Summary
Earlier this week, the primary oncology drug candidate from Verastem was approved by the FDA.
The stock has demonstrated some "buy the rumor, sell the news" trading action since then selling off post-approval.
What is the post FDA approval investment thesis now on this small oncology concern? We explore that question in the paragraphs below.
Looking for a portfolio of ideas like this one? Members of The Busted IPO Forum get exclusive access to our model portfolio. Get started today »
"How easy it is for so many of us today to be undoubtedly full of information yet fully deprived of accurate information." - Criss Jami, Healology
After the bell on Monday, the FDA announced it had granted approval to duvelisib to Verastem (VSTM) for use with adult patients with relapsed/refractory chronic lymphocytic leukemia or small lymphocytic lymphoma after at least two prior lines of therapy, and adult patients with relapsed/refractory follicular lymphoma after at least two prior lines of therapy.Despite this this stock fell some 20% in trading Tuesday in what can be typical "buy the rumor, sell the news" trading action investors see quite often as a small developmental firm finally achieves Tier 3 status.
In addition, the stock of Verastem had a pretty decent run up into this approval so some 'profit taking' could have been expected.
