Verastem, Inc. (NASDAQ:VSTM) is a biopharmaceutical company focused on discovering and developing novel drugs that selectively target cancer stem cells. Cancer stem cells are an underlying cause of tumor recurrence and metastasis. Verastem is translating discoveries in cancer stem cell research into new medicines for the treatment of major cancers such as breast cancer.
Last week, Lazard Capital Markets initiated coverage of Verastem with a "Buy" rating and a $20 price target.
Highlights of the report are as follows:
- We believe VSTM shares will appeal to investors by virtue of the company’s world-class scientific founders, highly experienced management team and a research focus that may possess the potential to dramatically change the manner in which cancer is treated.
- Targeting CSCs could improve treatment outcomes. Verastem is pioneering the development of therapies that target cancer stem cells (CSCs). Emerging evidence suggests that, while standard cancer treatments may be effective at killing cancer non-stem cells, CSCs may survive, providing opportunities for re-growth.
- Technology platform designed to provide steady supply of CSCs. Verastem’s proprietary technology platform allows for the production of stable CSCs. Identification of potent CSC-killing agents may be facilitated through standard high-throughput screening techniques.
- VS-507 likely first in man for treating TNBC. Human testing of lead drug candidate VS-507 is expected to begin in 2012. A modulator of the Wnt signaling pathway, VS-507 will initially be tested for treating triple-negative breast cancer (TNBC).
- Valuation and risks. Our $20 PT is derived from a DCF analysis that values VS-507 for treating TNBC. Risks include successful development and regulatory approval of drug candidates as well as market competition.
Read the full report below.