Thank you for holding and welcome to the Verastem Year-End 2016 Investor Conference Call on March 23, 2017. 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 90 days from today. At this time, I’d like to introduce Mr. Brian Sullivan, Director, Corporate Development of Verastem. Please go ahead.

Welcome and thank you for joining us to discuss Verastem’s financial results and corporate highlights for the year-ending on December 31, 2016. My name is Brian Sullivan, Director of Corporate Development; and I’m joined today by Mr. Robert Forrester, our President and Chief Executive Officer; Mr. Dan Paterson, our Chief Operating Officer; Dr. Hagop Youssoufian, Head of Hematology and Oncology Development; and Mr. Steven Bloom, Senior Vice President, Corporate Development. On the call today, Robert will provide some introductory and closing remarks and Dan will provide an overview of our year-end financial results. We will then open the call up for your questions, whereas Hagop and Steve will also be available. I hope you’ve had the opportunity to review the year-end results press releases we issued earlier today. Before we begin our formal comments please note that, during this call, we will be making remarks about our strategy, future operations, future financial position, future expectations and plans and prospects for our company which are forward-looking statements that are subject to risks and uncertainties. We refer you to the disclosure notice section in our earnings release we issued today and the risk factor 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. I would now like to turn the call over to our President and CEO, Robert Forrester. Robert?

Thank you, Brian, and thank you to everybody for joining us this afternoon. During 2016, there were several significant developments at Verastem. In November, we lightened exclusive worldwide rights to developing and commercialize duvelisib from Infinity Pharmaceuticals. Duvelisib is a late-stage clinical product candidate in development for hematologic malignancies and we demonstrated activity in several of lymphoid cancers. Duvelisib is a potent and selective oral inhibitor PI3K delta and gamma. This compound was a unique find for us, because as a PI3K inhibitor, it leverages our knowledge in this area and complements our oncology pipeline of all small molecule agents that target malignant cells, both directly and through modulation of the tumor microenvironment. We view Duvelisib in-licensing transaction as an important step towards our goal of bringing new therapy to cancer patients with few to no treatment option – options. And by doing this, creating value for our shareholders. At the American Society of Hematology 2016 Annual Meeting, positive data from the DYNAMO study, a Phase 2 clinical trial demonstrating the activity of duvelisib in patients with double refractory indolent non-Hodgkin lymphoma, or iNHL represented in oral presentation given by Ian Flinn of the Sarah Cannon Research Institute. In his presentation, Dr. Flinn described results from 129 of valuable patients with double refractory iNHL with a median of three prior therapies. The DYNAMO study met its primary endpoints achieving an overall response rate of 46% as determined by an independent review committee with a highly significant p value. The median duration response to among all patients was approximately 10 months. Notably, 83% of patients have reductions in the size of their target lymph nodes of the independent review committee. Duvelisib was generally well tolerated, with an expected and manageable safety profile with appropriate risk mitigation and patient management. These results…

Thank you, Robert. Since we issued a press release earlier outlining our year-end 2016 financial results, I’ll just review the highlights beginning with our cash position. We ended 2016 with $80.9 million in cash, cash equivalents, and investments, which we believe is sufficient to support our research and development programs and operations into 2018. Verastem used $29.5 million for operating activities during 2016. In order to provide the company with additional financial flexibility, we recently entered into a loan and security agreement with Hercules Capital for up to $25 million. We received the first $2.5 million of financing under the loan facility when the transaction closed. This facility is designed to provide support and flexibility as we progress the development of duvelisib with additional tranches of up to $22.5 million in aggregate available subject to certain conditions, including positive DUO data. The proceeds will be used for ongoing research and development programs and for general corporate purposes. Net loss for the year ended December 31, 2016 was $36.4 million, or $0.99 per share, compared to a net loss of $57.9 million, or $1.61 per share for the year ended December 31, 2015. Net loss includes non-cash stock-based compensation expense of $6.2 million and $9.7 million for 2016 and 2015, respectively. Research and development expense for 2016 was $19.8 million compared to $40.6 million for 2015. G&A expense for 2016 was $17.2 million compared to $17.6 million for 2015. As Robert mentioned earlier, we’re well-capitalized and believe that we have the resources to support our research and development programs and operations into 2018. We successfully transitioned the duvelisib program from Infinity and are executing on the conduct of the trials and necessary regulatory preparation, as we approach the Phase 3 readout of the DUO study. Now, I’ll turn it back to Robert for some closing remarks and to open the call to questions.

Thank you, Dan. Clearly, 2016 was an important year for Verastem. The license of duvelisib has transformed us into a Phase 3 company with multiple potential future clinical applications and leaves us well-positioned to build a toxic commercial capability in hematologic malignancies. We believe that duvelisib holds significant potential for patients with lymphoid cancers that there’s room in the treatment continuum for duvelisib to fulfill the unmet need in relapsed refractory CLL. In parallel, we’re also advancing our development program in solid tumors with a combination of defactinib and checkpoint inhibitors. As we continue in 2017, we are very focused on achieving several important milestones. First of all, we report top line duvelisib data from the Phase 3 DUO study in CLL. Second, meet with the U.S. FDA and other regulatory agency to discuss the potential for filing a marketing application for duvelisib. Third, engage in a focused commercial ramp up in order to bring duvelisib to the U.S. market. In this scenario, we expect to pursue a partner for the ex-U.S. market for duvelisib. Fourth, expand the indications and settings of use where duvelisib may address unmet patient needs through additional clinical trials. Five, complete the Phase 1 portion of the combination trial evaluating defactinib with pembro and gemcitabine determining a recommended Phase 2 dose and initiating an expansion cohort. During the first-half of 2017, number six, dose to first patient in the Phase 1 dose escalation portion of the combination trial evaluating defactinib with pembro in conjunction with Cancer Research who came up with patients with pancreatic cancer, non-small cell lung cancer, or mesothelioma. And seven, during the second-half of 2017, there will be the Phase 1 dose escalation portion of the combination trial evaluating defactinib with avelumab in advanced ovarian cancer and then initiate an expansion cohort. We will continue to be active with a major medical companies throughout 2017, as additional longer-term clinical data are generated from duvelisib in non-Hodgkin lymphoma, as well as hopefully with a DUO data later this year. In addition, we set preclinical and early clinical data for defactinib in combination with a checkpoint inhibitors; pembro and avelumab. We look forward to updating you on our progress as the year unfolds. I will now ask the operator to open up our call to any questions you might have.

Thank you. Today’s question-and-answer session will be conducted electronically. [Operator Instructions] And our first question comes from Mike King from JMP Securities. Your line is now open.

Hello, guys. Thanks for taking the question. I know we spent a lot of time together lately serving a lot. But I just wanted to ask if you could talk about the prophylaxis regimen and do all and just kind of how complicated that is, how readily compliant or patients to the regimen, et cetera?

Okay. I – we’ll hand that over to Hagop to answer.

Hi, Mike, thanks very much for that question. So as you know, there is a potential for interaction with PI3K kinase inhibition, we’ve seen that with other product in the space also. Approximately, two years ago or so, before I’ve done less of – encountered some headwinds, our Infinity colleagues put together a prophylaxis regimen. And to the best of our knowledge, it’s – the adherence to that is good. We can further say that in the DUO trial, which is – which has completed accrual of course. We’re waiting for data. The DSMB has met a number of times evaluating the safety data and so far all science or that – it’s satisfactory. So I think that’s all we can say at the moment.

Mike, I’ll just add that, for both the DYNAMO and the DUO study, every patient has been prophylaxis. And so that’s been – Infinity is now our approach since the start of both of its trials, but I think it’s been very, very important.

Thanks very much.

Thank you. And our next question comes from RK from H.C. Wainwright. Your line is now open.

Thank you, and good afternoon, gentleman.

Hi, RK.

Regarding the DUO study, what sort of data should we expect with data released in your initial announcement? And assuming it’s coming out in the mid-year. Could we see the final data at the ASH Conference?

Okay, thanks for that question. So, obviously, the DUO study is ongoing and we expect the data to be in the middle of the year. And obviously, we’re very hopeful that would kind of just – it would just be the top line data that would be presented in the press release. The full data will be analyzed and presented at ASH will be the plan for the trial.

All right. Regarding duvelisib in the treatment of CLL, especially with so many other drugs, which are either being used or coming to the market. Where do you think it fits the bill in terms of the treatment paradigm of especially, as I said, there are quite a few drugs out there right now?

That’s a most critical question. I’ll hand it over to Steve, because he’s been leading the effort to make sure that we understand the opportunity here.

Yes, thanks, RK, I appreciate the question. So, while CLL patients have seen great advances in treatment over the past few years, there’s still an unmet need as we know and patients are not cured by these current treatments. And most unfortunately, we will require additional therapy options after they relapse. So as these patients are becoming tolerant and less discontinued therapy, they will benefit from additional therapy options with alternate side effect profile. So what we’re seeing in the marketplace is sort of a changing sort of dynamic with Avelumab moving to the front line setting over time, since its approval last year. And then issues with Zydalis [ph] that are somewhat safety related have sort of leveled off the sales of that drug. And then Celexa coming up in the rear is a top drug to use, as you know, requires a fair amount of titrations, it’s cumbersome to use at the outset. Having said that, we feel that in the relapse front-line setting that there is a place we do duvelisib in the marketplace. You could oral to oral sequence and for patients that are older and most patients that are diagnosed with this disease are 71, 72 years old treated in the community for the most part. We know 70% of those scripts are written in the community setting, and you take that patient that relapses in 3, 3.5 years on front-line. therapy. They’re looking for that drug to use at that point. Duvelisib make sense. It’s oral, it’s monotherapy, and it allows the patient to continue treatment at home, which offers a quality of life benefit and allows the patient to continue on with their life the way it’s been. So, we don’t need a blockbuster here. We need a really successful launch. We need to find our place in that relapse setting. And we feel that’s where the opportunity is, and it’s bearing up in some of our market research now.

That’s good. Thank you very much, Steve. In terms of the non-Hodgkin’s lymphoma indication, now you have the positive DUO data. How do you plan to go forward with this indication?

Yes, we missed the start of your question. Could you repeat the start of your question please?

Yes regarding the NHL indication….

iNHL.

What is the development pathway there?

Okay. So the plan is as follows. We’re obviously very encouraged. I say, maybe I’ll let Dan on to this question. Dan?

Yes. So, obviously, we have the results from the DYNAMO study that were reported at ASH. It’s a positive study with DUO wrapping up in middle of this year. Our intent is to take the data from DYNAMO and do well and have pre-NDA meeting with the FDA speak to other regulators go through the totality of the data and then decide our path forward. Obviously, with a positive DUO study, we’re looking for an approval on CLL and we’ll make a decision based on the totality of the data in discussions with regulators what we do with NHL or FL

Okay, thanks. And the last one for me is, on the early-stage pipeline, what do you folks consider exciting which can come to the clinic in the next, say, 12 to 18 months?

If it’s coming to clinic, I’m not sure that we’re planning on bringing new compounds into the clinic. Our primary focus is close on duvelisib and defactinib, with defactinib, we entered into those three collaborations last year with Pfizer, Merck and the other Merck in combination with our IO programs. And we see this year is more about getting those studies starting – started executing on them getting through to picking a dose showing that we can safely combine and then moving into more activity data probably more like next year.

Okay Thank you.

Thanks, RK.

Thank you. And our next question comes from Ren Benjamin from Raymond James. Your line is now open.

Hey, good afternoon, guys. Thanks for taking the questions.. Maybe just to talk a little bit about the class as a whole, we get calls from investors saying that the PI3K class is quote dead and while we need something there, I’d love to hear kind of your thoughts on that? And then probably more importantly for me, this notion of evaluating duvelisib as a monotherapy versus where every therapy that’s in development seems to be going, which is in combination, so kind of your thoughts there?

So I’ll talk with the PI3K class and let Dan address that and then the monotherapy question that you see might want to address that.

Sure. I mean, I think when you look broadly at the PI3 class, obviously, there’s been the Pan-PI3, the PI3 alphas that were primarily going after solid tumors. And for whatever reasons, whether it was portfolio decisions, lack of efficacy as a single agent, toxicity issues, you really haven’t seen those go anywhere. Specifically, with PI3 delta, or in the case of duvelisib PI3 delta, gamma, clearly there has been efficacy in the hematologic malignancies. And I think you separate those two out and there are other PI3s and development coming on behind. But I think. in general, the PI3 deltas and delta, gammas in the hematologic malignancy has been a very different story than PI3 alpha pan-PI3.

And maybe Steve to address the monotherapy question?

Yes, thanks for the question. We –we’ve done a fair amount of diligence. We talked to KOLs. What I mentioned earlier about how the community setting sets up nicely for this drug, it leads to their quality of life. Again, go back to the elderly patient – frail elderly patients, their relapses and doesn’t want to go back to the hospital to get RITUXAN and infusion, doesn’t want to go to the hospital every three or four days for – of the need to Celexa sort of dosing escalation wants to stay at home on monotherapy go from front-line to another oral. They maintain their quality of life. And these patients aren’t looking for a cure, they’re looking to live as long as they possibly can. So based on again, a lot of what we’re hearing or heard in our diligence and meetings with KOLs and other customers, so to speak, our future customers. This is what gives us a pretty good feeling about the monotherapy approach.

I mean, Ren, I’ll just – I would just add that, one thing to think about here is sequencing better than combinations. And I think what we’re hearing is, it may well be the sequencing is the way to go in this elderly patient population. Now in the younger patient population, where the cure is something that one may be going for, maybe a start with chemo and maybe do more aggressive combinations, and they’ll be better able to deal with side effects too. But in this – in a study in elder patient population, where there’s a lot of comorbidities, sequencing might be a better and safer way to go. So that the patient actually dies from something apart from that disease. And I think that’s really what were – that was hearing from docs that they’re looking for. So the convenience of an oral therapy if they can take at home, it’s actually very attractive. As long as they can give a meaningful period of remission, then it’s great. And it helps them live their normal lives, and I think that’s what we’re hearing from KOLs. I think, Dan want to add.

Well, and that doesn’t mean, we’re not going to explore combinations in the future as well. We just feel very confident in the single agent efficacy and the paradigm that Robert was talking about trying to extend people’s good quality of life with this chronic disease. But we have a very long path in life and we’re all starting to look at combination opportunities as well.

Got it. And then just in regards to with your market research, the use of ibrutinib and maybe more importantly, how much – how many patients are refractory to ibrutinib? And do you have any data as to how duvelisib might be impacting those patients?

Yes, that’s a good question. The phase continues to evolve. Ibrutinib is now been on the market for a few years, again, moving to front-line. And there as Robert mentioned earlier, the study out of the University of Pennsylvania with Anthony Mato shows anywhere from 20% to 40% of Ibrutinib patients are becoming intolerant. They’re having breakthrough side effects, bleeding atrial fibrillation. So, those are the patients that progress, or have side effects with move on, as Robert mentioned, maybe the monotherapy duvelisib in sequence and that again is where we feel our market opportunity would be.

Great. Thank you guys very much and good luck.

Thanks, Ren.

Thanks.

Ladies and gentlemen, this concludes a question-and-answer portion of the call. I would like to turn it back to management for any additional or closing remarks.

Thank you very much. We appreciate everybody dialing in and asking full questions. We look forward to speaking with each of you in the near future as we continue to press forward in our mission to improve outcomes for patients with cancer. Thank you much and have a good evening.

Ladies and gentlemen, this concludes the conference for today. We appreciate your participation and you may all disconnect.