Varegacestat's Breakthrough in Desmoid Tumor Therapy and Its Implications for Immunome's Market Potential

The landscape of rare disease therapeutics is increasingly defined by innovations that bridge unmet medical needs with robust commercial potential. Among these, Immunome's varegacestat stands out as a compelling case study in undervalued innovation. The drug's recent Phase 3 RINGSIDE trial results-demonstrating statistically significant and clinically meaningful outcomes for desmoid tumor patients-position it as a transformative therapy in a niche but high-growth market. This analysis explores how varegacestat's breakthrough efficacy, combined with a favorable safety profile and a projected $5.2 billion global market by 2033, underscores Immunome's potential to deliver outsized returns for investors who recognize its current undervaluation according to DelveInsight.

Clinical Efficacy: A New Standard in Desmoid Tumor Therapy

Desmoid tumors, a rare and aggressive soft-tissue malignancy, have long lacked effective systemic treatments. Varegacestat's Phase 3 RINGSIDE trial results, announced in late 2025, redefine this paradigm. The trial reported an 84% reduction in the risk of disease progression or death compared to placebo (hazard ratio = 0.16, p < 0.0001), alongside a 56% confirmed objective response rate (ORR) versus 9% in the placebo group according to Immunome. These outcomes far exceed those of existing therapies, such as Ogsiveo (a gamma secretase inhibitor approved in 2023), which showed an ORR of 34.3% after one year of treatment according to Onclive.

Moreover, varegacestat achieved a median best tumor volume reduction of -83% versus +11% with placebo, while delivering meaningful pain relief-a critical quality-of-life metric for patients according to Immunome. The drug's safety profile, though marked by common adverse events like diarrhea (82%), fatigue (44%), and rash (43%), remains manageable, with most events classified as mild or moderate according to Immunome. This durability of efficacy and tolerability contrasts favorably with nirogacestat, which, while effective, has reported nonmelanoma skin cancers as a notable side effect according to Onclive.

Market Potential: Capturing a High-Growth Niche

The desmoid tumor market, though small, is poised for exponential growth. DelveInsight projects the global market to reach $5.2 billion by 2033, driven by the approval of novel therapies and the high unmet need in this patient population. Varegacestat's unique mechanism of action and superior clinical outcomes position it to capture a significant share of this market. Analysts including Guggenheim and Stephens have raised Immunome's price targets to $35 and $33, respectively, citing its potential to secure 50% market share in the U.S. alone, where the market is estimated at $1–$2 billion.

The urgency for new treatments is underscored by the limitations of current options. Nirogacestat, the only FDA-approved therapy for desmoid tumors, has demonstrated sustained efficacy but faces competition from varegacestat, which offers a more favorable risk-benefit profile. With Immunome planning to submit a New Drug Application (NDA) to the FDA in Q2 2026, the drug's regulatory pathway is clear, and its commercial launch could disrupt the market within 18–24 months.

Valuation Discrepancy: A Case for Undervaluation

Despite these promising fundamentals, Immunome's stock remains undervalued relative to its projected cash flow potential. The company's price-to-book ratio of 7.9x exceeds the US biotech industry average of 2.7x, yet this premium does not fully reflect the drug's market potential according to Yahoo Finance. For context, a 50% market share in the U.S. desmoid tumor space could generate annual revenues of $500–$1 billion, assuming a $100,000–$200,000 per-patient treatment cost. At current valuation multiples, this implies a significant upside for investors.

The market's cautious stance may stem from Immunome's ongoing operating losses and reliance on a single-product pipeline. However, the recent 151.8% 90-day stock return following the RINGSIDE trial results suggests growing investor confidence. Analysts argue that the company's current valuation fails to account for the broader gamma secretase inhibitor class's potential in other rare diseases, creating a margin of safety for long-term investors.

Conclusion: A Strategic Investment in Rare Disease Innovation

Varegacestat's clinical and commercial trajectory exemplifies the power of targeted innovation in rare diseases. By addressing a high-unmet-need condition with a durable, well-tolerated therapy, Immunome has positioned itself to capture a leadership role in a rapidly expanding market. While the company's current valuation reflects its developmental risks, the alignment of clinical success, regulatory clarity, and market growth makes it a compelling candidate for undervalued innovation. For investors with a long-term horizon, the time to act is now-before varegacestat's breakthrough becomes a widely recognized success.