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A Look at Verastem’s Operational Performance

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Operating expenses

Verastem (VSTM) incurred general and administrative expenses of $15.8 million in the second quarter of 2018 compared to $4.4 million in the second quarter of 2017. The increase was due to higher consulting and professional fees, personnel costs, and activities for a commercial product launch.

Its research and development expenses also increased from $0.04 million in the second quarter of 2017 to $12.38 million in the second quarter of 2018. The increase was due to higher contract research organization expenses.

Verastem’s total operating expenses increased from $13.46 million in the second quarter of 2017 to $28.19 million in the second quarter of 2018. The increase was due to its operating loss widening from $13.47 million in the second quarter of 2017 to $18.19 million in the second quarter of 2018.

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Bottom line

Verastem’s interest expense increased from $109,000 in the second quarter of 2017 to $516,000 in the second quarter of 2018. Its interest income also increased from $140,000 in the second quarter of 2017 to $343,000 in the second quarter of 2018.

Verastem incurred a net loss of $18.37 million in the second quarter of 2018 compared to $13.44 million in the second quarter of 2017. That translated to a net loss per share of $0.30 in the second quarter of 2018 compared to $0.36 in the second quarter of 2017. The decrease was due to an increase in the number of Verastem’s outstanding shares, which increased from ~36.99 million in the second quarter of 2017 to ~61.26 million in the second quarter of 2018.

We’ll look at Verastem’s valuation metrics in the next part.

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