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Item 1. Business

2021-03-18 compared with 2020-03-11 · 376 added, 593 removed, 364 unchanged (73% of the section changed)

We are a biopharmaceutical company focused on developing and commercializing medicines to improve the survival and quality of life of cancer patients.

Our marketed product, COPIKTRA®

(duvelisib) capsules, and most advanced product candidates, defactinib and CH5126766 also referred to as VS-6766, utilize a multi-faceted approach designed to treat cancers originating either in the blood or major organ systems.

We are currently developing duvelisib and our product candidates in both preclinical and clinical studies as potential therapies for certain cancers, including leukemia, lymphoma, lung cancer, mesothelioma, ovarian cancer, head and neck cancer, colorectal cancer and pancreatic cancer.

We believe that these compounds may be beneficial as therapeutics either as single agents or when used in combination with immuno-oncology agents, other pathway inhibitors or other current and emerging standard of care treatments i n aggressive cancers that do not adequately respond to currently available therapies.

COPIKTRA is an oral inhibitor of phosphoinositide 3-kinase (PI3K), and the first approved dual inhibitor of PI3K-delta and PI3K-gamma, two enzymes known to help support the growth and survival of malignant B-cells and T-cells.

PI3K signaling may lead to the proliferation of malignant B-cells and T-cells and is thought to play a role in the formation and maintenance of the supportive tumor microenvironment.

COPIKTRA was approved by the U.S.

Food & Drug Administration (FDA) on September 24, 2018 and is now indicated for the treatment of adult patients with relapsed or refractory chronic lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL) after at least two prior therapies and relapsed or refractory follicular lymphoma (FL) after at least two prior systemic therapies.

The indication in FL is approved under accelerated approval based on overall response rate.

Continued approval for this FL indication may be contingent upon verification and description of clinical benefits in confirmatory trials.

We are also developing duvelisib for the treatment of multiple types of cancer, the most advanced of which is for treatment of patients with peripheral T-cell lymphoma (PTCL).

The development of duvelisib in PTCL has been awarded Fast Track and Orphan Drug status by the FDA and a registration study is underway.

During 2020, we plan to continue to further develop duvelisib through our registration-directed Phase 2 PTCL study and other sponsored trials.

We also expect that interim data for several ongoing investigator sponsored studies (ISTs) will be reported.

Defactinib, is a targeted inhibitor of Focal Adhesion Kinase (FAK).

We are a development-stage biopharmaceutical company committed to the development and commercialization of new medicines to improve the lives of patients diagnosed with cancer.

Our pipeline is focused on novel small molecule drugs that inhibit critical signaling pathways in cancer that promote cancer cell survival and tumor growth, particularly RAF/MEK inhibition and FAK inhibition.

Our most advanced product candidates, VS-6766 and defactinib, are being investigated in both preclinical and clinical studies for treatment of various solid tumors, including, low-grade serous ovarian cancer (LGSOC), non-small cell lung cancer (NSCLC), colorectal cancer (CRC), pancreatic cancer, uveal melanoma, and endometrial cancer.

We believe that these compounds may be beneficial as therapeutics either as single agents or when used together in combination with other agents, other pathway inhibitors or other current and emerging standard of care treatments in cancers that do not adequately respond to currently available therapies.

VS-6766 is an orally available first-in-class unique small molecule RAF/MEK inhibitor.

In contrast to other MEK inhibitors commercially available and in development, VS-6766 is a dual RAF/MEK inhibitor that blocks both MEK kinase activity and the ability of RAF to phosphorylate MEK.

MEK-only inhibitors (e.g.

PD0325901) paradoxically induce MEK phosphorylation (pMEK) by relieving extracellular-signal-regulated-kinase ( ERK)-dependent feedback inhibition of RAF which may limit their efficacy.

By inhibiting RAF-mediated phosphorylation of MEK, VS-6766 has the advantage of not inducing pMEK.

This unique mechanism of VS-6766 enables more effective inhibition of ERK signaling and may confer enhanced therapeutic activity against ERK-dependent, RAS or BRAF mutant tumors.

VS-6766 has been shown to inhibit signaling and proliferation of tumor cell lines with a variety of KRAS, HRAS, or BRAF mutations.

VS-6766 has also been shown to synergize with G12C inhibitors in KRAS mutant NSCLC and CRC in preclinical models and enhances the anti-tumor effects of anti-PD-1 in KRAS mutant NSCLC mouse models.

VS-6766 has shown compelling synergy with defactinib in preclinical trials.

Defactinib, is a targeted inhibitor of FAK.

FAK is a non-receptor tyrosine kinase encoded by the protein tyrosine kinase-2 (PTK-2) gene that is involved in cellular adhesion and, in cancer, metastatic capability.

CH5126766, is a first-in-class small molecule RAF/MEK inhibitor.

Defactinib in combination with CH5126766 is being studied in an ongoing Phase 1 IST in patients with KRAS mutant advanced solid tumors, including ovarian cancer, non-small cell lung cancer (NSCLC) and colorectal cancer.

Similar to COPIKTRA, both defactinib and CH5126766 are delivered orally and designed to be a potential therapy for patients to take at home under the advice of their physician.

During 2020, we expect the results from the defactinib/CH5126766 IST to be reported.

Defactinib targets malignant cells both directly and through modulation of the tumor microenvironment.

Defactinib has received orphan drug designation in ovarian cancer in the United States, European Union, and Australia.

Preclinical research by Verastem Oncology scientists and collaborators at world-renowned research institutions has described the effect of FAK inhibition to enhance immune response by decreasing immuno-suppressive cells, increasing cytotoxic T cells, and reducing stromal density, which allows tumor-killing immune cells to enter the tumor.

Defactinib is an oral small molecule inhibitor of FAK and proline-rich tyrosine kinase (PYK2) that is currently being evaluated as a potential combination therapy for various solid tumors.

The combination of VS-6766 and defactinib has been found to be clinically active in patients with KRAS mutant tumors.

In an ongoing investigator-initiated Phase 1/2 study (The FRAME study), the combination of VS-6766 and defactinib is being evaluated in patients with recurrent LGSOC, KRAS mutant NSCLC and CRC.

Updated data from this study presented at the 2nd Annual RAS-Targeted Drug Development Summit in September 2020 demonstrated a 56% overall response rate (ORR) and long duration of therapy among patients with KRAS-G12 mutant LGSOC.

In an updated December 2020 data read-out of the FRAME study LGSOC cohort (n=24), the ORR is 52% (11 of 21 response evaluable patients).

Among the 21 response evaluable patients, the data demonstrated 70% ORR (7 of 10 response evaluable patients) in KRAS mutant LGSOC, 44% ORR (4 of 9 response evaluable patients) in KRAS wild type LGSOC and 0% ORR (0 of 2 response evaluable patients) in KRAS status undetermined LGSOC.

Based on an observation of higher response rates seen in NSCLC patients with KRAS-G12V mutations in the study, we are also exploring the role of VS-6766 and defactinib in KRAS-G12V mutant NSCLC.

The FRAME study was expanded in August 2020 to include new cohorts in pancreatic cancer, KRAS mutant endometrial cancer and KRAS-G12V mutant NSCLC.

We have met with regulatory authorities in third quarter of 2020, and have commenced registration-directed trials investigating VS-6766 as a monotherapy and in combination with defactinib in the fourth quarter of 2020.

The registration-directed trials are called RAF and MEK Program (RAMP) 201 and 202 studies.

RAMP 201 is an adaptive two-part multicenter, parallel cohort, randomized, open label trial to evaluate the efficacy and safety of VS-6766 alone and in combination with defactinib in patients with recurrent LGSOC.

RAMP 202 study is a Phase 2, adaptive two-part multicenter, parallel cohort, randomized, open-label trial to evaluate the efficacy and safety of VS-6766 alone and in combination with defactinib in patients with KRAS mutant NSCLC, following treatment with a platinum-based regimen and immune checkpoint inhibitor.

Both studies are discussed in greater detail below.

In addition, defactinib is currently being investigated in combination with immunotherapeutic and other agents through ISTs.

In 2020, it is planned to report results from certain ongoing dose escalation combination studies involving defactinib.

We are focused on the development and commercialization of small molecules kinase inhibitors for optimized efficacy and safety –

primarily as orally available drugs and drug candidates that are designed to treat various forms of cancer.

We are focused on the development and commercialization of small molecules kinase inhibitors for optimized efficacy and safety – primarily as orally available drugs and drug candidates that are designed to treat various forms of cancer.

Cancer is a group of diseases characterized by the uncontrolled growth and spread of abnormal cells.

The American Cancer Society estimated that in the United States in 2019, approximately 1.8 million new cases of cancer were diagnosed and over 600,000 people died from the disease.

The American Cancer Society estimated that in the United States in 2020, more than 1.8 million new cases of cancer were diagnosed and more than 600,000 people died from the disease.

Current treatments for cancer include surgery, radiation therapy, chemotherapy, hormonal therapy, immunotherapy, cell therapy, and targeted therapy.

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As a result, they have a range of side effects and although the treatments may succeed at initially decreasing tumor burden, they ultimately fail to kill all the cancer cells and/or to effectively disrupt the tumor microenvironment (TME), potentially resulting in eventual disease progression.

Accordingly, cancer remains one of the world’s most serious health problems and is the second most common cause of death in the United States after heart disease.

For example, the U.S.

annual incidence, based on 2019 estimates from the National Cancer Institute’s Surveillance, Epidemiology, and End Results Program (NCI;

SEER), is that during the year there were approximately 74,200 new cases of indolent non-Hodgkin lymphoma (iNHL), 228,150 new cases of lung cancer and 56,770 new cases of pancreatic cancer.

annual incidence, based on 2020 estimates from the National Cancer Institute’s Surveillance, Epidemiology, and End Results Program (NCI;

SEER), is that during the year there were approximately 228,820 new cases of lung cancer, 147,950 new cases of colorectal cancer and 57,600 new cases of pancreatic cancer.

With the application of new technologies and key discoveries, we believe that we are now entering an era of cancer research characterized by a more sophisticated understanding of the biology of cancer.

We believe that the potential of oral, targeted therapies, along with the rapidly advancing field of immunotherapy, or using the body’s immune system to fight cancer, present the opportunity to develop more effective cancer treatments.

Our goal is to develop targeted agents that both specifically kill cancer cells and disrupt the TME to enhance the efficacy of cancer treatment.

Agents that can modulate the TME to increase cytotoxic T-cell access to the tumor cells and decrease immunosuppressive T-cells in tumors have been sought after to increase the proportion of responding cancer patients and the duration of response (DOR) to cancer treatment.

Our commercial product, COPIKTRA is currently used to treat cancer patients with relapsed and refractory CLL/SLL and FL.

COPIKTRA, and our product candidates, defactinib and CH5126766, are being further evaluated for the treatment of certain types of hematologic and solid cancers, CLL/SLL, iNHL, T-cell lymphoma, lung cancer, head and neck cancer, ovarian cancer, colorectal cancer, pancreatic cancer, mesothelioma, and other advanced cancers.

Chronic Lymphocytic Leukemia/Small Lymphocytic Lymphoma, Non-Hodgkin Lymphoma

Hematologic malignancies are cancers in the cells of blood forming tissue (bone marrow) or in the cells of the immune system.

CLL/SLL, a form of non-Hodgkin lymphoma (NHL) occurs in a type of white blood cells called lymphocytes, specifically B-cells.

When most of the cancer cells are located in the bloodstream and the bone marrow, the disease is referred to as CLL.

When the cancer cells are located mostly in the lymph nodes, the disease is called SLL.

In general, NHLs are a disease that occurs in patients over the age of 65.

The NCI estimates that the number of new incidences of CLL/SLL was 4.9 per 100,000 men and women per year based on 2012-2016 cases and that the five-year relative survival rate from 2009 to 2015 for patients with CLL/SLL was approximately 85%.

Treatment of CLL/SLL has evolved over time from the initial use of monotherapy with alkylating agents (chlorambucil, bendamustine) and purine analogs (fludarabine) to immunotherapy (anti-CD52 monoclonal antibody alemtuzumab and anti-CD20 monoclonal antibody ofatumumab) and chemoimmunotherapy combinations (rituximab, ofatumumab and obinutuzumab in combination with purine and alkylating agents).

Since 2014, novel targeted agents have been approved in the relapsed setting and include the Bruton’s tyrosine kinase (BTK) inhibitor ibrutinib, the PI3K inhibitor idelalisib, in combination with rituximab, and the BCL-2 inhibitor venetoclax.

While available therapies have been shown to be effective, the majority of CLL/SLL will eventually relapse or become refractory to treatment.

In the relapsed or refractory population, other available therapies may not be appropriate for

some patients due to the patient’s age, comorbidities, response to prior therapies, and underlying disease.

In addition, some other available therapies have limitations due to route of administration (e.g., intravenous infusion) and the requirement for close monitoring within a hospital setting, which may prohibit their use in patients who have limited access to hospitals or clinics.

In consideration of eventual relapse, and the potential for treatment-associated toxicities or treatment-resistance, as well as patient convenience and accessibility, additional options are needed to treat patients with relapsed or refractory CLL/SLL.

The potential of additional oral agents, particularly as a monotherapy that can be used in the general community physician’s armamentarium, may hold significant value in the treatment of patients with CLL/SLL.

Currently, COPIKTRA is also being evaluated in combination with chemotherapy, or venetoclax for the treatment of patients with CLL/SLL.

Follicular Lymphoma

FL is typically a slow growing or indolent form of NHL that arises from B-lymphocytes.

FL accounts for approximately 20% of case of NHL.

Common symptoms of FL include enlargement of the lymph nodes in the neck, underarms, abdomen, or groin, as well as fatigue.

Typically, patients with FL have no obvious symptoms of the disease at diagnosis and present only with an enlarged lymph node on exam or found incidentally on the imaging study.

The NCI estimates that the number of new incidences of FL was 2.7 per 100,000 men and women per year based on 2012-2016 cases and that the five-year relative survival rate from 2009 to 2015 for patients with FL was approximately 88%.

Despite recent improvements in survival, FL remains an incurable disease.

There are various treatment options for FL based on the severity of associated symptoms and the rate of cancer growth.

If patients show no or very few symptoms, physicians may recommend not to treat the disease immediately, an approach referred to as “active surveillance”

(also known as “watchful waiting”).

Active treatment is often started if the patient begins to develop lymphoma-related symptoms or there are signs that the disease is progressing based on testing during follow-up visits.

FL is generally responsive to radiation and chemotherapy upon initial diagnosis and treatment.

The standard first line therapies for FL are rituximab, cyclophosphamide, doxorubicin, vincristine and prednisone (R-CHOP);

rituximab, cyclophosphamide, vincristine, and prednisone (R-CVP) and rituximab and bendamustine.

In most patients, these rituximab-containing regimens achieve remissions lasting 4-7 years.

Rituximab is used alone as a first-line treatment for patients whose frailty or comorbidities prelude cytotoxic therapy.

Single-agent rituximab also may be beneficial as maintenance therapy for patients who experience partial remission with first-line regimen.

Second-line treatments for follicular lymphoma include re-exposure to common first-line regimens, the radiopharmaceutical yttrium Y 90–ibritumomab tiuxetan, and the recently approved combination of bendamustine and obinutuzumab, a second-generation anti-CD20 antibody.

Patients with FL often undergo multiple courses of chemoimmunotherapy, increasing the risk of serious cardiac toxicity, immunosuppression, and myelosuppression, which is particularly problematic in elderly patients.

The choice of third-line treatment for relapsed/refractory follicular lymphoma depends largely on a patient’s age, how long the most recent remission lasted, and how aggressive the disease is.

There have been only incremental advances in treatment options for FL beyond chemotherapy or immunotherapies like the antibodies against CD20, such as rituximab and obinutuzumab, and the overall clinical outlook for patients still remains poor.

The use of an oral agent like COPIKTRA, particularly as a monotherapy that can be used in the general community physician’s armamentarium, may hold significant value for the treatment of patients with FL.

Currently, COPIKTRA is also being evaluated in combination with Nivolumab, and in an intermittent dosing regimen for the treatment of patients with FL.

Peripheral T-Cell Lymphoma

Peripheral T-cell lymphomas constitute approximately 4% of all NHLs diagnosed in the United States.

The incidence of peripheral T-cell lymphoma increases with age, with the median age at diagnosis at 60 years.

The disease course is very aggressive and is associated with poor prognosis.

Current treatment strategies are largely unsatisfactory in both first-line and refractory/relapsed.

Without treatment, PTCL survival is measured in months.

Most patients will relapse with first-line treatment and will not achieve remission of their disease.

The approach to

treat PTCL has traditionally been similar to that for diffuse large B-cell lymphoma.

However, outcomes are poor when PTCL is treated according to strategies established for aggressive B-cell lymphomas, with early relapse, progression free survival of less than 1 year, and overall survival of less than 2 years.

Even with current standard anthracycline-based chemotherapy, the 5 year survival rate is low, which presents the need for new therapies.

PTCLs are sub-classified into various subtypes, each of which are typically considered to be separate diseases based on their distinct clinical differences.

Most of these subtypes are very rare;

the four most common subtypes of PTCL –

peripheral T-cell lymphoma not otherwise specified (PTCL-NOS), anaplastic large-cell lymphoma (ALCL), and angioimmunoblastic T-cell lymphoma (AITL), and cutaneous T-cell lymphoma (CTCL) –

account for approximately 88% of all PTCLs in the United States.

For most subtypes of PTCL, the frontline treatment regimen is typically a combination chemotherapy, such as CHOP (cyclophosphamide, doxorubicin, vincristine, and prednisone), CHOEP (cyclophosphamide, doxorubicin, vincristine, etoposide, and prednisone), or other multi-drug regimens.

Because most patients with PTCL will relapse, some oncologists recommend giving high-dose chemotherapy followed by an autologous stem cell transplant (during which patients receive their own stem cells) to some patients who had a positive response to their initial chemotherapy.

Although promising, there is no firm clinical data to support that undergoing a transplant in this setting is better than not undergoing a transplant.

Historically, patients with relapsed disease have had a dismal prognosis, with a median survival of less than 6 months.

Patients with relapsed disease are usually treated with combination chemotherapy such as ICE (ifosfamide, carboplatin and etoposide) or other combination regimens, followed by stem cell transplantation.

However, some regimens might not be suited for everyone because of their high toxicity levels.

The potential of additional oral agents, either as a monotherapy or in combination with other anti-cancer agents, that can be used in the general community physician’s armamentarium, may hold significant value in the treatment of patients with PTCL.

Currently, COPIKTRA is being evaluated as monotherapy or in combination with romidepsin or bortezomib for the treatment of patients with PTCL.

Head and Neck Cancer

Cancers that are known collectively as head and neck cancers usually begin in the squamous cells that line the moist, mucosal surfaces inside the head and neck (for example, inside the mouth, the nose, and the throat).

These squamous cell cancers are often referred to as head and neck squamous cell carcinoma (HNSCC).

Head and neck cancers can also begin in the salivary glands, but salivary gland cancers are relatively uncommon.

Salivary glands contain many different types of cells that can become cancerous, so there are many different types of salivary gland cancer.

In the U.S, there are approximately 50,000 new cases of HNSCC and more than 10,000 deaths per year.

HNSCC represents over 90% of head and neck malignancies.

Although the majority of patients present with locoregionally advanced disease, the clinical course is characterized by a high recurrence rate approaching 50%, as well as the development of distal metastases.

The current standard of care for locally recurrent disease (without surgical or radiation treatment options) and/or metastatic disease in the first-line setting has been platinum-based doublet chemotherapy with cetuximab.

In 2016, the FDA approved two immunotherapeutic agents, nivolumab and pembrolizumab, for the treatment of patients with R/M HNSCC refractory to platinum-based therapy.

In 2019, the FDA approved pembrolizumab for the first-line treatment of patients with unresectable recurrent/metastatic (R/M) HNSCC.

For frontline therapy, pembrolizumab was approved for use in combination with platinum and fluorouracil for all patients with R/M HNSCC and as a single agent for patients whose tumors express PD-L1 with a combined positive score (CPS) ≥1 as determined by an FDA-approved test.

Despite the recent approval of pembrolizumab and nivolumab, only a small subset of patients appears to derive benefit from these anti-PD-1 therapies.

Although the efficacy may vary by PD-L1 expression or human papillomavirus (HPV) status as well as the number of prior therapies, typically the ORR is approximately 15% in the second-line or greater setting and somewhat higher in the first-line setting.

The majority of responses in either setting are partial responses (PRs).

Thus, there remains a large unmet medical need for better therapy options in patients with R/M HNSCC.

Currently, duvelisib is being evaluated in patients who are eligible for pembrolizumab monotherapy based on the current pembrolizumab prescribing information.

Ovarian Cancer

Ovarian cancer forms in tissues of the ovary, one of a pair of female reproductive glands in which the ova, or eggs, are formed.

Most ovarian cancers are either ovarian epithelial carcinoma, cancer that begins in the cells on the surface of the ovary, or malignant germ cell tumors that begin in egg cells.

According to the NCI, epithelial carcinoma of the ovary is one of the most common gynecologic malignancies, with 50% of all cases occurring in women older than 65 years.

The NCI estimates that the number of new incidences of ovarian cancer was 11.4 per 100,000 women per year based on 2012-2016 cases and that the five-year relative survival rate from 2009 to 2015 for patients with ovarian cancer was approximately 48%.

Most patients are treated with a combination of surgery, chemotherapy, targeted therapy and radiation therapy.

Surgery is often comprehensive, seeking to remove as much of the tumor as possible and may include removal of the ovaries or a total hysterectomy where the uterus is also removed.

Unfortunately, available therapies are rarely curative in the treatment of ovarian cancer and many tumors become resistant to platinum-based chemotherapy, which is the primary treatment regimen.

Further treatment with conventional chemotherapy is generally palliative, not curative, as the tumor is able to metastasize and spread to other sites in the body.

Currently, defactinib is being evaluated in combination with CH5126766 for the treatment of low grade serous ovarian cancer (LGSOC), and in combination with platinum and taxane for the treatment of patients with high grade serous ovarian cancer (HGSOC).

Colorectal Cancer

Colorectal cancer (CRC), also known as bowel cancer, colon cancer, or rectal cancer, is the development of cancer from the colon or rectum (parts of the large intestine).

One in twenty people will be diagnosed with colorectal cancer and colorectal cancer is the second leading cause of cancer death among men and women combined in the United States.

The NCI estimates that the number of new incidences of CRC was 38.6 per 100,000 men and women per year based on 2012-2016 cases and that the five-year relative survival rate from 2009 to 2015 for patients with CRC was approximately 64%.

The individual likelihood of survival depends on how advanced the cancer is, whether or not all the cancer can be removed with surgery and the person's overall health.

Treatments used for colorectal cancer may include some combination of surgery, radiation therapy, chemotherapy and targeted therapy.

Cancers that are confined within the wall of the colon may be curable with surgery, while cancer that has spread widely is usually not curable, with management being directed towards improving quality of life and symptoms.

Currently, defactinib is being evaluated in combination with CH5126766 for the treatment of patients with RAS mutant colorectal cancer.

We leverage our expertise in translational research and deep understanding of cancer treatment pathways as well as strategic partnerships to identify, develop and deliver effective options to address unmet needs.

We believe the best way for us to help patients living with cancer is by advancing newly emerging mechanisms of the disease and developing novel therapies that target them.

Despite significant advances in the treatment of cancer, unmet needs persist.

RAS has long been one of the most elusive cancer-causing proteins.

RAS mutant tumors are present in about 30% of all human cancers, have historically presented a difficult treatment challenge and are often associated with significantly worse prognosis.

Since its discovery almost four decades ago, researchers have persistently tried, and failed, to develop therapies that effectively block the cancer-promoting effects of RAS mutation, including KRAS, NRAS, BRAF, and HRAS mutations.

Challenges associated with identifying new treatment options for these types of cancers include resistance to single agents, identifying tolerable combination regimens with MEK inhibitors and new RAS inhibitors in development addressing only a minority of all RAS mutated cancers.

Our focus is targeting cancer cells both directly as well as indirectly by way of the tumor microenvironment.

Low Grade Serous Ovarian Cancer (LGSOC)

LGSOC is a slow-growing cancer with a high mortality rate that comprise 5-10% of serous ovarian cancers and 6-8% of all ovarian cancers, and has a significant prevalence of KRAS mutations which occur in approximately one third of patients.

The remaining KRAS wild-type patients include those with mutations in NRAS or BRAF.

There are an estimated 6,000 patients in the United States and 80,000 worldwide living with this disease.

Approximately half of those diagnosed are in their 20s-40s.

LGSOC has a median survival rate of 10 years, with 85% of patients experiencing recurrence and enduring severe pain and complications as the disease progresses.

Despite low response rates to chemotherapy, it continues to be the standard of care for this disease.

Currently, VS-6766 is being evaluated (i) in combination with defactinib and as a monotherapy for the treatment of patients with recurrent LGSOC in a Phase 2 registration directed study entitled RAMP 201 and (ii) in combination with defactinib for patients with advanced LGSOC in an investigator sponsored trial (IST) entitled FRAME.

Non-Small Cell Lung Cancer

According to the NCI, the most common types of non-small cell lung cancer (NSCLC) are squamous cell carcinoma, large cell carcinoma, and adenocarcinoma.

According to the NCI, the most common types of NSCLC are squamous cell carcinoma, large cell carcinoma, and adenocarcinoma.

Although NSCLCs are associated with cigarette smoke, adenocarcinomas may be found in patients who have never smoked.

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Patients with locally advanced unresectable disease may achieve long term survival with radiation therapy combined with chemotherapy.

Recently, immunotherapy has emerged as new treatment option for certain types of lung cancer.

While any cancer treatment can cause side effects, immunotherapy is generally well-tolerated.

In addition, the introduction of targeted treatment has emerged as lung cancer treatment.

Unlike chemotherapy drugs, which cannot tell the difference between normal cells and cancer cells, targeted therapies are designed specifically to attack cancer cells by attaching to or blocking targets that appear on the surfaces of those cells .

Patients with advanced metastatic disease may achieve improved survival and palliation of symptoms with chemotherapy, targeted agents, and other supportive measures.

The disease becomes resistant to therapy and returns in the majority of patients.

Currently, defactinib is being evaluated in combination with pembrolizumab or in combination with CH5126766 for the treatment of patients with NSCLC cancer.

KRAS mutation occurs in approximately 25% of NSCLC adenocarcinoma patients.

Two of the most common sub-types of KRAS mutations are G12V, which are present in approximately 7% of NSCLC and G12C, which occur in approximately 13% of NSCLCs.

There are several agents in development for KRAS-G12C mutations, but our study represents the first time that an agent will be studied specifically for KRAS-G12V.

Studies suggest that these types of KRAS mutations differ in clinical characteristics and response to traditional treatments such as chemotherapy.

Currently, VS-6766 is being evaluated (i) in combination with everolimus for treatment of patients with NSCLC in an IST, (ii) in combination with defactinib for the treatment of patients with advanced KRAS mutant NSCLC and advanced KRAS-G12V mutant NSCLC in an IST entitled FRAME, and (iii) in combination with defactinib and as a monotherapy for treatment of patients with recurrent KRAS mutant NSCLC in a registration directed study entitled RAMP 202.

Colorectal Cancer

CRC, also known as bowel cancer, colon cancer, or rectal cancer, is the development of cancer from the colon or rectum (parts of the large intestine).

One in twenty people will be diagnosed with colorectal cancer and colorectal cancer is the second leading cause of cancer death among men and women combined in the United States.

The NCI estimates that the number of new incidences of CRC was 38.2 per 100,000 men and women per year based on 2013-2017 cases and that the five-year relative survival rate from 2010 to 2016 for patients with CRC was

approximately 65%.

The individual likelihood of survival depends on how advanced the cancer is, whether or not all the cancer can be removed with surgery and the person's overall health.

Treatments used for colorectal cancer may include some combination of surgery, radiation therapy, chemotherapy and targeted therapy.

Currently, VS-6766 is being evaluated in combination with defactinib for the treatment of patients with advanced CRC in an IST entitled FRAME.

Pancreatic Cancer

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The median age for diagnosis is 70 with the disease affecting males slightly more than females.

KRAS mutant pancreatic cancer represents approximately 98% of pancreatic cancer diagnoses.

The prognosis for pancreatic cancer is extremely poor as shown by the survival rate, which indicates the need for new treatments.

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The limited impact of chemotherapies and immunotherapies to improve the outcome may be due to the dense stroma that is prevalent in pancreatic tumors and the TME.

Currently, defactinib is being evaluated in combination with pembrolizumab for the treatment of patients with pancreatic cancer.

Mesothelioma is a form of cancer that is most often caused by asbestos and affects the smooth lining of the chest, lungs, heart, and abdomen.

The average life expectancy for mesothelioma patients is approximately 12 to 22 months.

Mesothelioma most often forms in the pleural cavity of the chest or into the abdomen as a solid tumor that begins as a result of insult to the tissues caused by asbestos particles, which penetrate into the pleural cavity of the chest.

There are four types of mesothelioma, with pleural mesothelioma accounting for approximately 75% of all mesothelioma cases.

Pleural mesothelioma accounts for approximately 2,500 - 3,000 cases a year in the United States.

This disease affects the pleura, which is the thin balloon shaped lining of the lungs.

In its early stages, mesothelioma is difficult to detect as it may start with a thickening of the pleural rind, or fluid, which can be associated with many other conditions.

This rind is normally thin and smooth in the non-diseased state.

In time, it begins to demonstrate progression, forming a more pronounced irregular rind and nodules, which coalesce into a crust that compresses and invades into adjacent structures compromising lung and cardiac function.

The symptoms of mesothelioma gradually become more noticeable, prompting the patient to seek a medical consultation.

By this time, the progression of the disease may already be too advanced, as the tumor may have spread to the lymph nodes and/or begun to metastasize to remote organs of the body like the brain, spleen, liver or kidneys.

Although significant progress has been made in the treatment of many malignancies, mesothelioma remains a therapeutic challenge, with disappointing results even when the most aggressive therapies are used.

Given the lack of effective treatments, a substantial unmet need exists for improved first-line regimens and efficacious second-line treatments.

Currently, defactinib is being evaluated in combination with pembrolizumab for the treatment of patients with mesothelioma.

COPIKTRA, defactinib, and CH5126766 seek to utilize a multi-faceted approach to treat cancer by directly targeting the cancer cells, enhancing anti-tumor immunity, and modulating the local tumor microenvironment.

goal is to build a leading biopharmaceutical company focused on the development and commercialization of novel drugs that use a multi-faceted approach to improving outcomes for patients with cancer.

Currently, VS-6766 is being evaluated in combination with defactinib for the treatment of patients with advanced pancreatic cancer in an IST entitled FRAME.

Uveal Melanoma

Uveal melanoma, also known as ocular melanoma, is the most common primary cancer of the eye in adults.

It is a disease in which cancer (malignant) cells are found in part of the eye called the uvea.

The uvea includes the iris, the ciliary body, and the choroid layer.

The iris opens and closes to change the amount of light entering the eye.

The ciliary body changes the shape of the lens inside the eye to allow the eye to focus.

The choroid layer is next to the retina, the part of the eye that makes a picture.

According to the American Cancer Society, there are approximately 3,400 new cases of eye cancer (mainly melanoma) in the United States each year and the five year survival rate for eye melanoma is approximately 82%.

Uveal melanoma has a peak rate of diagnosis around 70 years old.

Uveal melanoma may have no early signs or symptoms and it is sometimes found during eye examples.

As the tumor grows symptoms may include blurred vision, spots that drift in field of vision or flashes of lights, dark spot on the iris, change in the size or change or pupil or a change in position of the eyeball in eye socket.

Uveal melanoma has a high risk of migrating from the eye to other sites in the body and therefore treatment is aggressive to try to prevent its spread.

Oncologists may initially try watchful waiting if the tumor shows no sign of growing or if the cancer is in the only eye with useful treatment.

When treatment is required, surgery is the most common approach for uveal melanoma.

Other treatments include radiation therapy, photocoagulation also known as light coagulation and thermotherapy.

Currently, VS-6766 is being evaluated in combination with defactinib for the treatment of patients with metastatic uveal melanoma in an IST.

Endometrial Cancer

Endometrial cancer, also known as uterine cancer, is a cancer of the endometrium, which is lining of the uterus.

The uterus is a hollow, pear-shaped organ in a woman’s pelvis in which a fetus grows after conception.

It is the most common type of cancer that affects the female reproductive organs.

Endometrial cancer mainly affects women after menopause, with a median age of diagnosis of 63.

The NCI estimates that the number of new incidences of uterine cancer was 27.8 per 100,000 women per year based on 2013-2017 cases and that the five-year relative survival rate from 2010 to 2016 for patients with endometrial cancer was approximately 81%.

KRAS mutant endometrial cancer represents approximately 21% of endometrial cancer diagnoses.

The current treatment of endometrial cancer depends on the stage and the specific pathology type of the disease at the time of diagnosis.

Surgery is generally considered for this disease.

In early stages, minimal invasive surgery may be the only treatment required.

In later stages, more involved and extensive surgeries to remove the disease outside the uterus and cervix may be required, in combination with chemotherapy and radiation therapy.

Currently VS-6766 is being evaluated in combination with defactinib for the treatment of patients with KRAS mutant endometrial cancer in an IST entitled FRAME.

With VS-6766 and defactinib, we seek to utilize a multi-faceted approach to treat cancer by directly targeting the cancer cells, enhancing anti-tumor immunity, and modulating the local tumor microenvironment.

Our goal is to build a leading biopharmaceutical company focused on the development and commercialization of novel drugs that use a multi-faceted approach to improving outcomes for patients with cancer.

Key elements of our strategy to achieve this goal are:

Continuing to support and maintain a commercial infrastructure in the United States for the marketing of COPIKTRA in approved and indicated hematologic malignancies as an oral monotherapy for patients needing additional lines of therapy following previous treatment.

Continuing to develop and explore combination of defactinib and CH5126766 and further define the initial registration-directed study for defactinib and CH5126766 in combination.

Expanding the indications in which COPIKTRA, defactinib and CH5126766 may be used.

In parallel with the CLL/SLL, iNHL, PTCL, NSCLC, HNSCC, ovarian cancer, pancreatic cancer, and mesothelioma trials and studies that are currently being conducted, we plan to pursue additional disease indications to expand the potential of our product and product candidates.

Supporting our third party collaborators outside of the United States to successfully continue on their pathway to development milestones and regulatory approval for duvelisib in their respective territories.

Advancing our product candidates through clinical development.

In addition to ongoing clinical trials evaluating duvelisib and CH5126766 as single agents, clinical studies are currently ongoing to evaluate duvelisib, defactinib and CH5126766 in combinations with other agents in several hematologic and solid tumor indications.

Collaborating selectively to augment and accelerate translational research, development and commercialization.

We may seek third‑party collaborators for the development and eventual commercialization of our product candidates.

In particular, we may enter into third‑party arrangements for target oncology indications in which our potential collaborator has particular expertise or for which we need access to additional research, development, or commercialization resources.

Additionally, we may continue to seek third-party collaborations outside of the United States to continue to maximize the benefits of our product and product candidate to patients around the world.

● Continuing to develop and explore VS-6766 alone and in combination with defactinib and execute on the registration-directed studies for VS-6766 and defactinib for treatment of LGSOC and KRAS G12V mutant NSCLC.

● Expanding the indications in which VS-6766 and defactinib may be used.

In parallel with clinical studies in NSCLC and LGSOC, signal-finding clinical studies are also in progress to assess safety and efficacy of this combination for patients with pancreatic cancer, KRAS/BRAF mutant endometrioid cancer, and metastatic uveal melanoma.

Additionally, preclinical studies are in progress to prioritize additional cancer indications and approaches to expand the potential of our product candidates.

● Assessing synergy of VS-6766 with other agents in preclinical models to prioritize for clinical development.

It is becoming well established that blockade of multiple nodes in the ERK pathway is necessary for maximal depth and duration of anti-tumor response.

We are assessing combinations of VS-6766 with other key agents targeting both the vertical RAS pathway (e.g.

KRAS G12C and SHP2 inhibitors), as well as agents targeting parallel pathways (e.g.

mTOR inhibitors).

These studies may lead to discussions with other companies and clinical investigators with the objective of assessing high priority combinations in the clinic.

● Establishing VS-6766 as the backbone therapy for RAS pathway-driven tumors.

● Considering the acquisition or in-licensing of rights to additional agents.

We may pursue the acquisition or in-license of rights to additional agents from third parties that may supplement our internal programs and allow us to initiate clinical development of a diverse pipeline of agents more quickly.

Building and maintaining scientific leadership in the areas of lymphoid malignancies, immuno-oncology, and the tumor microenvironment .

We plan to continue to conduct research in the hematological and immuno-oncology fields to further our understanding of the underlying biology of enhancing the body’s immune response to tumors as well as cancer progression and metastasis.

We also plan to continue fostering relationships with top scientific advisors, researchers and physicians.

We believe that exceptional advisors, employees and management are critical to the development of new therapies for the treatment of cancer.

OUR PRODUCT AND PRODUCT CANDIDATE

Our pipeline product and product candidates currently consist of COPIKTRA, which is now commercially available in the United States, having been approved by the FDA for the treatment of certain hematologic malignancies in September 2018, defactinib and CH5126766, which continue to be evaluated in the clinic for the treatment of a variety of cancer types.

● We may seek third-party collaborators for the eventual commercialization of our product candidates both in the U.S and around the world.

OUR PRODUCT CANDIDATES AND PIPELINE

Our pipeline product candidates currently consist of VS-6766 as a monotherapy and in combination with defactinib and other agents which continue to be evaluated in the clinic for the treatment of a variety of cancer types.

The follow table represents the status of our pipeline:

* Pre-clinical studies ongoing in multiple KRAS mutant tumors

1 Investigator-sponsored trial

2 NCT03875820

3 NCT04625270

4 NCT04620330

The status of our development programs in the table above represents the ongoing phase of development and does not correspond to the completion of a particular phase.

Drug development involves a high degree of risk and investment, and the status, timing and scope of our development programs are subject to change.

Important factors that could adversely affect our drug development efforts are discussed in the “Risk Factors” section of this Annual Report on Form 10-K.

VS-6766 and defactinib

VS-6766 is an orally available first-in-class unique small molecule RAF/MEK inhibitor.

In contrast to other MEK inhibitors in development, VS-6766 is a dual RAF/MEK inhibitor that blocks both MEK kinase activity and the ability of RAF to phosphorylate MEK.

MEK-only inhibitors (e.g.

PD0325901) paradoxically induce pMEK by relieving extracellular-signal-regulated-kinase ( ERK)-dependent feedback inhibition of RAF which may limit their efficacy.

By inhibiting RAF-mediated phosphorylation of MEK, VS-6766 has the advantage of not inducing pMEK.

This unique mechanism of VS-6766 enables more effective inhibition of ERK signaling and may confer enhanced therapeutic activity against ERK-dependent, RAS or BRAF mutant tumors.

Defactinib is a targeted inhibitor of FAK.

FAK is a non-receptor tyrosine kinase encoded by the PTK-2 gene that is involved in cellular adhesion and, in cancer, metastatic capability.

Defactinib targets malignant cells both directly and through modulation of the tumor microenvironment.

Defactinib has received orphan drug designation in ovarian cancer in the United States., European Union and Australia.

Defactinib is an oral small molecule inhibitor of FAK and proline-rich tyrosine kinase (PYK2) that is currently being evaluated as a potential combination therapy for various solid tumors.

Defactinib and VS-6766 have each shown independent clinical activity against RAS mutant cancers.

Phase I Study (FRAME ) investigating the Combination of VS-6766 and Defactinib in Patients with KRAS Mutant Cancers and Subsequent Analyses

The FRAME study is an open-label, investigator-initiated study that is designed to assess safety, dose response and preliminary efficacy of the VS-6766/defactinib combination in patients with KRAS mutant solid tumors, including LGSOC (including wild type), NSCLC and CRC.

The FRAME study is being led by Dr.

Udai Banerji and is being conducted in the United Kingdom.

In this study, VS-6766 was administered using a twice-weekly dose escalation schedule and was administered three out of every four weeks.

Defactinib was administered using a twice-daily dose escalation schedule, also three out of every four weeks.

Dose levels were assessed in three cohorts:

cohort 1 (VS-6766 3.2mg, defactinib 200mg);

cohort 2a (VS-6766 4mg, defactinib 200mg);

and cohort 2b (VS-6766 3.2mg, defactinib 400mg).

The recommended Phase 2 dose was determined to be VS-6766 3.2mg, defactinib 200mg.

The FRAME study is has expanded to include new cohorts in pancreatic cancer, KRAS mutant endometrial cancer and KRAS-G12V mutant NSCLC.

Initial Results from the FRAME Study Investigating the Combination of VS-6766 and Defactinib in Patients with KRAS Mutant Cancers and Subsequent Analyses

The poster presentation at the American Association for Cancer Research (AACR) 2020 Virtual Meeting held in April 2020 described safety and dose response data from the dose-escalation portion and expansion cohorts from an open-label, investigator-initiated Phase 1 study conducted in the United Kingdom assessing the combination of RAF/MEK and FAK inhibitor therapy in patients with LGSOC and KRAS mutant NSCLC.

The study evaluated the combination of VS-6766 and defactinib.

VS-6766 was administered using a twice-weekly dose escalation schedule and was administered 3 out of every 4 weeks.

Defactinib was administered using a twice-daily dose escalation schedule, also 3 out of every 4 weeks.

Dose levels were assessed in 3 cohorts:

cohort 1 (VS-6766 3.2mg, defactinib 200mg);

cohort 2a (VS-6766 4mg, defactinib 200mg);

and cohort 2b (VS-6766 3.2mg, defactinib 400mg).

In the patients with LGSOC (n=8), the ORR was 50% (n=4).

Among the patients with KRAS mutant LGSOC (n=6), the ORR was 67% (n=4).

Of the 4 patients who have responded, 3 had a prior MEK inhibitor and as of November 2019 had been on study for a median of 20.5 months (range 7-23 months).

In the patients with NSCLC (n=10), all of which had KRAS mutations, 1 patient achieved a partial response and 1 patient with a 22% tumor reduction still on treatment as of November 2019.

Median time on treatment for this cohort was approximately 18 weeks.

Based on an observation of higher response rates seen in patients with KRAS G12V mutations in the investigator-initiated Phase 1 combination study, we conducted a combined analysis with data from the combination study and the prior single-agent study that utilized a twice-weekly dosing schedule of VS-6766 to get a more complete picture of activity in KRAS G12V mutations.

The subsequent, combined analysis (VS-6766 monotherapy and defactinib combination) showed a 57% ORR (4/7 patients);

as a single agent (2/5 patients) and in combination with defactinib (2/2 patients) in KRAS G12V mutant NSCLC.

Similarly, the combined analysis showed a 60% ORR (3/5 patients);

as a single agent (1/2 patients) and in combination with defactinib (2/3 patients) in KRAS G12V mutant gynecologic cancers.

All KRAS G12V responses were confirmed responses per RECIST criteria.

These additional analyses were conducted to understand the impact that various KRAS variants may have had on response to identify potential signals to pursue in future prospective studies.

This additional analysis was not part of the AACR 2020 poster presentation.

The most common side effects seen in the Phase 1 study were rash, creatine kinase elevation, nausea, hyperbilirubinemia and diarrhea, most being NCI CTC Grade 1/2 and all were reversible.

The recommended Phase 2 dose was determined to be cohort 1 (VS-6766 3.2mg, defactinib 200mg).

The preliminary data reported in the study suggest that a novel intermittent dosing schedule of RAF/MEK and FAK inhibitor combination therapy has promising clinical activity in patients with KRAS mutant LGSOC and KRAS G12V mutant NSCLC, including patients previously treated with a MEK inhibitor.

Expansion cohorts remain ongoing.

Updated Phase 1/2 FRAME Study Results in Patients with LGSOC

On September 16, 2020, updated Phase 1/2 FRAME study results in patients with LGSOC were presented.

Among the patients with LGSOC (n=17), the ORR was 41% (7 of 17 patients), all partial responses (PRs).

Among the patients with KRAS-G12 mutant LGSOC (n=9), the ORR was 56% (5 of 9 patients).

Among the nine patients who had received one or more prior MEK inhibitors, five had responded.

In patients with KRAS mutant LGSOC receiving the recommended Phase 2 dosing (RP2D) regimen, the ORR was 50% (3 of 6 patients).

The LGSOC cohort of the FRAME study remains ongoing, with 53% (9 of 17 patients) still on study as of the data cutoff date of August 17, 2020, with three patients on treatment for two years or more.

The most common Grade ≥3 treatment-related adverse events (TEAEs) observed for the recommended Phase 2 dosing regimen were rash (4%) and elevated creatine kinase (4%).

No patients discontinued from the FRAME study due to TEAEs.

In an updated December 2020 read-out of the FRAME study LGSOC cohort (n=24), the overall response rate (ORR) is 52% (11 of 21 response evaluable patients), with KRAS mutant ORR at 70% (7 of 10 response evaluable patients), KRAS wild-type ORR at 44% (4 of 9 response evaluable patients) and KRAS status undetermined ORR at 0% (0 of 2 response evaluable patients).

As reported previously, the most common side effects seen in the study were rash, creatine kinase elevation, nausea, hyperbilirubinemia and diarrhea, most being NCI CTC Grade 1/2 and all were reversible.

The data from the LGSOC cohort are anticipated to be presented at a major medical meeting during the second half of 2021.

The novel, intermittent, combination dosing schedule used in the FRAME study continues to show encouraging clinical activity in patients with KRAS mutant and KRAS wild type LGSOC, including in patients who had previously progressed following treatment with a MEK inhibitor.

Phase II study (known as RAMP (RAF and MEK Program) 201 Study) Registration-Directed Trial of VS-6766 and Defactinib in Recurrent Low-Grade Serous Ovarian Cancer (LGSOC)

The RAMP 201 Study that was initiated in November 2020 is a registration-directed clinical trial of VS-6766 and defactinib, in patients with recurrent LGSOC.

The RAMP 201 Study is an adaptive two-part multicenter, parallel cohort, randomized, open label trial to evaluate the efficacy and safety of VS-6766 alone and in combination with defactinib in patients with recurrent LGSOC.

The first part of the study will determine the optimal regimen of either VS-6766 monotherapy or in combination with defactinib in patients with recurrent KRAS mutated and KRAS wild type LGSOC randomized 1:1 in each treatment arm.

The determination of which regimen to take forward into the expansion phase of the trial, which will enroll both KRAS mutated and KRAS wild type LGSOC, will be made based on objective response rate data.

The expansion phase of the study will examine efficacy and safety parameters of the regimen selected.

Trial enrollment is underway in the United States with European sites to follow.

Phase II Study (known as RAMP (RAF and MEK Program) 202 Study) Registration-Directed Trial of VS-6766 and Defactinib in Previously Treated KRAS Mutant NSCLC)

The RAMP 2020 Study that was initiated in December 2020 is a registration-directed clinical trial of VS-6766 and defactinib, in patients with KRAS mutant NSCLC.

The RAMP 202 study is a Phase 2, adaptive two-part multicenter, parallel cohort, randomized, open-label trial to evaluate the efficacy and safety of VS-6766 alone and in combination with defactinib in patients with KRAS mutant NSCLC, following treatment with a platinum-based regimen and immune checkpoint inhibitor.

The first part of the study will determine the optimal regimen of either VS-6766 monotherapy or in combination with defactinib in patients with KRAS-G12V mutant NSCLC randomized 1:1 in each treatment arm.

An exploratory arm of the initial phase of the study will evaluate other KRAS mutations.

The determination of which regimen to take forward into the expansion phase of the trial will be made based on data from KRAS-G12V mutant patients.

The second phase of the study will examine efficacy and safety parameters of the most effective regimen.

Phase II Study of VS-6766 Combined with Defactinib in Patients with Metastatic Uveal Melanoma

The Phase 2 IST was initiated in January 2021 and is an open-label, single arm, investigator-initiated study that is designed to assess potential efficacy, survival benefit and safety profile of the VS-6766/defactinib combination in patients with metastatic uveal melanoma.

The Phase 2 study is being led by Dr.

Takami Sato and is a single-institution study being conducted at Thomas Jefferson University Hospital.

In this study, VS-6766 is being administered at 3.2 mg twice-weekly with defactinib at 200 mg twice daily administered three out of every four weeks.

This recommended Phase 2 dose for the combination is based on the FRAME study.

COPIKTRA (duvelisib)

Our lead product, COPIKTRA (duvelisib), is the first approved oral, dual inhibitor of PI3K-delta and PI3K-gamma.

COPIKTRA received approval from the FDA on September 24, 2018 for the treatment of adult patients with relapsed or refractory CLL/SLL after at least two prior therapies and relapsed or refractory FL, after at least two prior systemic therapies.

The indication in FL is approved under accelerated approval based on overall response rate and continued approval for this indication may be contingent upon verification and description of clinical benefits in confirmatory trials.

The FDA approved labeling for COPIKTRA includes a boxed warning for four fatal and/or serious toxicities:

infections, diarrhea or colitis, cutaneous reactions, and pneumonitis.

Additionally, we have implemented an informational Risk Evaluation and Mitigation Strategy (REMS), as requested by the FDA, to support physicians in managing dosing and adverse reactions in their patients on COPIKTRA.

In addition to the boxed warning, use of COPIKTRA is also associated with adverse reactions, which may require dose reduction, treatment delay or discontinuation of COPIKTRA.

Warnings and precautions are provided in the package insert for infections, diarrhea or colitis, cutaneous reactions, pneumonitis, hepatotoxicity, neutropenia, and embryo-fetal toxicity.

The most common adverse reactions (reported in ≥20% of patients) were diarrhea or colitis, neutropenia, rash, fatigue, pyrexia, cough, nausea, upper respiratory infection, pneumonia, musculoskeletal pain, and anemia.

The approval of COPIKTRA by the FDA was based on results obtained from two FDA clinical studies –

and DYNAMO®.

The DUO study is a Phase 3, monotherapy, open-label, two-arm, randomized, superiority trial designed to evaluate the efficacy and safety of duvelisib at 25 mg BID compared to ofatumumab, a monoclonal antibody treatment, administered to patients who have been diagnosed with CLL/SLL and whose disease is relapsed or refractory.

A total of 319 patients were included in the study, of which 160 patients were treated with COPIKTRA and 159 patients were treated with ofatumumab.

Patients in DUO that continue to derive benefit remain on treatment.

DUO enrollment criteria included patients with CLL/SLL, whose disease had progressed during or relapsed after at least one previous CLL/SLL therapy.

The primary endpoint of the study was Progression-Free Survival (PFS).

The FDA and European Medicines Agency (EMA) granted orphan drug designation to duvelisib for the treatment of CLL/SLL.

The DYNAMO study is a Phase 2, open-label, single-arm monotherapy study evaluating the safety and efficacy of duvelisib dosed at 25 mg BID in 129 patients with iNHL.

Patients in DYNAMO that continue to derive a benefit remain on treatment.

DYNAMO enrollment criteria included patients with FL, the most common subtype of iNHL, marginal zone lymphoma (MZL) and SLL, whose disease is double-refractory to rituximab, an anti-CD20 monoclonal antibody, and to either chemotherapy or radioimmunotherapy and who must have progressed within six months of receiving their final dose of a previous therapy.

The primary endpoint of the study was an overall response rate (ORR) as assessed by an independent review committee (IRC) and according to the revised International Working Group (IWG) Criteria, which includes a change in target nodal lesions in combination with other measurements to determine response to treatment.

The FDA and EMA granted orphan drug designation to duvelisib for the treatment of FL.

THE COPIKTRA LABEL

The CLL/SLL indication for COPIKTRA is based on data from a subset of patients in the DUO trial who had received two or more prior lines of therapy.

These 196 patients were the majority of patients enrolled in DUO.

The sub-analysis data included in the COPIKTRA label resulted in a median PFS by central review in this population of 16.4 months for COPIKTRA vs.

9.1 months for ofatumumab with a Standard Error of 2.1 and 0.5 months, respectively.

This equates to a hazard ratio of 0.4, with a Standard Error of 0.2;

or a 60% reduction in the risk of progression or death.

Additionally, COPIKTRA achieved a 78% ORR, compared to 39% for ofatumumab –

a 39% difference, with a Standard Error of 6.4%.

Efficacy in CLL/SLL After at Least Two Prior Therapies (DUO)

Outcome per IRC

Number of events, n (%)

Progressive disease

Median PFS (SE), months a

Hazard Ratio (SE), b COPIKTRA/ofatumumab

Response Rate

Difference in ORR, % (SE)

Abbreviations:

CI = confidence interval;

CR = complete response;

IRC = Independent Review Committee;

PFS = progression-free survival;

PR = partial response;

SE = standard error

a Kaplan-Meier estimate

b Standard Error of ln(hazard ratio) = 0.2

c IWCLL or revised IWG response criteria, with modification for treatment-related lymphocytosis

Kaplan-Meier Curve of PFS per IRC In Patients with at Least 2 Prior Therapies (DUO)

Overall Response Rate (ORR) per IRC (DUO)

Lymph Node Response Rate (LNRR) per IRC (DUO)

The primary data in support of the accelerated approval in FL by the FDA in the United States was derived from updated results for the subset of follicular lymphoma patients in the DYNAMO study.

This subset of data was comprised of a pre-treated double refractory patient population with a median of 3 prior lines of therapy.

In this patient population, treatment with COPIKTRA resulted in a 42% overall response rate, with a 95% confidence interval between 31% and 54%, and a maximum duration of response up to nearly 3 and a half years as of the last data cut-off.

Based on this data, and an unmet need for additional therapy options in FL, COPIKTRA is now indicated for the treatment of U.S.

patients with relapsed or refractory FL after at least two prior systemic therapies.

Efficacy in Patients with Relapsed or Refractory FL (DYNAMO)

Duration of response

Range, months

0.0 + to 41.9 +

Patients maintaining response at 6 months, n/N (%)

Patients maintaining response at 12 months, n/N (%)

Abbreviations:

CI = confidence interval;

CR = complete response;

IRC = Independent Review Committee;

ORR = overall response rate;

PR = partial response

a Per IRC according to Revised International Working Group criteria

+ Denotes censored observation

The safety data in support of the COPIKTRA label comes from a pooled safety analysis conducted in 442 patients treated with COPIKTRA at the recommended starting dose of 25 mg BID.

The results of this analysis include all patients from the DUO and DYNAMO studies.

Most Common Adverse Reactions (≥

10% Grade ≥

3 or ≥

20% Any Grade) in Patients with B-cell Malignancies Receiving COPIKTRA

Adverse Reactions

COPIKTRA 25 mg BID (N = 442)

Grade ≥

Neutropenia †

Diarrhea or colitis †

Pneumonia †

Anemia †

Rash †

Fatigue †

Musculoskeletal pain †

Nausea †

Cough †

Upper respiratory tract infection †

Grouped term for reactions with multiple preferred terms

a Diarrhea or colitis includes the preferred terms:

colitis, enterocolitis, colitis microscopic, colitis ulcerative, diarrhea, diarrhea hemorrhagic

b Pneumonia includes the preferred terms:

All preferred terms containing "pneumonia" except for "pneumonia aspiration";

bronchopneumonia, bronchopulmonary aspergillosis

c Rash includes the preferred terms:

dermatitis (including allergic, exfoliative, perivascular), erythema (including multiforme), rash (including exfoliative, erythematous, follicular, generalized, macular & papular, pruritic, pustular), toxic epidermal necrolysis and toxic skin eruption, drug reaction with eosinophilia and systemic symptoms, drug eruption, Stevens-Johnson syndrome

Serious adverse reactions were reported in 289 patients (65%).

The most frequent serious adverse reactions that occurred were infection (31%), diarrhea or colitis (18%), pneumonia (17%), rash (5%) and pneumonitis (5%).

Based largely on the clinical results of the DUO and DYNAMO studies, the National Comprehensive Cancer Network (NCCN) added COPIKTRA to the Clinical Practice Guidelines in Oncology (NCCN Guidelines), the standard physician resource for determining the appropriate course of treatment for patients, for CLL/SLL, FL and MZL.

We believe these updated guidelines will increase awareness for COPIKTRA and help health care providers make informed decisions for patients battling these difficult to treat advanced cancers.

Phase 1/2 Study Investigating Duvelisib and Venetoclax in Patients with Relapsed or Refractory CLL/SLL

The Phase 1/2 Investigator-sponsored study, with Matthew S.

Davids, MD, Associate Director, Center for Chronic Lymphocytic Leukemia at Dana-Farber Cancer Institute, as Principal Investigator for the trial, is exploring duvelisib in combination with venetoclax in relapsed or refractory CLL/SLL.

In the study, 12 patients were enrolled and received oral duvelisib and oral venetoclax.

The primary endpoints of the study are dose limiting toxicities, maximum tolerated dose and identification of the recommended Phase 2 dose.

Secondary endpoints include pharmacokinetics and preliminary efficacy.

Duvelisib plus venetoclax demonstrated promising clinical activity, and a manageable tolerability profile, and a recommended Phase 2 dose of 400 mg of venetoclax was determined for this regimen.

Among the 12 evaluable patients, 11 achieved a response for an ORR of 92%, including four (33%) complete responses and seven (58%) partial responses.

Four patients had undetectable minimum residual disease in the peripheral blood and bone marrow, including two patients with a complete response.

The most common Grade 1 and 2 adverse events were fatigue (92%), hyperglycemia (83%), anemia (67%), and thrombocytopenia (67%).

The most common Grade ≥3 adverse events were neutropenia (84%), hypocalcemia (50%), and hypophosphatemia (25%).

No dose limiting toxicities were observed, and the recommended phase 2 dose of venetoclax was identified as 400mg once daily when given with standard dose duvelisib 25mg twice daily.

This study is now in a Phase 2 portion in CLL/SLL and Richter’s Syndrome and is currently accruing new patients.

DUVELISIB TREATMENT IN T-CELL LYMPHOMA

In a Phase 1 study published in Blood in February 2018, the ORR in patients with PTCL treated with duvelisib monotherapy (n=16) was 50%, including three complete responses and five partial responses.

Responses were seen across the spectrum of PTCL subtypes, including compete responses and partial responses in patients with enteropathy-associated T-cell lymphoma (EATL), AITL, subcutaneous panniculitis-like T-cell lymphoma (SPTCL), and anaplastic large-cell lymphoma (ALCL), among others.

DOR in the PTCL population ranged from 1.8 to 17.3 months with median PFS of 8.3 months and median overall survival of 8.4 months.

In cutaneous T-cell lymphoma (CTCL) (n=19), the ORR was 32%, with six partial responses.

DOR ranged from 0.7 to 10.1 months and median PFS was 4.5 months.

Median overall survival was not reached;

however, the estimated probability of survival was determined to be 90% at 6 months, 79% at 12 and 18 months, and 73% at 24 months.

Duvelisib monotherapy demonstrated a manageable safety profile, with results from this study consistent with the well-characterized safety profile of duvelisib monotherapy in patients with hematologic malignancies in other studies.

These clinical results were supported by preclinical findings showing that duvelisib exhibited cell-killing activity in vivo and promoted beneficial changes within the tumor microenvironment.

During the first quarter of 2018, an open-label, multicenter, Phase 2 clinical trial (PRIMO) evaluating the efficacy and safety of duvelisib in patients with relapsed or refractory PTCL was initiated.

The PRIMO study is a multi-center, open-label, registration-directed Phase 2 study evaluating duvelisib in patients with relapsed or refractory PTCL that is expected to enroll approximately 120 patients.

In the dose optimization portion of the study, patients were randomized to receive duvelisib 25mg twice daily with an option for dose escalation (cohort 1) or duvelisib 75mg twice daily continuously (cohort 2) until disease progression or unacceptable toxicity.

The primary endpoint of the study was investigator-assessed overall response rate (ORR), and secondary endpoints included DOR and safety.

Preliminary results from the Dose Optimization portion the PRIMO study were presented at the 2019 Annual Meeting of the American Society for Hematology conference (ASH 2019).

A total of 33 patients (cohort 1, n=20;

cohort 2, n=13) were treated in the dose optimization/dose selection phase.

Investigator-assessed ORRs were 35% in cohort 1 and 54% in cohort 2, with a complete response rate of 25% and 31% in cohort 1 and cohort 2, respectively.

ORR, as assessed by blinded independent central review was 40% in cohort 1 and 62% in cohort 2.

Thirteen of 20 patients in cohort 1 and all patients in cohort 2 were able to complete one cycle of therapy.

Seven patients in cohort 1 discontinued therapy early due to disease progression and/or toxicity.

Most responses were

observed at the end of cycle 1 (cycle=28 days).

At a median follow-up of 21.4 weeks, the majority of responders were still in response at the time of their last assessment.

The most common (≥

4 patients) Grade ≥3 adverse events in all patients receiving duvelisib were neutropenia, thrombocytopenia, diarrhea, rash/maculopapular, lymphocytopenia, pneumonia and sepsis.

Serious adverse events occurring in ≥

2 patients were colitis, diarrhea, abdominal pain, pyrexia, sepsis, pneumonia, hyponatremia, rash/maculopapular, dyspnea, and respiratory failure.

Based on these efficacy and safety data, the investigators have elected to investigate duvelisib starting at 75mg twice daily for two cycles, followed by 25mg twice daily, during the dose expansion portion of the study which is currently ongoing.

The expansion portion of the study is being conducted in the United States, Europe, and Japan.

During 2017, the FDA granted Fast Track designation for the treatment of patients with PTCL, who have received at least one prior therapy.

In addition, the FDA granted duvelisib orphan drug designation for the treatment of T-cell lymphoma.

DEFACTINIB and CH5126766

Defactinib is an orally available small molecule kinase inhibitor designed to inhibit FAK signaling.

Defactinib is being evaluated as a potential therapy for ovarian cancer, pancreatic cancer, mesothelioma, NSCLC, colorectal cancer, and other solid tumors.

Defactinib has orphan drug designation in ovarian cancer and mesothelioma in the United States, European Union, and Australia.

CH5126766 is an orally available unique small molecule RAF/MEK inhibitor.

Standard MEK inhibitors (e.g.

trametinib) paradoxically induce MEK phosphorylation (pMEK) by relieving ERK-dependent feedback inhibition of RAF which may limit their efficacy.

By inhibiting RAF phosphorylation of MEK, CH5126766 has the advantage of not inducing pMEK.

This unique mechanism of CH5126766 enables more effective inhibition of ERK signaling and may confer enhanced therapeutic activity against ERK-dependent, RAS or BRAF mutant tumors.

CH5126766 has been studied in over 150 patients and has shown a manageable safety profile to date.

Initial signs of activity have been observed in clinical studies as a monotherapy in KRAS mutant, NSCLC, endometrial and ovarian cancers, in BRAF mutant ovarian cancer, and in RAS mutant multiple myeloma.

Defactinib and CH5126766 have each shown independent clinical activity against RAS mutant cancers.

Phase I study (FRAME) of defactinib in combination with a dual RAF/MEK inhibitor (CH5126766) in patients with advanced solid tumors.

Defactinib has shown a high level of synergy in combination with CH5126766 in preclinical models.

A dose escalation/dose expansion study is underway to evaluate the combination of defactinib and CH5126766 in patients with advanced solid tumors, including ovarian cancer, NSCLC, and colorectal cancer.

The study was initiated in 2017 and has a planned enrollment of approximately 80 patients.

This is a multi-center study sponsored by The Institute of Cancer Research (UK) under the direction of the chief investigator Professor Udai Banerji.

There are two parts to this study:

the dose escalation phase and the expansion phase.

During the dose escalation phase, the recommended Phase 2 dose has been determined and expansion cohorts are underway.

Defactinib is generally well tolerated, and has a non-overlapping safety profile relative to CH5126766 and a manageable all-oral combination regimen has been defined.

Initial clinical data with the combination are promising for both objective response rate and durability.

We intend to explore the breadth of this combination against KRAS mutant cancers and we expect the clinical results will be reported in 2020.

FAK inhibition effects on the tumor microenvironment

The effects of FAK inhibition on the tumor microenvironment make defactinib a good candidate for combination therapy with immuno-oncology agents and other anti-cancer compounds.

FAK expression is greater in many tumor types compared to normal tissue, particularly in cancers that have a high invasive and metastatic capability.

The contact between cancer cells and connective tissue stimulates FAK signaling.

The clinical evaluation of defactinib is supported by a growing body of preclinical research suggesting that FAK inhibition, when combined with PD-1 inhibitors, increases the anti-tumor activity of these immunotherapeutic agents.

As published in the journals Cell and Nature Medicine , FAK inhibition has been shown to increase cytotoxic (CD8+) T-cells in tumors, decrease T-cell exhaustion, decrease immunosuppressive cell populations, enhance T-cell killing of tumor cells, and create a generally more favorable tumor microenvironment, which may allow for enhanced efficacy of immuno-oncology therapeutics.

Pancreatic cancer, along with other tumors such as ovarian cancer and prostate cancer, are tumor types in which immunotherapeutics have achieved limited clinical benefit, possibly due to the dense desmoplastic stroma and the abundance of immunosuppressive cells.

Preclinical research has demonstrated that high stromal density prevents anti-cancer agents and T-cells from entering pancreatic tumors thereby limiting efficacy.

In preclinical research conducted by us and others, FAK inhibition was shown to reduce stromal density and allow cytotoxic T-cells to better penetrate the tumor and kill the cancer cells.

Collectively, these data provide strong rationale for combining our FAK inhibitor with checkpoint inhibitors in the clinic for pancreatic and other solid tumors.

Phase 1/2 study with Cancer Research United Kingdom (CRUK) and Merck & Co.

to evaluate combination therapy with pembrolizumab.

In September 2016, we announced a clinical collaboration with CRUK and Merck & Co.

to evaluate defactinib in combination with pembrolizumab, a PD-1 inhibitor, in patients with NSCLC, mesothelioma, or pancreatic cancer.

Phase 1/1b study in combination with immunotherapy in pancreatic cancer.

Defactinib is in a dose escalation study in combination with Merck & Co.’s PD-1 inhibitor pembrolizumab and gemcitabine in patients with advanced pancreatic cancer.

This Phase 1 clinical trial is anticipated to enroll approximately 50 patients and is being conducted at the Washington University School of Medicine’s Division of Oncology under the direction of Andrea Wang-Gillam, M.D., Ph.D., Clinical Director of the Gastrointestinal Oncology Program.

This trial is primarily designed to evaluate the safety of the combination regimen and may also provide a greater understanding of how FAK inhibition in combination with immunotherapies could improve outcomes for patients with pancreatic cancer.

On August 10, 2020, we and Secura Bio, Inc.

(Secura) signed an Asset Purchase Agreement (Secura APA) and on September 30, 2020, the transaction closed.

Pursuant to the Secura APA, we sold our exclusive worldwide license for the research, development, commercialization, and manufacture in oncology indications of products containing duvelisib.

A detailed description of the terms and conditions of the Secura APA is contained below under the heading Licenses and Commercial Agreements .

With the transition of the duvelisib program to Secura, we are focusing our efforts on our lead product candidates, VS-6766 and defactinib.

INTELLECTUAL PROPERTY

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Moreover, many jurisdictions permit third parties to challenge issued patents in administrative proceedings, which may result in further narrowing or even cancellation of patent claims.

We cannot predict whether the patent applications we are

currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient protection from competitors.

Because patent applications in the United States and certain other jurisdictions are maintained in secrecy for 18 months or potentially even longer, and since publication of discoveries in the scientific or patent literature often lags behind actual discoveries, we cannot be certain of the priority of inventions covered by pending patent applications.

We cannot predict whether the patent applications we are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient protection from competitors.

often lags behind actual discoveries, we cannot be certain of the priority of inventions covered by pending patent applications.

Moreover, we may have to participate in interference proceedings or derivation proceedings declared by the U.S.

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Our patent portfolio includes issued and pending applications worldwide.

These patent applications fall into four categories:

(1) PI3K inhibition program;

These patent applications fall into three categories:

(1) RAF/MEK inhibition program;

(2) FAK inhibition program;

(3) RAF/MEK inhibition program and (4) other programs.

PI3K inhibition program

As previously discussed, we are currently marketing and continuing to develop the PI3K inhibitor COPIKTRA (duvelisib).

We have exclusively licensed a portfolio of patent applications owned by Intellikine LLC and Infinity Pharmaceuticals, Inc.

(Infinity), which are directed to PI3K inhibitor compounds and methods of their use, for example, in cancer.

Certain patent families are related to duvelisib.

These patent families include issued patents having claims covering duvelisib generically and specifically.

Also included are issued patents covering certain polymorphs of duvelisib.

Exemplary patents covering duvelisib, pharmaceutical compositions comprising duvelisib, methods of use, polymorphs, and methods of manufacture include US 8,193,182;

US 8,785,456, and US 9,216,982.

patents have issued and will expire between 2029 and 2032.

We have applied for patent term extension for US 8,193,182, which, if granted, will extend the term of the portion covering duvelisib to 2033.

Related issued and pending worldwide patents and patent applications with claims to duvelisib, pharmaceutical compounds, methods of use, polymorphs, and methods of manufacture are pending in about 40 countries.

Additional patent applications related to certain methods of use and combination therapies, if issued, would expire between 2029 and 2036.

and (3) other programs.

RAF/MEK inhibition program

We have exclusively licensed a portfolio of four patent families owned by Chugai Pharmaceutical Co., Ltd.

The first patent family has claims directed to the composition of matter of VS-6766, and includes granted patents in the United States, Australia, Brazil, Canada, China, Europe, Japan, Korea, Israel, and New Zealand that are expected to expire in February of 2027.

The second patent family has claims directed to methods of making VS-6766 and includes granted patents in Europe, Japan, and the United States that are expected to expire in September of 2032.

The third patent family has claims directed to a dosing protocol of VS-6766, and includes pending patent applications in the United States, Australia, Brazil, Canada, China, Europe, Japan, Korea, India, Mexico, Singapore, Taiwan, and Russia.

Patent applications in this family, if issued, would be expected to expire in May of 2038.

The fourth patent family covers a method of using VS-6766 in combination with a FAK inhibitor, such as defactinib, for treating a patient, and is pending in Japan and Taiwan and as an international application.

patents that will issue in this family will have a statutory expiration date in September of 2040.

In addition to the issued and pending patent applications exclusively licensed from Chugai, we own three patent families covering methods of using a MEK inhibitor for treating a patient.

The first patent family covers a method of using a MEK inhibitor in combination with a G12C inhibitor for treating a patient, and is pending as an international application.

patents that will issue in this family will have a statutory expiration date in January of 2041.

We have two families covering a method of using a MEK inhibitor to treat a patient with certain mutations and a method of using a MEK inhibitor in combination with another therapeutic agent for treating a patient, which are pending as provisional patent applications.

patents that will issue in the two families will have a statutory expiration date in April of 2041 and July of 2041.

FAK inhibition program

We are also currently developing the FAK inhibitor defactinib.

We have exclusively licensed a portfolio of patent applications owned by Pfizer, Inc.

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Also included are issued and pending patent applications having claims directed to methods of treatment and methods of making defactinib.

For example, US 8,440,822 covers methods of making defactinib.

For example, US 8,440,822 and US 10,450,297 cover methods of making defactinib.

patents that have issued or will issue in this family will have a statutory expiration date in April of 2028.

Related cases are pending worldwide, including for example in Europe, Brazil, Thailand, Hong Kong, and India, and granted in Australia, Mexico, Canada, China, Korea, Israel, New Zealand, South Africa, Singapore, Taiwan, and Japan.

Related cases are pending worldwide, including for example in Thailand, and granted in Australia, Europe, Brazil, Mexico, India, Hong Kong, Canada, China, Korea, Israel, New Zealand, South Africa, Singapore, Taiwan, and Japan.

In addition to the issued and pending patent applications exclusively licensed from Pfizer, we own three patent families covering defactinib.

One family is directed to compositions (e.g., oral dosage forms) of defactinib and certain methods of use.

patents that will issue in this family will have a statutory expiration date in January of 2035.

The other two families are directed to methods of using a FAK inhibitor in combination with another agent, such as defactinib in combination with a MEK inhibitor for treating a patient or defactinib in combination with an immunotherapeutic agent.

patents that will issue in these families will have a statutory expiration date in February of 2035 and June of 2036

patents that have issued or will issue in this family will have a statutory expiration date in January of 2035.

Patent applications in this family are pending worldwide, including for example in the United States, Thailand, New Zealand, Mexico, Brazil, Korea, Israel, Hong Kong, Canada, Europe, and China, and granted in Australia, Japan, Singapore, and South Africa.

The second family is directed to methods of using a FAK inhibitor in combination with another agent, such as defactinib in combination with a MEK inhibitor for treating a patient.

patents that will issue in this family will have a statutory expiration date in February of 2035.

Patent applications in this family are pending worldwide, including for example in Japan, and granted in the United States, Hong Kong, and Europe.

The third family is directed to methods of using a FAK inhibitor, such as defactinib, in combination with an immunotherapeutic agent.

patents that have issued or will issue in

this family will have a statutory expiration date in June of 2036.

Patent applications in this family are pending worldwide, including for example in Australia, Europe, South Africa, New Zealand, Brazil, Eurasia, Korea, Singapore, Israel, Canada, Mexico, Japan, Hong Kong, and China, and granted in the United States.

Our licensed portfolio of patent applications from Pfizer also includes four families of patent applications directed to VS- 6062 and related methods of use.

The patent families include issued and pending patent applications having claims directed to VS- 6062, methods of manufacture, and pharmaceutical salts.

Patents have issued in these families in the U.S.

that will expire in December of 2023, April of 2025, and November of 2028, respectively.

Patents have issued in these families in the United States that will expire in December of 2023, April of 2025, and November of 2028, respectively.

Related cases have been granted worldwide, including for example in Australia, Canada, China, Japan, and Europe.

RAF/MEK inhibition program

We have exclusively licensed a portfolio of three patent families owned by Chugai Pharmaceutical Co., Ltd.

The first patent family has claims directed to the composition of matter of CH5126766, and includes granted patents in the United States, Australia, Canada, China, Europe and Japan, that are expected to expire in February 2027.

The second patent family has one pending international application with claims directed to a dosing protocol of CH5126766.

Any patent application claiming priority to or the benefit of this international patent application, if issued, would be expected to expire in May 2038.

The third patent family has claims directed to method of making CH5126766 and includes granted patents in Europe, Japan, and the United States that are expected to expire in September 2032.

Stanford University has an option to certain United States rights in VS-6062.

Other programs

We also own one patent family covering a method of treating a patient having a cytokine release syndrome using a PI3K inhibitor, which is pending as a provisional patent application.

patents that will issue in this family will have a statutory expiration date in April 2041.

The base term of a U.S.

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Some foreign jurisdictions, including Europe and Japan, have analogous patent term extension provisions, which allow for extension of the term of a patent that covers a drug approved by the applicable foreign regulatory agency.

As stated above, we have applied for patent term extension for US 8,193,182, which, if granted, will extend the term of the portion covering duvelisib to 2033.

Infinity Pharmaceuticals, Inc.

In November 2016, we entered into an amended and restated license agreement with Infinity, under which we acquired an exclusive worldwide license for the research, development, commercialization, and manufacture of products in oncology indications containing duvelisib.

In connection with the license agreement, we assumed operational and financial responsibility for certain activities that were part of Infinity’s duvelisib program, including the DUO study for patients with relapsed/refractory CLL/SLL, and Infinity maintained a portion of the financial responsibility for the shutdown of certain other clinical studies.

We are obligated to use diligent efforts to develop and commercialize a product in an oncology indication containing duvelisib.

As previously discussed, COPIKTRA was approved by the FDA on September 24, 2018 and is now indicated for the treatment of adult patients with relapsed or refractory CLL/SLL after at least two prior therapies and relapsed or refractory FL after at least two prior systemic therapies.

During the term of the license agreement, Infinity has agreed not to research, develop, manufacture or commercialize duvelisib in any other indication in humans or animals.

Pursuant to the terms of the license agreement, we are required to make the following payments to Infinity in cash or, at our election, in whole or in part, in shares of our common stock:

(i) $6.0 million upon the completion of the DUO study if the results of the study meet certain pre-specified criteria, which was paid in cash by us to Infinity in October 2017, and (ii) $22.0 million upon the approval of a New Drug Application (NDA) in the United States or an application for marketing authorization with a regulatory authority outside of the United States for a product in an oncology indication containing duvelisib, which was paid in cash by us to Infinity in November 2018.

Pursuant to the license agreement, we are obligated to pay Infinity royalties on worldwide net sales of any products in an oncology indication containing duvelisib ranging from the mid-single digits to the high single digits.

The royalties will expire on a product-by-product and country-by-country basis until the latest to occur of (i) the last-to-expire patent right covering the applicable product in the applicable country, (ii) the last-to-expire patent right covering the manufacture of the applicable product in the country of manufacture of such product, (iii) the expiration of non-patent regulatory exclusivity in such country and (iv) ten years following the first commercial sale of a product in a country, provided that if royalties on net sales for a product in the United States are payable solely on the basis of non-patent regulatory exclusivity, the applicable royalty on net sales for such product in the United States will be reduced by 50%.

The royalties are also subject to reduction by 50% of certain third-party royalty payments or patent litigation damages or settlements which might be required to be paid by us if litigation were to arise, with any such reductions capped at 50% of the amounts otherwise payable during the applicable royalty payment period.

In addition to the foregoing, we are obligated to pay Infinity an additional royalty of 4% on worldwide net sales of any products in an oncology indication containing duvelisib to cover the reimbursement of research and development costs owed by Infinity to Mundipharma International Corporation Limited (MICL) and Purdue Pharmaceutical Products L.P.

Once Infinity has fully reimbursed MICL and Purdue, the royalty obligations will be reduced to 1% of net sales in the United States.

These trailing MICL royalties are payable until the later to occur of the last-to-expire of specified patent rights and the expiration of non-patent regulatory exclusivities in a country.

Each of the above royalty rates is reduced by 50% on a product-by-product and country-by-country basis if the applicable royalty is payable solely on the basis of non-patent regulatory exclusivity.

In addition, the trailing MICL royalties are subject to reduction by 50% of certain third-party royalty payments or patent litigation damages or settlements which might be required to be paid by us if litigation were to arise, with any such reductions capped at 50% of the amounts otherwise payable during the applicable royalty payment period.

On March 5, 2019, Infinity and Healthcare Royalty Partners III, L.P.

(HCR) entered into a purchase and sale agreement, in which HCR paid Infinity a $30.0 million upfront payment and is entitled to receive up to $20.0 million in potential milestone payments from Infinity.

In exchange HCR has received the right to receive the royalties due to Infinity from us under the license agreement.

As a result, we now pay royalties previously due to Infinity to HCR.

We will continue to pay Infinity for the royalties due to MICL and Purdue described above.

Yakult Honsha Co., Ltd.

On June 5, 2018, we entered into a license and collaboration agreement (the Yakult Agreement) with Yakult Honsha Co., Ltd.

(Yakult), under which we granted exclusive rights to Yakult to develop and commercialize products containing duvelisib in Japan for the treatment, prevention, palliation or diagnosis of all oncology indications in humans or animals.

Under the terms of the Yakult Agreement, Yakult received an exclusive right to develop and commercialize products containing duvelisib in Japan under mutually agreed development and commercialization plans at its own cost and expense.

Yakult also received certain limited manufacturing rights in the event that we are unable to manufacture or supply sufficient quantities of duvelisib or products containing duvelisib to Yakult during the term of the Yakult Agreement.

We retained all rights to duvelisib outside of Japan.

Yakult paid us an upfront, non-refundable payment of $10.0 million in June 2018.

We are also entitled to receive aggregate payments of up to $90.0 million if certain development, regulatory and commercial milestones are successfully achieved.

Yakult is obligated to pay us a double-digit royalty on net sales of products containing duvelisib in Japan, subject to reduction in certain circumstances, and to fund certain global development costs related to worldwide clinical trials conducted by us in which Yakult has opted to participate (Global Clinical Trials) on a pro-rata basis.

Unless earlier terminated by either party, the Yakult Agreement will expire upon the fulfillment of Yakult’s royalty obligations to us for the sale of any products containing duvelisib in Japan, which royalty obligations expire, on a product-by-product basis, upon the last to occur of (a) expiration of valid claims covering such product, (b) expiration of regulatory exclusivity for such product or (c) 10 years from first commercial sale of such product.

Yakult may terminate the Yakult Agreement in its entirety at any time with 180 days’

written notice.

Either party may terminate the Yakult Agreement in its entirety with 60 days’

written notice for the other party’s material breach if such party fails to cure the breach.

We may terminate the Yakult Agreement if (i) Yakult fails to use commercially reasonable efforts to develop and commercialize products containing duvelisib in Japan or (ii) Yakult challenges any patent licensed by us to Yakult under the Yakult Agreement.

Either party may terminate the Yakult Agreement in its entirety upon certain insolvency events involving the other party.

CSPC Pharmaceutical Group Limited (CSPC)

On September 25, 2018, we entered into a license and collaboration agreement with CSPC (the CSPC Agreement), under which we granted exclusive rights to CSPC to develop and commercialize products containing duvelisib in the People’s Republic of China (China), Hong Kong, Macau and Taiwan (collectively, the CSPC Territory) for the treatment, prevention, palliation or diagnosis of all oncology indications in humans.

Under the terms of the CSPC Agreement, CSPC received an exclusive right to develop and commercialize products containing duvelisib in the CSPC Territory under mutually agreed upon development and commercialization plans at its own cost and expense.

CSPC also received certain limited manufacturing rights in the event that we are unable to manufacture or supply sufficient quantities of duvelisib or products containing duvelisib to CSPC during the term of the CSPC Agreement.

We retained all rights to duvelisib outside of the CSPC Territory.

CSPC paid us an aggregate upfront, non-refundable payment of $15.0 million, $5.0 million of which had already been paid by CSPC as a non-refundable exclusivity fee.

We are also entitled to receive aggregate payments of up to $160.0 million if certain development, regulatory and commercial milestones are successfully achieved.

CSPC is obligated to pay us a double-digit royalty on net sales of products containing duvelisib in the CSPC Territory, subject to reduction in certain circumstances, and to fund certain global development costs related to worldwide clinical trials conducted by us in which CSPC has opted to participate (Global Clinical Trials) on a pro-rata basis.

Unless earlier terminated by either party, the CSPC Agreement will expire upon the fulfillment of CSPC’s royalty obligations to us for the sale of any products containing duvelisib in the CSPC Territory, which royalty obligations expire, on a product-by-product basis, upon the last to occur of (a) expiration of valid claims covering such product, (b) expiration of regulatory exclusivity for such product or (c) 10 years from first commercial sale of such product.

CSPC may terminate the CSPC Agreement in its entirety at any time with 180 days’

written notice.

Either party may terminate the CSPC Agreement in its entirety with 60 days’

written notice for the other party’s material breach if such party fails to cure the breach.

We may terminate the CSPC Agreement if (i) CSPC fails to use commercially reasonable efforts to develop and commercialize products containing duvelisib in the CSPC Territory or (ii) CSPC challenges any patent licensed by us to CSPC under the CSPC Agreement.

Either party may terminate the CSPC Agreement in its entirety upon certain insolvency events involving the other party.

On July 25, 2019, we entered into a license and collaboration agreement with Sanofi (the Sanofi Agreement), under which we granted exclusive rights to Sanofi to develop and commercialize products containing duvelisib in Russia, the Commonwealth of Independent States (CIS), Turkey, the Middle East and Africa (collectively the “Sanofi Territory”) for the treatment, prevention, palliation or diagnosis of any oncology indication in humans or animals.

Under the terms of the Sanofi Agreement, Sanofi received the exclusive right to develop and commercialize products containing duvelisib in the Sanofi Territory under mutually agreed upon development and commercialization plans at Sanofi’s own cost and expense.

In addition, Sanofi received certain limited manufacturing rights in the event the Company is unable to manufacture or supply sufficient quantities of duvelisib or products containing duvelisib to Sanofi during the term of the Sanofi Agreement.

We retained all rights to duvelisib outside the Sanofi Territory, except for those territories previously and exclusively licensed to other parties.

Sanofi paid us an upfront, non-refundable payment of $5.0 million in August 2019.

We are also entitled to receive aggregate payments of up to $42.0 million if certain regulatory and commercial milestones are successfully achieved.

Sanofi is obligated to pay us double-digit royalties on net sales of products containing duvelisib in the Sanofi Territory, subject to reduction in certain circumstances.

Sanofi and we have made customary representations and warranties and have agreed to certain customary covenants, including confidentiality and indemnification.

Unless earlier terminated by either party, the Sanofi Agreement will expire upon the fulfillment of Sanofi’s royalty obligations to us for the sale of any products containing duvelisib in the Sanofi Territory, which royalty obligations expire, on a product-by-product and country-by-country basis, upon the last to occur, in each specific country, of (a) expiration of valid patent claims covering such product, (b) expiration of regulatory exclusivity for such product or (c) 10 years from the first commercial sale of such product in such country.

Sanofi may terminate the Sanofi Agreement on a product-by-product basis or on a country-by country basis at any time with 180 days’

written notice.

Either party may terminate the Sanofi Agreement in its entirety with 60 days’

written notice for the other party’s material breach if such party fails to cure the breach.

Subject to certain limitations, we may terminate the Sanofi Agreement immediately if Sanofi challenges any patent covering a product or compound licensed by the Company to Sanofi under the Sanofi Agreement.

We also have the right to terminate Sanofi’s rights to products containing duvelisib in any specific country if Sanofi fails to use certain efforts to develop and commercialize products containing duvelisib in such country.

Either party may terminate the Sanofi Agreement in its entirety upon certain insolvency events involving the other party.

On July 11, 2012, we entered into a license agreement (the Pfizer Agreement) with Pfizer under which Pfizer granted us worldwide, exclusive rights to research, develop, manufacture and commercialize products containing certain of Pfizer’s inhibitors of FAK, including defactinib, for all therapeutic, diagnostic and prophylactic uses in humans.

LICENSES AND COMMERCIAL AGREEMENTS

On August 10, 2020, we and Secura signed the Secura APA and on September 30, 2020, the transaction closed.

Pursuant to the Secura APA, we sold to Secura our exclusive worldwide license for the research, development, commercialization, and manufacture in oncology indications of products containing duvelisib.

The sale included certain intellectual property related to duvelisib in oncology indications, certain existing duvelisib inventory, claims and rights under certain contracts pertaining to duvelisib.

Pursuant to the Secura APA, Secura assumed all operational and financial responsibility for activities that were part of the duvelisib oncology program, including all commercialization efforts related to duvelisib in the United States and Europe, as well as our ongoing duvelisib clinical trials.

Further, Secura assumed all obligations with existing collaboration partners developing and commercializing duvelisib, which include Yakult Honsha Co., Ltd.

(Yakult), CSPC Pharmaceutical Group Limited (CSPC), and Sanofi.

Additionally, Secura assumed all royalty payment obligations due under the amended and restated license agreement with Infinity Pharmaceuticals, Inc.

Pursuant to the terms of the Secura APA, Secura has paid us an up-front payment of $70.0 million, and has agreed to pay us (i) regulatory milestone payments up to $45.0 million, consisting of a payment of $35.0 million upon receipt of regulatory approval of COPIKTRA in the United States for the treatment of peripheral T-cell lymphoma (PTCL) and a payment of $10.0 million upon receipt of the first regulatory approval for the commercial sale of COPIKTRA in the European Union for the treatment of PTCL, (ii) sales milestone payments of up to $50.0 million, consisting of $10.0 million when total worldwide net sales of COPIKTRA exceed $100.0 million, $15.0 million when total worldwide net sales of COPIKTRA exceed $200.0 million and $25.0 million when total worldwide net sales of COPIKTRA exceed $300.0 million, (iii) low double-digit royalties on the annual aggregate net sales above $100.0 million in the United States, European Union, and the United Kingdom of Great Britain and Northern Ireland and (iv) 50% of all royalty, milestone and sublicense revenue payments payable to Secura under our existing license agreements with Sanofi, Yakult, and CSPC, and 50% of all royalty, and royalty payments payable to Secura under any license or sublicense agreement entered into by Secura in certain jurisdictions.

Secura’s royalty obligations remain in effect on a country-by-country basis upon the last to occur (a) 10 years from the first commercial sale of product containing duvelisib in such country or (b) the expiration of all valid patent claims covering products containing duvelisib in such country.

In connection with the Secura APA, we and Secura entered into a transition services agreement (Secura TSA).

Under the terms of the Secura TSA, we will provide certain support functions at Secura’s directions for a term of less than one year from the date of execution, unless earlier terminated or extended according to the terms of the Secura TSA.

Services performed are paid at a mutually agreed upon rate.

Chugai Pharmaceutical Co., Ltd.

On January 7, 2020, we entered into a license agreement with Chugai (the Chugai Agreement) whereby Chugai granted us an exclusive worldwide license for the development, commercialization and manufacture of products containing VS-6766.

Under the terms of the Chugai Agreement, we received an exclusive right to develop and commercialize products containing VS-6766 at our own cost and expense.

In February 2020, we paid Chugai a non-refundable payment of $3.0 million.

We are further obligated to pay Chugai double-digit royalties on net sales of products containing VS-6766, subject to reduction in certain circumstances.

Chugai also obtained opt back rights to develop and commercialize VS-6766 (a) in the European Union, which option may be exercised through the date we submit a NDA to the FDA for a product which contains VS-6766 as the sole active pharmaceutical ingredient and (b) in Japan and Taiwan, which option may be exercised through the date we receive marketing authorization from the FDA for a product which contains VS-6766as the sole active pharmaceutical ingredient.

As consideration for executing either option, Chugai would have to make a payment to us calculated on the Company’s development costs to date.

Chugai and we have made customary representations and warranties and have agreed to certain customary covenants, including confidentiality and indemnification.

Unless earlier terminated, the Chugai Agreement will expire upon the fulfillment of our royalty obligations to Chugai for the sale of any products containing the VS-6766, which royalty obligations expire on a product-by-product and country-by-country basis, upon the last to occur, in each specific country, of (a) expiration of valid patent claims covering such product or (b) 12 years from the first commercial sale of such product in such country.

We may terminate the Chugai Agreement upon 180 days’ written notice.

Subject to certain limitations, Chugai may terminate the Chugai Agreement upon written notice if we challenge any patent licensed by Chugai to us under the Chugai Agreement.

Either party may terminate the license agreement in its entirety with 120 days’ written notice for the other party’s material breach if such party fails to cure the breach.

Either party may also terminate the Chugai Agreement in its entirety upon certain insolvency events involving the other party.

containing certain of Pfizer’s inhibitors of FAK, including defactinib, for all therapeutic, diagnostic and prophylactic uses in humans.

We have the right to grant sublicenses under the foregoing licensed rights, subject to certain restrictions.

We are solely responsible, at our own expense, for the clinical development of these products, which is to be conducted in accordance with an agreed- upon development plan.

We are also responsible for all

manufacturing and commercialization activities at our own expense.

We are also responsible for all manufacturing and commercialization activities at our own expense.

Pfizer provided us with an initial quantity of clinical supplies of one of the products for an agreed upon price.

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If the Pfizer Agreement is terminated by either party for any reason, worldwide rights to the research, development, manufacture and commercialization of the products revert back to Pfizer.

Chugai Pharmaceutical Co., Ltd.

On January 7, 2020, we entered into a license agreement with Chugai (the Chugai Agreement) ) whereby Chugai granted us an exclusive worldwide license for the development, commercialization and manufacture of products containing CH5126766, a dual RAF/MEK inhibitor.

Under the terms of the Chugai Agreement, we received an exclusive right to develop and commercialize products containing CH5126766 at our own cost and expense.

We are required to pay Chugai a non-refundable payment of $3.0 million which was paid in February 2020.

We are further obligated to pay Chugai double-digit royalties on net sales of products containing CH5126766, subject to reduction in certain circumstances.

Chugai also obtained opt back rights to develop and commercialize CH5126766 (a) in the European Union, which option may be exercised through the date we submit a NDA to the FDA for a product which contains CH5126766 as the sole active pharmaceutical ingredient and (b) in Japan and Taiwan, which option may be exercised through the date we receive marketing authorization from the FDA for a product which contains CH5126766 as the sole active pharmaceutical ingredient.

As consideration for executing either option, Chugai would have to make a payment to us calculated on the Company’s development costs to date.

Chugai and we have made customary representations and warranties and have agreed to certain customary covenants, including confidentiality and indemnification.

Unless earlier terminated, the Chugai Agreement will expire upon the fulfillment of our royalty obligations to Chugai for the sale of any products containing the CH5126766, which royalty obligations expire on a product-by-product and country-by-country basis, upon the last to occur, in each specific country, of (a) expiration of valid patent claims covering such product or (b) 12 years from the first commercial sale of such product in such country.

We may terminate the Chugai Agreement upon 180 days’

written notice.

Subject to certain limitations, Chugai may terminate the Chugai Agreement upon written notice if we challenge any patent licensed by Chugai to us under the Chugai Agreement.

Either party may terminate the license agreement in its entirety with 120 days’

written notice for the other party’s material breach if such party fails to cure the breach.

Either party may also terminate the Chugai Agreement in its entirety upon certain insolvency events involving the other party.

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products.

While we believe that our technology, development experience and scientific knowledge provide us with competitive advantages, we face potential

competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions and governmental agencies and public and private research institutions.

While we believe that our technology, development experience and scientific knowledge provide us with competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions and governmental agencies and public and private research institutions.

Any product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.

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In addition, our ability to compete may be affected in many cases by insurers or other third- party payors seeking to encourage the use of generic products.

There are many generic products currently on the market for the indications that we are pursuing, and additional products are expected to become available on a generic basis over the coming years.

There are many generic products currently on the market for the indications that we are pursuing, and additional

products are expected to become available on a generic basis over the coming years.

If our therapeutic product candidates are approved, we expect that they will be priced at a significant premium over competitive generic products.

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As a result, they may provide significant competition for any of our product candidates for which we obtain market approval.

Our competitors may commence and complete clinical testing of their product candidates, obtain regulatory approvals and begin commercialization of their products sooner than we may for our own product candidates.

These competitive products may have superior safety or efficacy, or be manufactured less expensively, than our product candidates.

If we are unable to compete effectively against these companies on the basis of safety, efficacy or cost, then we may not be able to commercialize our product candidates or achieve a competitive position in the market.

This would adversely affect our business.

PI3K inhibition program

We believe that the following companies, among others, have developed or are in the clinical stage of development of compounds targeting the PI3K signaling pathway:

Gilead Sciences, Inc., which has received approval from the FDA of idelalisib for the treatment of patients with CLL, SLL, or FL;

Bayer AG, which has received approval from the FDA of copanlisib for the treatment of patients with relapsed FL and which we believe has ongoing Phase 1/2 and Phase 3 trials of copanlisib;

AstraZeneca, which we believe is conducting Phase 1 and Phase 2 clinical trials of ACP-319;

TG Therapeutics, Inc., which we believe is conducting multiple clinical trials of umbralisib;

Incyte Corporation, which we believe is conducting a Phase 1 and 2 clinical trials of parsaclisib;

MEI Pharma, which we believe is conducting Phase 1b and Phase 2 clinical trials of ME-401;

Rhizen Pharmaceuticals, which we believe is conducting Phase 1 and Phase 2 clinical trials for tenalisib;

Hutchison MediPharma, which we believe is conducting Phase 1 and Phase 2 clinical trials for HMPL-689;

Shanghai Yingli Pharmaceutical Co., which we believe is conducting Phase 1 and Phase 2 clinical trials for linperlisib.

In addition, many companies are developing product candidates directed to disease targets such as Bruton’s Tyrosine Kinase (BTK), B-cell lymphoma 2 (BCL-2), B-lymphocyte antigen CD-19, programmed death 1/ligand 1 (PD-1/PD-L1), Enhancer of Zeste Homolog 2 (EZH2), Cluster of Differentiation 79B antibody-drug conjugate (CD79B ADC), anti-CD-47, CD20xCD3 bi-specific antibodies, Janus Kinase (JAK), and pleiotropic pathways in the fields of hematology-oncology, including in the specific diseases for which we are currently developing duvelisib, or for which we may develop duvelisib or other drug candidates in the future.

Such companies include:

Pharmacyclics LLC, a wholly-owned subsidiary of AbbVie, through its collaboration with Janssen Biotech, which has received approval from the FDA of ibrutinib, a BTK inhibitor, for the treatment of patients with mantle cell lymphoma (MCL), CLL, MZL, SLL, and Waldenström’s macroglobulinemia, and is conducting multiple late stage clinical studies of ibrutinib in additional hematologic malignancies;

AbbVie, through its collaboration with Roche, which has received approval from the FDA of venetoclax, a BCL-2 inhibitor, for the treatment of patients with CLL, and is conducting multiple late stage clinical studies of venetoclax in additional hematologic malignancies;

Celgene Corporation (a BMS company), which has received FDA approval of lenalidomide, an immunomodulator, for the treatment of patients with multiple myeloma, MCL, and myelodyplastic syndromes, and is conducting late stage clinical studies of lenalidomide in additional hematologic malignancies;

we also believe that Celgene is conducting a Phase 1 clinical trial of CC-292, a BTK inhibitor, in patients with CLL;

AstraZeneca, which we believe is conducting a Phase 3 clinical trial of acalabrutinib (ACP-196), a BTK inhibitor, in patients with CLL;

Beigene, which we believe is conducting Phase 3 trials of zanubrutinib, a BTK inhibitor, in patients with CLL;

Epizyme, which has submitted a NDA for tazemetostat (EZH2i) for the treatment of patients with FL;

Bristol Myers Squibb, which we believe is conducting Phase 1 and Phase 2 trials of liso-cel (CD-19 CAR T).

FAK and RAF/MEK inhibition programs

FAK inhibition program

There are other companies working to develop therapies to treat cancer including some who also target the tumor microenvironment.

These companies include divisions of large pharmaceutical companies including Astellas Pharma Inc., Celgene Corporation, Sanofi‑Aventis U.S.

LLC, GlaxoSmithKline plc, Boehringer Ingelheim GmbH, Pfizer Inc.

RAF/MEK inhibition program

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Such companies include:

Novartis AG, which has received FDA approval for dabrafenib, a RAF inhibitor, in combination with trametinib, a MEK inhibitor, for treatment of patients with unresectable or metastatic melanoma with BRAF V600E or V600K mutations, adjuvant treatment for melanoma with BRAF V600E or V600K mutations and involvement of lymph nodes following complete resection, metastatic NSCLC with BRAF V600E or V600K mutations and locally advanced or metastatic anaplastic thyroid cancer with BRAF V600E mutation;

Pfizer, through its acquisition of Array BioPharma, Inc, has received FDA approval for encorafenib, a RAF inhibitor, in combination with binimetinib, a MEK inhibitor, for treatment of patients with unresectable or metastatic melanoma with a BRAF V600E or V600K mutation;

● Novartis AG, which has received FDA approval for dabrafenib (Taflinar), a RAF inhibitor, in combination with trametinib (Mekinist), a MEK inhibitor, for treatment of patients with unresectable or metastatic melanoma with BRAF V600E or V600K mutations, adjuvant treatment for melanoma with BRAF V600E or V600K mutations and involvement of lymph nodes following complete resection, metastatic NSCLC with BRAF V600E or V600K mutations and locally advanced or metastatic anaplastic thyroid cancer with BRAF V600E mutation;

● Pfizer, through its acquisition of Array BioPharma, Inc, has received FDA approval for encorafenib (Braftovi), a RAF inhibitor, in combination with binimetinib (Mektovi), a MEK inhibitor, for treatment of patients with unresectable or metastatic melanoma with a BRAF V600E or V600K mutation.

In addition, the FDA has granted approval for encorafenib (Braftovi) in combination with cetuximab (Erbitux), an anti-EGFR antibody for treatment of adult patients with metastatic CRC with a BRAF V600E mutation;

● Genentech, Inc.

a member of the Roche Company, which has received FDA approval for vemurafenib, a RAF inhibitor, in combination with cobimetinib, a MEK inhibitor, to treat patients with unresectable or metastatic melanoma with a BRAF V600E or V600K mutation;

FAK and RAF/MEK Combination

There are other companies working to develop therapies against KRAS-mutant cancers.

We believe the following companies have ongoing phase 2 trials for treatment of patients with KRAS-mutant cancers:

(AMG-510) Mirati Therapeutics, Inc.

(MTRX-849), Eli Lily and Company (LY-3499446), and Silenseed LTD (siG12D LODER).

● AstraZeneca and Merck & Co., Inc.

has received FDA approval for selumetinib, a MEK inhibitor, for the treatment of pediatric patients two years of age and older with neurofibromatosis type 1 (NF1) who have symptomatic inoperable plexiform neurofibromas.

FAK inhibition program

There is a company, InxMed, developing a FAK small molecule inhibitor program.

We believe InxMed is conducting phase 1 clinical trials of their product candidate IN10018.

RAS Pathway Inhibitors

There are other companies working to develop therapies to target the RAS pathway.

We believe the following companies, among others, have developed or in the clinical stage of development of compounds targeting the RAS pathway:

● Amgen Inc., which we believe is conducting Phase 2 and Phase 3 clinical trials of sotorasib, formerly called AMG 510;

● Mirati Therapeutics, Inc., which we believe is conducting Phase 2 and Phase 3 clinical trials of adagrasib (MTRX-849);

● Revolution Medicines, Inc., which we believe is conducting Phase 2 clinical trial of RMC-4630 in collaboration with Sanofi and a Phase 1 clinical trial of RMC-5552;

● Relay Therapeutics, Inc., which we believe is conducting a Phase 1 clinical trial of RLY-1971;

● Boehringer Ingelheim, which we believe is conducting a Phase 1 clinical trial of BI 1701963;

● Moderna, Inc., which we believe is conducting a Phase 1 clinical trial of mRNA-5671.

In addition to companies that have inhibitors addressing our targets of interest, our competition also includes hundreds of private and publicly traded companies that operate in the area of oncology but have therapeutics with different mechanisms of action.

The oncology market in general is highly competitive, with over 1,000 molecules currently in clinical development.

MANUFACTURING

We contract with third parties for the manufacture of COPIKTRA for commercial and clinical use and for the manufacture of our product candidates for preclinical studies and clinical trials, and we intend to continue to do so in the future.

We currently work with two contract manufacturing organizations (CMO) for the production of duvelisib raw materials, one CMO for the production of duvelisib drug substance, one CMO for the production of duvelisib drug product, and one CMO for the final commercial and clinical packaging.

We have long-term supply agreements in place with each of these CMOs.

We are currently evaluating a second source supplier program for the production of duvelisib drug substance and drug product.

For defactinib, we have one CMO for the manufacture of drug product, one CMO for the production of drug substance, and one CMO for drug packaging.

We obtain drug substance, drug product and packaging services from these manufacturers on a purchase order basis.

We may elect to pursue relationships with other CMOs for manufacturing clinical supplies for later-stage clinical trials and for commercialization.

We contract with third parties for the manufacture of our product candidates for preclinical studies and clinical trials, and we intend to continue to do so in the future.

We currently work with one contract manufacturing organization (CMO) for the manufacture of VS-6766 drug product, one CMO for the production of VS-6766 drug substance, and one CMO for VS-6766 drug packaging/labelling.

For defactinib, we currently have one CMO for the manufacture of drug product, one CMO for the production of drug substance, and one CMO for drug packaging /labelling.

We have development agreements in place with these CMOs and we obtain drug substance, drug product and packaging/labelling services from these CMOs on a purchase order basis.

We may elect to pursue relationships with other CMOs for manufacturing of drug product, drug substance and packaging/labelling for later-stage clinical trials, commercialization or for risk management.

We do not own or operate, and currently have no plans to establish, any manufacturing facilities.

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We select compounds not only on the basis of their potential efficacy and safety, but also for their ease of synthesis and the reasonable cost of their starting materials.

We expect to continue to develop drug candidates that can be produced cost‑effectively at third‑party manufacturing facilities.

COMMERCIAL STRATEGY

We intend to develop and commercialize our drugs in the U.S., Canada and the European Union alone or with partners, and expect to rely on partners to develop and commercialize our drugs in other territories throughout the world.

On September 24, 2018, our first commercial product, COPIKTRA, was approved by the FDA for the treatment of patients with hematologic cancers including relapsed and refractory CLL/SLL and FL.

We sell COPIKTRA to a limited number of specialty pharmacies and specialty distributors in the United States.

These customers subsequently resell COPIKTRA either directly to patients, or to community hospitals or oncology clinics with in-office dispensaries who in turn distribute COPIKTRA to patients.

In the U.S., our sales team promotes our commercial product for its approved indications through direct field contact with physicians, hospitals, clinics and other healthcare providers.

None of our product candidates have received regulatory approval for commercial sale in territories outside of the United States.

As set forth above, we have entered into agreements with third-party partners for the development and commercialization of duvelisib in territories outside of the United States and have agreed to manufacture or supply quantities of our product candidate in conjunction with these efforts.

We continue to evaluate opportunities and potential partnerships to develop and commercialize duvelisib in territories outside the United States.

In executing these arrangements, our goal is to retain significant worldwide oversight over the development process and commercialization of our products by playing an active role in their commercialization or finding partners who share our vision, values, culture and processes.

We expect to continue to develop drug candidates that can be produced cost-effectively at third-party CMOs.

APPLICABLE LAWS AND GOVERNMENT REGULATION

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In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (FDCA) and implementing regulations.

The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and

financial resources.

Failure to comply with the applicable United States requirements at any time during the product development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending applications, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters, product recalls, product seizures, total or partial suspension of production or distribution injunctions, fines, refusals of government contracts, restitution, disgorgement of profits or civil or criminal penalties.

The process required by the FDA before a drug may be marketed in the United States generally involves the following:

completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice (GLP) regulations;

● completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice (GLP) regulations;

● submission to the FDA of an investigational new drug (IND) application, which must become effective before human clinical trials may begin;

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● satisfactory completion of an FDA advisory committee review, if applicable;

satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with current good manufacturing practices (cGMP) requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

● satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with current good manufacturing practices (cGMP) requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

● FDA review and approval of the NDA.

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Preclinical studies include laboratory evaluation of product chemistry and formulation, as well as in vitro and animal studies to assess the potential for adverse events and in some cases to establish a rationale for therapeutic use.

The conduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations.

The conduct of preclinical studies is subject to federal regulations and requirements.

An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical studies, among other things, to the FDA as part of an IND.

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Clinical trials

Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include, among other things, the requirement that all research subjects provide their informed consent in writing before their participation in any clinical trial.

requirement that all research subjects provide their informed consent in writing before their participation in any clinical trial.

Clinical trials are conducted under written study protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated.

protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.

A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.

In addition, an IRB at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct continuing review.

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Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk.

Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients.

Marketing approval

Assuming successful completion of the required clinical testing, the results of the preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.

Under federal law, the submission of most NDAs is additionally subject to a substantial application user fee, currently scheduled to exceed $2.9 million, and the sponsor of an approved NDA is also subject to annual program fees, based on the number of approved products.

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The FDA has agreed to specified performance goals in the review of NDAs.

Under these goals, the FDA has committed to review most such applications for non‑priority products within 10 months after accepting the application for filing, and most applications for priority review products, that is, drugs that the FDA determines represent a significant improvement over existing therapy, within six months after accepting the application for filing.

Under these goals, the FDA has committed to review most such applications for non-priority products within 10 months after accepting the application for filing, and most applications for priority review products, that is, drugs that the FDA determines represent a

significant improvement over existing therapy, within six months after accepting the application for filing.

The review process may be extended by the FDA for three additional months to consider certain information or clarification regarding information already provided in the submission.

The FDA may also refer applications for

novel drugs or products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved.

The FDA may also refer applications for novel drugs or products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved.

The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

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We may encounter difficulties or unanticipated costs in our efforts to develop our product candidates and secure necessary governmental approvals, which could delay or preclude us from marketing our products.

After the FDA’s evaluation of the NDA and inspection of the manufacturing facilities, the FDA may issue an approval letter or a complete response letter.

An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application.

If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue an approval letter.

The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included.

Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval and refuse to approve the NDA.

Even if the FDA approves a product, it may limit the approved indications for use for the product, require that contraindications, warnings or precautions be included in the product labeling, require that post‑approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, which can materially affect the potential market and profitability of the product.

Even if the FDA approves a product, it may limit the approved indications for use for the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, which can materially affect the potential market and profitability of the product.

The FDA may prevent or limit further marketing of a product based on the results of post- market studies or surveillance programs.

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Under the fast track program, the sponsor of a new drug candidate may request the FDA to designate the product for a specific indication as a fast track product concurrent with or after the filing of the IND for the product candidate.

The FDA must determine if the product candidate qualifies for fast track designation within 60 days after receipt of the sponsor’s request.

In addition to other benefits, such as the ability to use surrogate endpoints and have greater interactions with the FDA, the FDA may initiate review of sections of a fast track product’s NDA before the application is complete.

The FDA must determine if the product candidate qualifies for fast track designation within 60 days after receipt of the sponsor’s request.

This rolling review is available if the applicant provides and the FDA approves a schedule for the submission of the remaining information and the applicant pays applicable user fees.

However, the FDA’s time period goal for reviewing a fast track application does not begin until the last section of the NDA is submitted.

In addition, the fast track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process.

However, the FDA’s time period goal for reviewing a fast track application does not begin until the last section of the NDA is submitted.

addition, the fast track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process.

Breakthrough designation

A drug may be designated as a breakthrough therapy if the drug is intended to treat a serious or life-threatening disease and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.

The breakthrough therapy designation provides all the benefits of the fast track program, including the eligibility for rolling review.

The FDA may take certain administrative actions with respect to breakthrough therapies, including holding meetings with the sponsor throughout the development process, providing timely advice to the product sponsor regarding development and approval, involving more senior staff in the review process, assigning a cross-disciplinary project lead for the review team and taking other steps to aid sponsors in designing the clinical trials.

Although breakthrough designation does not affect the regulatory standards for approval, the frequent interactions with the FDA may facilitate a more efficient development program.

In addition, the breakthrough designation may be withdrawn by the FDA if the FDA believes that the drug no longer meets the conditions for qualification.

Priority review

Under FDA policies, a product candidate may be eligible for priority review, or review within a six- month time frame from the time a complete application is accepted for filing.

Products regulated by the FDA’s Center for Drug Evaluation and Research (CDER) are eligible for priority review if they provide a significant improvement compared to marketed products in the treatment, diagnosis or prevention of a disease.

Accelerated approval

Under the FDA’s accelerated approval regulations, the FDA may approve a drug for a serious or life‑threatening illness that provides meaningful therapeutic benefit to patients over existing treatments based upon a surrogate endpoint that is reasonably likely to predict clinical benefit.

Under the FDA’s accelerated approval regulations, the FDA may approve a drug for a serious or life- threatening illness that provides meaningful therapeutic benefit to patients over existing treatments based upon a surrogate endpoint that is reasonably likely to predict clinical benefit.

In clinical trials, a surrogate endpoint is a measurement of laboratory or clinical signs of a disease or condition that substitutes for a direct measurement of how a patient feels, functions or survives.

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Abbreviated New Drug Applications

In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent with claims that cover the applicant’s product or a method of using the product.

Upon approval of a drug, each of

the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book.

In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent with claims that cover the applicant’s product or a method of using the product.

Upon approval of a drug, each of the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book.

Drugs listed in the Orange Book can, in turn, be cited by potential competitors in support of approval of an abbreviated New Drug Application (ANDA).

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ANDA applicants are not required to conduct or submit results of preclinical or clinical tests to prove the safety or effectiveness of their drug product, other than the requirement for bioequivalence testing.

Drugs approved in this way are commonly referred to as “generic equivalents”

to the listed drug and can often be substituted by pharmacists under prescriptions written for the original listed drug.

The ANDA applicant is required to certify to the FDA concerning any patents listed for the approved product in the FDA’s Orange Book, except for patents covering methods of use for which the ANDA applicant is not seeking approval.

Drugs approved in this way are commonly referred to as “generic equivalents” to the listed drug and can often be substituted by pharmacists under prescriptions written for the original listed drug.

Specifically, the applicant must certify with respect to each patent that:

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● the listed patent is invalid, unenforceable or will not be infringed by the new product.

A certification that the new product will not infringe the already approved product’s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification.

If the applicant does not challenge the listed patents or indicate that it is not seeking approval of a patented method of use, the ANDA application will not be approved until all the listed patents claiming the referenced product have expired.

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The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification.

The filing of a patent infringement lawsuit within 45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months after the NDA or patent holder’s receipt of the Paragraph IV certification, expiration of the patent, settlement of the lawsuit or a decision in the infringement case that is favorable to the ANDA applicant.

The ANDA also will not be approved until any applicable non- patent exclusivity period, such as exclusivity for obtaining approval of a new chemical entity, for the referenced product has expired.

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For written requests issued by the FDA after September 27, 2007, the date of enactment of the FDAAA, the FDA must grant pediatric exclusivity no later than nine months prior to the date of expiration of patent or non-patent exclusivity in order for the six-month pediatric extension to apply to that exclusivity period.

Combination Therapy

Combination therapy is a treatment modality that involves the use of two or more drugs to be used in combination to treat a disease or condition.

If those drugs are combined in one dosage form, such as one pill, that is known as a fixed dose combination product and it is reviewed pursuant to FDA’s Combination Rule at 21 CFR 300.50.

The Rule provides that two or more drugs may be combined in a single dosage form when each component contributes to the claimed effects and the dosage of each component (amount, frequency, duration) is such that the combination is safe and effective for a significant patient population requiring such concurrent therapy as defined in the labeling for the drug.

But not all combination therapy falls under the category of a fixed dose combination.

For example, FDA recognizes that two drugs in separate dosage forms and in separate packaging, that otherwise might be administered as monotherapy for an indication, also may be used in combination for the same indication.

In 2013, FDA issued guidance to assist sponsors that were developing the range of combination therapies that fall outside the category of fixed dose combinations.

That guidance provides recommendations and advice on such topics as:

(1) assessment at the outset whether two or more therapies are appropriate for use in combination;

(2) guiding principles for nonclinical and clinical development of the combination;

(3) options for regulatory pathways to seek marketing approval of the combination;

and (4) post-marketing safety monitoring and reporting obligations.

Given the wide range of potential combination therapy variations, FDA indicated it intends to assess each potential combination on a case-by case basis and encouraged sponsors to engage in early and regular consultation with the relevant review division at the agency throughout the development process for its proposed combination.

Combination products

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The FDA center with primary jurisdiction for the combination product will take the lead in the premarket review of the product, with the other center consulting or collaborating with the lead center.

The FDA’s Office of Combination Products (OCP) determines which center will have primary jurisdiction for the combination product based on the combination product’s “primary mode of action.”

A mode of action is the means by which a product achieves an intended therapeutic effect or action.

The FDA’s Office of Combination Products (OCP) determines which center will have primary jurisdiction for the combination product based on the combination product’s “primary mode of action.” A mode of action is the means by which a product achieves an intended therapeutic effect or action.

The primary mode of action is the mode of action that provides the most important therapeutic action of the combination product, or the mode of action expected to make the greatest contribution to the overall intended therapeutic effects of the combination product.

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Other regulatory requirements

Any drug manufactured or distributed by us pursuant to FDA approvals would be subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product.

Any drug manufactured or distributed by us pursuant to FDA approvals would be subject to extensive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product.

After approval, most changes to the approved product, such as adding new indications or other labeling claims are subject to prior FDA review and approval.

The FDA may impose a number of post- approval requirements as a condition of approval of an NDA.

For example, the FDA may require post‑marketing testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.

For example, the FDA may require post-marketing testing, including Phase 4 clinical trials, and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization.

Regulatory approval of oncology products often requires that patients in clinical trials be followed for long periods to determine the overall survival benefit of the drug.

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Additional provisions

Anti‑kickback and false claims laws

We are subject to various federal and state laws pertaining to healthcare “fraud and abuse,”

including anti-kickback laws and false claims laws, for activities related to sales of any of our products.

Anti-kickback laws generally prohibit a pharmaceutical manufacturer from soliciting, offering, receiving, or paying any remuneration to generate business, including the purchase, prescription or use of a particular drug.

Although the specific provisions of these laws vary, their scope is generally broad and there may not be regulations, guidance or court decisions that apply the laws to particular industry practices.

There is therefore a possibility that our practices might be challenged under such anti-kickback laws.

False claims laws prohibit anyone from knowingly and willingly presenting, or causing to be presented, any claims for payment for reimbursed drugs or services to third party payors (including Medicare and Medicaid) that are false or fraudulent.

Laws and regulations have been enacted by the federal government and various states to regulate the sales and marketing practices of pharmaceutical manufacturers with marketed products.

The laws and regulations generally limit financial interactions between manufacturers and healthcare providers;

and require manufacturers to adopt compliance programs that incorporate certain standards and/or require disclosure to the government and public of such interactions.

Many of these laws and regulations contain ambiguous requirements or require administrative guidance for implementation.

Given the lack of clarity in laws and their implementation, any future activities could be subject to challenge.

If our operations are found to be in violation of the fraud and abuse laws described above, or any other laws that apply to us, we may be subject to penalties, including, without limitation, civil, criminal, and administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment or restructuring of our operations.

Physician drug samples

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Significant uncertainty exists as to the coverage and reimbursement status of new drug products.

Sales of COPIKTRA or any other product candidates, if approved, will depend, in part, on the extent to which the costs of the products will be covered by third‑party payors, including government health programs such as Medicare and Medicaid, commercial health insurers and managed care organizations.

Sales of product candidates, if approved, will depend, in part, on the extent to which the costs of the products will be covered by third- party payors, including government health programs such as Medicare and Medicaid, commercial health insurers and managed care organizations.

The process for determining whether a payor will provide coverage for a drug product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the drug product once coverage is approved.

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Our product candidates may not be considered medically necessary or cost- effective.

A payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved.

Third-party reimbursement may not be sufficient to enable us to maintain price levels high enough to realize an appropriate return on our investment in product development.

Additionally, coverage and reimbursement for drug products can differ significantly from payor to payor.

One third-party payor’s decision to cover a particular drug product or service does not ensure that other payors will also provide coverage for the drug product, or will provide coverage at an adequate reimbursement rate.

Within the United States, FDA-approved drugs could potentially be covered by various government health benefit programs as well as purchased by government agencies.

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The prescription drug plans negotiate pricing with manufacturers and may condition formulary placement on the availability of manufacturer discounts.

Since 2011, under the Medicare Coverage Gap Discount Program, manufacturers with marketed brand name drugs have been required to provide a 50% discount the negotiated price for on brand name

prescription drugs utilized by Medicare Part D beneficiaries when those beneficiaries reach the coverage gap in their drug benefits, and, beginning in 2019, that discount increased to 70%.

Since 2011, under the Medicare Coverage Gap Discount Program, manufacturers with marketed brand name drugs have been required to provide a 50% discount the negotiated price for on brand name prescription drugs utilized by Medicare Part D beneficiaries when those beneficiaries reach the coverage gap in their drug benefits, and, beginning in 2019, that discount increased to 70%.

Drug products are subject to discounted pricing when purchased by federal agencies via the Federal Supply Schedule (FSS).

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FSS pricing is intended not to exceed the price that a manufacturer charges its most-favored non-federal customer for its product.

In addition, prices for drugs purchased by the Veterans Administration, Department of Defense (including drugs purchased by military personnel and dependents through the TRICARE retail pharmacy program), Coast Guard, and PHS are subject to a cap on pricing (known as the “federal ceiling price”) and may be subject to an additional discount if pricing increases more than the rate of inflation.

To maintain coverage of drugs under the Medicaid Drug Rebate Program, manufacturers are required to extend discounts to certain purchasers under the PHS pharmaceutical pricing program.

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government, state legislatures and foreign governments have shown significant interest in implementing cost containment programs to limit the growth of government- paid healthcare costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs.

Adoption of such controls and measures, and tightening of existing controls and measures, could limit payments for pharmaceuticals such as COPIKTRA and the drug candidates that we are developing and could adversely affect our net revenue and results.

Adoption of such controls and measures, and tightening of existing controls and measures, could limit payments for pharmaceuticals such as the drug candidates that we are developing and could adversely affect our net revenue and results.

Pricing and reimbursement schemes vary widely from country to country.

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There can be no assurance that any country that has price controls or reimbursement limitations for drug products will allow favorable reimbursement and pricing arrangements for any of our products.

The marketability of COPIKTRA or any other products for which we have or will receive regulatory approval for commercial sale may suffer if the government and third‑party payors fail to provide adequate coverage and reimbursement.

The marketability of products for which we may receive regulatory approval for commercial sale may suffer if the government and third- party payors fail to provide adequate coverage and reimbursement.

In addition, there is an increasing emphasis on managed care in the United States and we expect will continue to increase the pressure on drug pricing.

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There have also been recent state legislative efforts to address drug costs, which generally have focused on increasing transparency around drug costs or limiting drug prices.

Specifically, at the federal level, for example, in May 2018, President Trump and the Secretary of the Department of Health and Human Services released a “blueprint”

to lower prescription drug prices and out-of-pocket costs.

Specifically, at the federal level, for example, in May 2018, President Trump and the Secretary of the Department of Health and Human Services released a “blueprint” to lower prescription drug prices and out-of-pocket costs.

Certain proposals in the blueprint, and related drug pricing measures proposed since the blueprint, could cause significant operational and reimbursement changes for the pharmaceutical industry.

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There is no assurance that federal or state healthcare reform will not adversely affect our future business and financial results.

Drug development is a complex endeavor which requires deep expertise and experience across a broad array of disciplines.

HUMAN CAPITAL RESOURCES

As of December 31, 2020, we had 48 full-time equivalent employees, including a total of 10 employees with M.D.

degrees, and 6 part-time employees.

Of the full‑time employees, 36 employees are engaged in research and development activities.

degrees, and 1 part-time employee.

Of the full-time equivalent employees, 30 employees are engaged in research and development activities.

We consider the intellectual capital of our employees to be an essential driver of our business and key to our success.

Biopharmaceutical companies both large and small compete for a limited number of qualified applicants to fill specialized positions and retain such employees.

To attract qualified applicants to Verastem and retain such employees, we offer a total rewards package consisting of base salary and cash target bonus, a comprehensive benefit package and equity compensation for every employee.

Bonus opportunity and equity compensation increase as a percentage of total compensation based on level of responsibility.

Actual bonus payout is based on our achievement of corporate goals and individual performance.

None of our employees are represented by a labor union or covered by a collective bargaining agreement.

We consider our relationship with our employees to be good.

BUSINESS—EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth the name, age and position of each of our executive officers as of February 28, 2021.

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Gagnon served as the Executive Vice President, Chief Financial Officer and Treasurer at Clean Harbors, Inc.

Gagnon’s prior experience includes serving as Chief Accounting Officer and Controller at Biogen Idec, Inc., as well as a variety of senior positions at Deloitte & Touche, LLP, and PriceWaterhouseCoopers, LLP.

Gagnon holds an M.B.A from the MIT Sloan School of Management and a Bachelor of Arts degree in accounting from Bentley College.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business