Verastem won't go hungry during its unlikely hunt for an initial public offering. The Cambridge, MA-based biotech, which is researching drugs that target cancer stem cells, has filed paperwork for a $20.1 million Series C round of financing this week, according to an SEC document.
Without a single drug in the clinic, Verastem surprised biotech industry watchers last week with a seemingly bold plan to raise $50 million in an IPO. It's still unclear how public investors will react to the IPO plans, but one thing is clear: The upstart has raised about $68 million in three rounds of financing in less than two years. The Series C round was first disclosed in the company's filing for the IPO last week, but the deal is generating buzz today after pubs caught wind of it through a separate filing that appeared on the SEC website Nov. 10. But to be clear, this round was raised before the firm revealed the IPO plans.
Christoph Westphal, the chairman and CEO of Verastem, has a track record for raising lots of cash for biotechs and taking them public. For example, he did the same at Sirtris, a developer of drugs against diseases of aging, before GlaxoSmithKline ($GSK) scooped up the developer for $720 million in 2008. Sirtris' science has been heavily criticized after some research groups failed to replicate some of the early findings about the benefits of resveratrol on which the company was founded.
With researchers continuing to scrutinize the benefits of the natural chemical, Westphal and his new team at Verastem have been building a case for the new company Verastem. The company is pursuing drugs that target cancer stem cells, which are suspected culprits in enabling cancer to survive after treatments and spread to other organs, according to a report in Xconomy.
Even biotechs with drugs in late-stage trials have struggled to become publicly traded. Many people are watching to see whether Verastem, which is still doing preclinical work, can buck the trend and pull off an IPO.