Shares of Verastem Inc (NASDAQ:VSTM), a biopharmaceutical company specializing in cancer drugs, shot up in pre-market trade in the wake of its move to sell a chunk of its shares to the health care investment firm Consonance Capital.
Earlier this week, the company announced a registered sale to funds managed by Consonance of 7,166,666 shares of its common stock at a price of US$6 per share. Verastem is set to reap as much as US$43m from the offering, which is expected to close on June 18.
In response, Verastem shares jumped 10.2% in early trade to US$6.15.
Verastem’s stock has recovered since trading below $3 last April on the back of the announcement that it will receive a decision from the US Food and Drug Administration about its cancer therapy Duvelisib next October.
Duvelisib treats relapsed leukemia and lymphoma and is strongly favored to receive the FDA’s approval. This month, Verastem also entered into an exclusive licensing agreement with Japan’s Yakult Honsha Co to develop and market Duvelisib across Japan.
“In Japan, current therapies to treat relapsed chronic lymphocytic leukemia and relapsed follicular lymphoma are extremely limited and duvelisib has robust clinical data supporting its efficacy and safety in both indications, which we can build upon,” said Masanori Ito, the head of Yakut’s pharmaceutical business division.