Verastem opened 70% down on Friday: what happened?

Verastem Inc (NASDAQ: VSTM) opened nearly 70% down this morning even though the pharmaceutical firm reported positive interim data for its combination therapy as a treatment of pancreatic cancer. 

Here's what is hitting $VSTM today

The oncology company commenced a regulatory submission aimed at U.S. approval for avutometinib and defactinib as well on Friday. 

But Verastem stock still crashed today primarily because the biotech firm restricted its NDA application for accelerated approval to “adult patients with recurrent KRAS mutant low-grade serous ovarian cancer”. 

That’s significant because it essentially reduces the total addressable population. 

The news arrives a couple weeks after $VSTM reported $1.26 a share of loss for its first financial quarter that exceeded experts’ forecast of $1.16 per share.

What else could be weighing on Verastem stock? 

Verastem reported one dose-limiting toxicity in the dose level 1 cohort. It is now scheduled to present the interim data at the annual meeting of American Society of Clinical Oncology on June 1st. 

Shares of the pharmaceutical firm are down sharply this morning also because it said the response rate (RR) in Phase 2 Ramp-201 trial has declined from 45% to 27%. 

What may also be weighing on Verastem stock today is the safety profile of the combination therapy. Out of the 41 patients enrolled in the study, 19 suffered an emergent serious adverse event. 

Wall Street currently has a consensus “buy” rating on $VSTM.