Verastem, Inc

Verastem is down

Dan is not a clown

Wall Street is waiting

at the gates of hell

But we won’t sell now

We’ll buy or stand our ground

Won’t be turned around

Alex Trebek’s death

Caused our team to frown

Your Stock Pawnshop’s crowned

Turd’s done going down

Hey Calkins,

There is an easy way out

Simply call an I-banker

To your Needham town

We know we’re right

Got fast tracked tonight

Stock market kept on

pushin’ us around

Gravy Train’s in town

G-Money’s playground

Dr. Pachter,

There is an easy way out

Big Pharma needs your crown

So we won’t sell down

Frances “Tactical Frannie” MacAllister saw the VSTM news after the close today and immediately contacted the rest of the team. We picked Tom Petty’s: I Won’t Back Down for two reasons. First, the song is about resilience and unwavering determination in the face of adversity. Those readers who know somebody suffering from cancer understand the daily pain and challenges that patients go through with this horrible disease. We hope this little note can help provide a wee bit of hope. Secondly, Dr. Rhesus is very proud of his Tom Petty wig that he wears every Halloween.

We would like to dedicate this idea to Professor Rich Excell and his students at Gies College of Business at University of Illinois at Champaign-Urbana. We highly recommend reading Rich’s Stay Vigilant substack. In the not too distant future we hope to send a micro-cap/small-cap management team to the land of corn where they can pitch their stock to the Investment Management Academy. Illinois alumnus and philanthropist Larry Gies is the founder and CEO of Madison Industries. He is a fantastic investor and human being. I’m sure he has changed the lives of many young people, I know he changed mine.

Verastem, Inc. has an approximate market cap of $320 million and roughly $180 million of cash. A little over a year ago the company received approval for its drug that treats low-grade ovarian cancer with a KRAS mutation. We think revenue from this pill next year will be between 120 – 130 million. CEO Dan Paterson thinks that the franchise will be self-sustaining during the back half of the year. We applied a conservative multiple to value AVMAPKI FAKZYNJA CO-PACK at $400 million. Note: this is more than the current market cap of the company. But that is not all…..After the market closed, the FDA granted Fast Track status to Verastem’s VS-7375. This should speed up the treatment time for patients with non-small cell lung cancer.

Revolution Medicines, Inc (RVMD) trades at over 8x revenue and in our opinion is the closest comparable company. Your stock pawnstars like round numbers, so we are using a billion dollar valuation and a forecasted stock price of $11.11, which happens to be a message from the universe. I know the three of us have angels by our side. Hopefully, management gets the message and monetizes their science project. F**ck Cancer