Truist remains bullish on Verastem, says weakness in shares ‘an overreaction’

Truist analyst Srikripa Devarakonda notes Verastem (VSTM) shares are trading down about 20% on Thursday following a data update and company announcement indicating accelerated pathway opportunity focused on KRAS mut. Truist sees the weakness as an overreaction and continues to see commercial potential that is under-represented at current share levels. The firm says the selloff appears to be there was a discrepancy between investor expectations and what the FDA decided. In its view, FDA guidance wasn’t totally a surprise given commentary from company post data update in Q2. Truist argues that the unmet need is real — and it could still see use in the WT population even if the accelerated approval is only for mutant. The firm has a Buy rating on the shares with a price target of $15.