Thank you for holding and welcome to the Verastem Year-End 2015 Investor Conference Call on March 3, 2016. At this time, all participants are in a listen-only mode. There will be a question-and-answer session to follow. Please be advised that this call is being recorded at the company’s request and will be available on the company’s website for a period of two weeks from today. At this time, I’d like to introduce Mr. Brian Sullivan, Director, Corporate Development of Verastem. Please go ahead.

Thank you. Thank you all for joining us to discuss Verastem’s financial results and corporate highlights for the year-ending on December 31, 2015. My name is Brian Sullivan, Director of Corporate Development; and I am joined today by Mr. Robert Forrester, our President and Chief Executive Officer; Mr. Dan Paterson, our Chief Operating Officer; Mr. Jack Green, our Chief Financial Officer; and Dr. Jonathan Pachter, our Head of Research. I hope that you’ve had the opportunity to review the press releases on a new clinical collaboration with Pfizer and Merck KGaA and our year-end financial results press release we issued this morning. Before moving into discussion of the year-end results, please note that in this call, we will be making remarks about our strategy, future operations, future financial position, future expectations and plans and prospects for our company that constitute forward-looking statements within the meaning of the Safe Harbor provisions of Section 21-E of the Securities Exchange Act of 1934. All forward looking statements are subject to risks and uncertainties. We refer you to the risk factors section of the annual report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from these forward-looking statements. We caution listeners not to place undue reliance on any forward-looking statement as there are no assurances that the matters contained in such statements will be achieved. In addition, these forward-looking statements represent our views only as of today. Subsequent events and developments may cause our views to change. Although we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. With that said, Robert will provide an overview of recent corporate initiatives, including upcoming plans and milestones and then Jack will review highlights from the company’s financial results for 2015. Following some closing remarks, we will then conclude today’s call with a question-and-answer session, for which Dan, Jack and Jon will also be available. Please go ahead, Robert.

Good morning, everybody. Thank you, Brian. Thank you all for joining us this morning. We’re very excited to talk to you today about our strategy and the initiatives that we’ve been implementing at Verastem to achieve our mission of improving outcomes for patients with cancer. To that end, one of our primary underlying beliefs is that combination therapies are the future effective cancer care and we’re committed to exploring novel combinations of our drugs with other cancer treatments. Just this morning, we announced a new clinical collaboration with Pfizer and Merck KGaA for the development of new combination treatment of 6063 and Avelumab, a PD-1 inhibitor, forming with ovarian cancer. This collaboration is based on novel scientific discoveries which we hope to translate into the clinic. I’ll speak more about these in a moment. This is our second collaboration this year, enabling a combination of our FAK inhibitor with an immunotherapy. Our first was with Washington University in St. Louis, combining 6063 with Merck & Co.’s PD-1 inhibitor pembro in pancreatic cancer. We are driven by the science and our passion to make a meaningful difference in patients’ lives and we’re continuing to work toward validating our approach with high-quality partners and medical institutions. For those of you who may be new to Verastem, the company was founded on the research of doctors Bob Weinberg and Eric Lander of the Whitehead and Broad Institute at MIT and Harvard and their findings around cancer stem cells. Cancer stem cells are still a key part of our scientific story, but what we’ve discovered over the past few years is that focal adhesion kinase inhibition does more than just target cancer stem cells. What we’re finding is that a FAK inhibition also appears to have beneficial effects on the immune system in the…

Thank you, Robert. As of December 31, 2015, we had cash, cash equivalents and investments of $110.3 million compared to $92.7 million at December 31, 2014. We used approximately $45.6 million for operating activities during 2015. Our net loss for 2015 was $57.9 million, or $1.61 per share, as compared with a net loss of $53.4 million, or $2.07 per share, for 2014. The net loss for 2015 and 2014 includes non-cash stock-based compensation expense of $9.7 million and $12.1 million, respectively. Research and development expense for 2015 was $40.6 million compared with $35.4 million for 2014. The $5.2 million increase year-to-year was primarily related to an increase of $5.8 million in contract research organization expense for outsourced biology, chemistry, development and clinical services, which includes our clinical trial costs, an increase in personnel related costs of $1.4 million, and an increase of approximately $558,000 in consulting expense. These increases were partially offset by decreases of $1.3 million in stock-based compensation expense and $1.2 million in license fees. General and administrative expense for 2015 was $17.6 million compared with $18.2 million for 2014. The decrease of approximately $525,000 year-to-year was primarily related to a decrease in stock-based compensation expense of $1.1 million, a decrease of approximately $446,000 in professional fees, partially offset by an increase of approximately $856,000 in personnel costs. During the fourth quarter of 2015, we streamlined our operations and cost structure to be better aligned with our new strategy. We believe we are now well positioned to efficiently allocate our resources to our key programs, including the new clinical trials we expect to initiate this year. As of December 31, 2015, there were 36,941,261 common shares outstanding. Based on current operating plans, we expect to have sufficient cash, cash equivalents and short-term investments to fund our research and development programs and our operations into 2018. Now, I’ll hand it back over to Robert for some closing remarks.

Thank you, Jack. In closing, Verastem is dedicated to improving treatment outcomes for patients with cancer. We believe in our product candidates and we’ll invest accordingly to generate both clinical proof-of-concept and value for our stockholders. We believe we have the products, the capital and the team in place to execute on our goals. We look forward to updating you on our progress as the year unfolds. With that, we’re happy to take your questions.

[Operator Instructions] And our first question comes from the line of Matt Roden of UBS.

First question is you have clinical data in mesothelioma, in ovarian and in lung with 6063 and I’m just wondering have you looked at the samples or the – whatever material you have from those studies to see whether or not there is any evidence of any immuno-modulation, any changes in T cell responses or any other indicators that may suggest to you that in humans in the trials that you have that there is something going on in the IO side?

We’re in the early stages as far as getting [indiscernible] to look at that. In a few samples that we’ve been able to look at, we’ve seen some signs of increasing CDA T cells in tumors and decreasing, for example, T cell exhaustion markers. But we’re currently expanding that characterization with additional clinical samples.

Matt, one of the trials that we’re running, I think, you know is the Window study, mesothelioma [indiscernible] and we’re planning on doing a third cohort to particularly look at that question in tumor samples.

And then regarding the collaboration with Merck KGaA and Pfizer, do you have pre-specified criteria that you would need to see in the initial dose escalation to advance into expansion cohorts?

Matt, good question. Obviously in the dose escalation, we’re going to be first looking to see can we safely combine the two agents and that’s really the primary endpoint for the escalation. And then obviously we’re looking at, in the expansion phase, if we can have a greater clinical effect of the combination than we’ve seen with the PD-L1 by itself or the FAK inhibitor by itself.

I was just wondering if you can talk a little bit about the decision-making process as part of that collaboration. Who controls what the next steps will be and again whether or not there is some sort of pre-specified criteria to neutralize any differences of opinion as to whether or not you’re seeing synergistic effect?

There are defined criteria. We’ve not released them. We’ve spent quite a bit of time together with them really designing the protocol and coming up with the endpoint. They have a very large database of single-agent patients with exactly the same entry criteria that we have. So we’ve got a good understanding of the baseline response of the PD-L1 by itself. But obviously in the initial phase, it’s can we get to full doses of both agents and give them safely together and then can we increase beyond the baseline that you see.

And then lastly regarding the collaboration, financial terms not disclosed, but it sure reads like you’ve retained global commercial rates to the agent. And if that’s true, can you confirm that? And if that’s true, one would assume that at least in principal that there is cost-sharing arrangement in this collaboration.

We haven’t disclosed any of the financial arrangements for this study. I can tell you that neither party is inhibited in doing anything going forward or has given up any rights.

And our next question comes from the line of Mara Goldstein of Cantor Fitzgerald.

Just to follow-up on that, respect with this limited information that you provided on the corporate structure of the collaboration, but assuming this phase is a successful phase, are there contingency plans to collaborate on a next phase of clinical trial work or is that all subject to then to renegotiation?

So what we’ve decided to do is do the study, let the data speak for itself. Obviously, if the data is positive, we would work together going forward on a regulatory strategy and take it forward.

Just out of curiosity, who owns the protocol, if you will, for the current trial program, so to the extent that there has to be a go-to, is that a joint or is that – it’s really through Merck?

So have primary responsibility for running this study. Obviously, we work together with both Merck KGaA and Pfizer on the design of the protocol. And I just want to comment it’s been a pretty collaborative process as we put it together and we look forward to getting some data from this.

And then if I could just ask just a corporate question, there was clearly a scale back with [indiscernible] end of last year from a personnel perspective, but certainly it seems based on the conversation now that the clinical Phase 1 activity is ramping up again, so I’m just curious as to, from a personnel perspective, if there is any changes within 2016 that we should be thinking of?

I think right now we have a great team on the development side and translational research side. So I feel very comfortable with the portfolio of clinical programs that we have right now that we have the right people to do that. We may have to selectively add one or two people as the year progresses. You know, Mara, we’ve outsourced a lot of capabilities throughout the history of this company. We’ll continue to do that. That gives us ability to deal with marginal increases in workload by bringing in consultants and CROs et cetera. So we want to manage the company very prudently from a financial perspective as we’ve always done and we will continue to do that.

And our next question comes from the line of RK at H.C. Wainwright.

Just out of curiosity, Avelumab, the drug with Pfizer and Merck, is being tested in various different cancers outside of the ovarian one. Do you envision the possibility of testing 6063 in these additional cancers or is it all dependent on how you perform in the ovarian before thinking of other cancers?

We’ve had discussions about other cancers. I would say we probably want to see how ovarian works with the combination first, but we’d certainly be open to, as I believe our partners would be open to, exploring other cancers once we get through that first one.

RK, the other thing we said is during the year we want to build on our non-small cell lung cancer data, the Kras mutant trial that we are still finishing off now and we’d love at some point to be able to do combination with an IO drug in that setting as well. So obviously that requires the things beyond our control. There is no guarantee we can do it, but we’re very hopeful that we can do something in non-small cell lung cancer later this year as well.

And I wanted to add that certainly in preclinical models, the combination desirably with FAK inhibitor and checkpoint inhibitors is extended across models that represent many different cancers.

And then on the Washington University study in pancreatic cancer, I know that the current study is being run by the investigators. But what’s the company’s plan to progress forward if some of the initial results are positive and how does Verastem get involved and at what point do you see yourself getting involved in [translating] that indication?

First of all, I think it gets to the balanced clinical development approach that we’re taking, which is we want to control some of the trials ourselves and then other trials we’re happy to collaborate around. And that one, the pancreatic one you just referred to with Wash U and Merck is an example of one of those collaborations. And clearly, if we see good encouraging data coming out of that trial, we can leap forward and initiate a Phase 2 study if we think it is the right thing to do. So we always have the ability to bring a new trial in-house and develop it and take control of that development.

And the last question was on the 5584, the press release says that you’re seeing quite a bit of activity in various tumors. What sort of tumors are we talking about?

We haven’t really given awful lot of data about 5584. We will do so later in the year. It is a program that we are increasingly interested in and we look forward to sharing data around that. But as we said in the press release, we’re seeing a good profile for this compound and we’re seeing signs of clinical activity.

And our next question comes from the line of Ren Benjamin of Raymond James.

I guess first, can you talk a little bit about the rationale for the combination with PD-L1? I guess what I’m looking at is what’s been the data with the PD-L1 inhibitor? Have they both been marginal and you are looking for something substantially better or synergistic? And what’s the preclinical data, not just the bios, but with PD-L1 in particular that support this combination?

I told a little bit about it in the three-pronged approach that we’re seeing with FAK inhibitors. Let me hand over to Jon Pachter.

First of all, in the Cell paper in the model that was looked at most extensively, actually single-agent FAK inhibition was capable of giving striking tumor aggressions that were shown to be T cell mediated. In our collaborations with David DeNardo at Washington University, we found that not only the cancer stem cells and the T cell affects of the FAK inhibitors, but also the reduction of stromal density are all important in enhancing the effects of PD-1 inhibitors in particular. And I think when you look at some tumor types such as pancreatic cancer where checkpoint inhibitors, the single agents have done very poorly. It’s understood now that immune populations in the tumor microenvironment as well as stromal density are the problem there. And David DeNardo has been very excited to find that our FAK inhibitors by affecting stromal density and immune populations in a very positive way. And his models have led to very extended survival in some of the very difficult to treat pancreatic models. And that’s really led to the enthusiasm of the clinical investigators at Washington University who have then followed up on that clinically.

And I guess just expanding on that and maybe I’m just wrong in how I’m thinking about it, but were those experiments done with PD-L1 or is it just the assumption that if you inhibit PD-1, the yin to that yang is PD-L1, so it should work with that as well.

Probably the latter. I think we’ve done work most extensively with PD-1 antibodies and CTLA4 antibodies. But you’re right that the idea is that the PD-1, PD-L1 pathway is at play here and the FAK inhibitors will combine well with that pathway inhibition.

Regarding the study that will start, you mentioned that’s in advanced ovarian, should we just be thinking about it as, let’s say, like a 50-patient study that’s primary, obviously a safety study, but will identify the right dose and stop there or should we be thinking about it as a larger study that could expand once a safety dose is found?

So the way this study is written right now, it is powered to show a difference and an improvement in outcomes. We haven’t disclosed the exact number, I think it will be up on ClinicalTrials.gov in the coming weeks and months. And at that point, we’ll probably give a lot more detail about the protocol itself. Like I mentioned, if we see initial sign to clinical activity, we’d have the ability collaboratively with our partners to increase the size of the trial if we hope that was the right thing to do.

And in terms of outcomes, I’m going to assume that PFS is likely the primary endpoint, correct?

That is one of the primary endpoints. There’s obviously a bunch of secondary endpoints as well.

Just one final question from me and it’s a basic bio question. So just bear with me. But we saw the preclinical results that show impact on immune cells; we see the preclinical results which show some sort of an impact on stromal density. But I guess I’m trying to get a sense or an understanding as to what FAK is actually doing, let’s say, in the stromal compartment or what is FAK actually doing in, let’s say, T reg cells so that FAK inhibition actually leads to a decrease in T reg cells or maybe there is a different biological explanation?

Actually the group in Scotland, at Edinburgh, the Cell paper as well as David DeNardo in Wash U have come to very similar conclusions based on separate sets of data. So they have both found that FAK knockout in the tumor is sufficient for most of the immune changes that they’ve seen. And they’ve gone on to show that regulation of chemokine and cytokine production from the tumor cells is then able to regulate the T regs and increase CDAs in the tumor. And there is a lot more deficit, I’m not describing for example in the Cell paper that you can look at.

Will there be any data at ACR or ASCO?

Yes. We will be presenting at ACR, for example, on this.

And our next question comes from the line of Eric Criscuolo of Mizuho.

I guess just building on the previous question, is there any scientific rationale for why combining with PD-L1 versus PD-1 would be more efficacious or a safer combination?

It’s a good question and the answer is we don’t know yet. But we’re running obviously both sets of experiments, obviously one with Merck and one with Pfizer and the other Merck. So we’ll obviously find that out over the next year or two. But we have no scientific hypothesis to say one should be better or different to the other. But maybe, Jon, do you want to comment as well?

I’m just going to add that certainly in our discussions with Merck with their PD-1 antibody and with Pfizer and Merck KGaA on their PD-L1 antibody, they both felt that the data that we have preclinically especially with PD-1 antibodies gets them excited that it makes sense for their particular agent. So I think we just need to see the clinical results now to see whether one is more effective than the other combining with the FAK inhibitor.

And then just I was wondering to see if you could talk about anything that you’ve learned going through the COMMAND study and the results of that, anything actually that you can apply going forward with 6063 or the other pipeline drugs as far as targeting or development or strategic rationale, anything that you’ve [learned] since the unfortunate failure there?

I think the biggest lesson that we’ve learned is FAK is a single agent when you have active tumor is probably not sufficient, you probably need to combine it with something else. And if you look at what we’re doing, it really is combination studies going forward. As you may recall, we really went into mesothelioma as a single agent in a maintenance setting because of the Merlin hypothesis. So we’d seen preclinically that tumors that were low in Merlin were very sensitive to FAK inhibition. It turned out that Merlin being low was quite common in mesothelioma and quite rate in other cancers. So that led us down the path of looking at mesothelioma. And the lesson learned here is we need to combine the drug with other things. And in some settings, going to settings with minimal residual disease, and so we’re looking at different settings like that as well.

And I’m showing no further questions at this time. I would now like to turn the call over to Mr. Robert Forrester for closing remarks.

Thank you very much. Thank you all very much indeed for joining us this morning. I mean, as I was listening to the questions, I mean, I was reminded of the reason why each of us in this room are investors in Verastem and why we continue to believe in Verastem. I think there are a number of value-creating events that are going to occur over the next 12 to 18 months. And I put them into three categories. One is around immune-oncology strategy where we leveraged off the breadth of FAK’s activity and we talked a bit about that today. The second is 4718 in the pancreatic cancer trial we have ongoing right now, which also leverages off those different activities that we see. And third is the 5584 program and we’ll obviously update you a bit more on that later in the year. So we continue to be very, very excited and passionate about what we’re doing here. And we look forward to updating you during the year. Thank you very much indeed. Bye-bye.

Ladies and gentlemen, that does conclude the conference for today. We appreciate your participation. You may now disconnect.