectively.

Investing activities. There was no cash used in investing activities for the 2025 Period. The cash provided by investing activities for the 2024 Period relates to maturities of investments of $60.0 million, partially offset by a purchase of property and equipment of less than $0.1 million.

Financing activities. The cash provided by financing activities for the 2025 Period represents $75.0 million of proceeds received pursuant to the Note Purchase Agreement, approximately $69.9 million of proceeds received from our 2025 Private Placement, $22.7 million of proceeds received pursuant to the Stock Purchase Agreement, $13.8 million of proceeds from the exercise of Warrants, $1.2 million of proceeds received from insurance premium financing, and less than $0.1 million of proceeds received related to our employee stock purchase plan, partially offset by the $42.6 million repayment of our Loan Agreement, and $0.7 million of payments for insurance premium financing. The cash provided by financing activities for the 2024 Period represents $1.3 million of proceeds received from insurance premium financing and $0.2 million of proceeds received from exercise of stock options and our employee stock purchase plan, partially offset by $0.8 million of payments on insurance premium financing, $0.2 million of payments of deferred issuance costs, and $0.2 million of fees paid to the Lenders to amend our Loan Agreement with Oxford. Refer to Note 10. Debt to our unaudited condensed consolidated financial statements included in this quarterly report for additional details on the Note Purchase Agreement and Loan Agreement; Note 15. Capital Stock to our unaudited condensed consolidated financial statements included in this quarterly report for additional details on the 2025 Private Placement, the Note Purchase Agreement, and the Warrants; Note 12. Notes Payable to our unaudited condensed consolidated financial statements included in this quarterly report for additional details on the finance agreement with First Insurance related to insurance premium financing and the monthly payments of principal and interest related thereto.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

The disclosure of our contractual obligations and commitments was reported in our Annual Report on Form 10-K for the year ended December 31, 2024. Except as previously disclosed in the Company’s subsequent filings with the SEC, including this Quarterly Report on Form 10-Q, there have not been any material changes from the contractual obligations and commitments previously disclosed in such report.

We are exposed to market risk related to changes in interest rates. We had cash, cash equivalents and investments of $164.3 million as of June 30, 2025, consisting of cash and U.S. Government money market funds. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because most of our investments are interest bearing. Our available for sale securities are subject to interest rate risk and will fall in value if market interest rates increase. Due to the short-term duration of most of our investment portfolio and the low risk profile of our investments, an immediate 100 basis point change in interest rates would not have a material effect on the fair market value of our portfolio.

We contract with CROs and contract manufacturers globally which may be denominated in foreign currencies. We may be subject to fluctuations in foreign currency rates in connection with these agreements. Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. As of June 30, 2025, an immaterial amount of our total liabilities was denominated in currencies other than the functional currency.

As of June 30, 2025, we have borrowed $75.0 million under the Note Purchase Agreement. The Notes under the Note Purchase Agreement bear interest at a floating rate equal to the sum of (i) the greater of the Term SOFR (as defined in the Note Purchase Agreement) and 4.29%, and (ii) 3.71%, which is subject to an overall floor and cap. Changes in interest rates can cause interest charges to fluctuate under the Note Purchase Agreement. A 10% increase in current interest rates would have resulted in an immaterial increase in the amount of cash interest expense for the three and six months ended June 30, 2025 due to the overall interest rate floor and cap.

Evaluation of disclosure controls and procedures

Our management, with the participation of our President and Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal financial and accounting officer), evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934 (Exchange Act), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2025, our President and Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in internal control over financial reporting

There have been no changes in our internal control over financial reporting during the three months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

You should carefully review and consider the information regarding certain factors that could materially affect our business, financial condition or future results set forth under Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 as filed with the SEC on March 20, 2025 and as set forth below.

Current and future health care reforms may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain.

In the United States and some foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, prevent or delay marketing approval of our product candidates, restrict or regulate post approval activities, and affect our ability to profitably sell any of our product candidates for which we obtain marketing approval.

Other healthcare reform efforts or actions under the Trump Administration may affect access to healthcare coverage or the funding of health care benefits, although the full impact of such efforts or actions cannot be predicted. For example, Congressional Budget Office has estimated that Medicaid provisions in the budget reconciliation legislation known as the “Big Beautiful Bill”, including restrictions in eligibility and funding for Medicaid, as well as changes to the healthcare marketplace, will increase the number of uninsured by $16 million by 2034. The nature and extent of future healthcare reforms cannot be predicted. There is significant uncertainty regarding the nature or impact of any drug pricing or broader healthcare reform implemented by the Trump Administration through executive action or by the U.S. Congress and the extent to which such action may be subject to litigation or other challenges. Further, a number of states have enacted state drug price transparency and reporting laws that could substantially increase our compliance burdens and expose us to greater liability under such state laws if and when we have marketed products. As a result, there are no assurances that these and other health reform measures that are implemented will not have a material adverse effect on our operations.

Recently, there has been considerable public and government scrutiny of pharmaceutical pricing and proposals to address the perceived high cost of pharmaceuticals. There have also been efforts at the federal level to implement measures to regulate drug pricing or payment for pharmaceutical products, including legislation on drug importation. Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price constraints, restrictions on copayment assistance by pharmaceutical manufacturers, marketing cost disclosure and transparency measures, and, in some cases, measures designed to encourage importation from other countries and bulk purchasing. We expect continued scrutiny on drug pricing and government price reporting from the U.S. Congress, agencies, and other bodies.

We cannot be sure whether additional legislative changes will be enacted, or whether the regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates may be. In addition, increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post marketing testing and other requirements.

The U.S. Supreme Court’s June 2024 decision in Loper Bright Enterprises v. Raimondo overturned the longstanding Chevron doctrine, under which courts were required to give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes. The Loper decision could result in additional legal challenges to regulations and guidance issued by federal agencies, including the FDA, on which we rely. Any such legal challenges, if successful, could have a material impact on our business. Additionally, the Loper decision may result in increased regulatory uncertainty, inconsistent judicial interpretations, and other impacts to the agency rulemaking process, any of which could adversely impact our business and operations. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action or as a result of legal challenges, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, our business could be materially harmed.

We continue to evaluate federal and state health care reform efforts and the effect that such efforts may have on our business. Healthcare reform measures that may be adopted in the future could have a material adverse effect on our industry generally and on our ability to successfully commercialize any product candidates, if and when approved.

Due to the recent change in presidential administration, we face uncertainty regarding potential regulatory developments that may adversely affect our business.

We face uncertainty regarding the potential for changes in the regulatory environment following the change in presidential administration in January 2025. While many of the Trump Administration’s proposed policies appear to be focused on deregulation, the new administration and federal government could adopt legislation, regulation, or policy that adversely affects our business or creates a more challenging and costly environment to pursue the development and commercialization of our current or future product candidates. For example, the federal government, including the FDA, may implement legislative, regulatory, or policy changes regarding the standards for approving drugs that we may be unable to satisfy or regarding the marketing of approved drugs that may limit or prohibit the advertising and promotion of our current or future product candidates, if approved. Further, the current presidential administration has substantially reduced the FDA’s workforce and may make further reductions, which may lead to disruptions and delays in the FDA’s review and oversight of our product candidates and impact the FDA’s ability to provide timely feedback on our development programs. Although it has been reported that there have not been reductions in workforce in the review or inspection divisions, any such reductions could extend review timelines, delay or prevent pre-approval inspections, and limit opportunities for FDA feedback on pending applications. It is difficult to predict how executive actions that may be taken under the current Trump Administration may affect the FDA’s ability to exercise its regulatory authority. If such executive actions impose constraints on the FDA’s ability to engage in routine oversight and product review activities in the normal course, our business may be negatively impacted.

If we fail to comply with our reporting and payment obligations under the Medicaid Drug Rebate Program or other governmental pricing programs in the U.S., we could be subject to additional reimbursement requirements, penalties, sanctions and fines which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

With the approval of AVMAPKI FAKZYNJA CO-PACK, we now participate in the Medicaid Drug Rebate Program and a number of other federal and state government pricing programs in the U.S. in order to obtain coverage for the product by certain government healthcare programs. These programs generally require us to pay rebates or provide discounts to certain private purchasers or government payors in connection with our products when dispensed to beneficiaries of these programs. In some cases, such as the Medicaid Drug Rebate Program, the rebates are based on pricing and rebate calculations that we report on a monthly and quarterly basis to the government agencies that administer the programs. The terms, scope and complexity of these government pricing programs change frequently. We may also have reimbursement obligations or be subject to penalties if we fail to provide timely and accurate information to the government, pay the correct rebates or offer the correct discounted pricing. Changes to the price reporting or rebate requirements of these programs would affect our obligations to pay rebates or offer discounts. Responding to current and future changes may increase our costs and the complexity of compliance will be time-consuming, and could have a material adverse effect on our results of operations.