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Executives

Brian Sullivan - Manager of Corporate Development

Christoph Westphal - Chairman of the Board, Chief Executive Officer

Joanna Horobin - Chief Medical Officer

Robert Forrester - President and Chief Operating Officer

Analysts

Leah Berkowitz - UBS

Howard Liang - Leerink Swann

Eric Chang - Oppenheimer

Mike King - JMP

Bret Holley - Guggenheim Securities

Joe Pantginis - Roth Capital Partners

Charmaine Chan - RBC Capital Markets

George Zavoico - MLV & Company

Verastem Inc (VSTM) Q42012 Earnings Call March 27, 2013 8:00 AM ET

Operator

Thank you for holding. Welcome to the Verastem year-end 2012 investor conference call on March 27, 2013. At this time, all participants are in a listen-only mode. There will be a question-and-answer session to follow. Please be advised that this call is being recorded at the company's request and will be available on the company's website for two weeks from today.

At this time, I would like to introduce Mr. Brian Sullivan, Manager, Corporate Development of Verastem. Please go ahead.

Brian Sullivan

Welcome and thank you for joining us to discuss Verastem's financial results and corporate highlights for the year-ending on December 31, 2012. My name is Brian Sullivan. I am Manager of Corporate Development and I am joined today by Dr. Christoph Westphal, our Chairman and Chief Executive Officer, Mr. Robert Forrester, our President and Chief Operating Officer, Dr. Joanna Horobin, our Chief Medical Officer and Mr. Paul Brannelly, Vice President of Finance.

I hope you have had the opportunity to review the year-end results press release we issued earlier this morning. Before moving in discussion of the year-end results, please note that in this call, we will be making remarks about our strategy, future operations, future financial positions, future expectations and plans and prospects for our company that constitute forward-looking statements within the meaning of the Safe Harbor provisions of Section 21-E of the Securities Exchange Act of 1934.

All forward looking statements are subject to risks and uncertainties. We refer you to the risk factors section of the annual report on Form 10-K for discussions of important factors that could actual results to differ materially from this forward-looking statements.

We caution listeners not to place undue reliance on any forward-looking statement as there are no assurances of matters contained in such statements will be achieved. In addition, these forward-looking statements represent our views only as of today. Subsequent events and developments may cause our views to change. Although we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so.

With that said, Dr. Westphal will make some summary comments on the company's activities, Dr. Horobin will discuss recent clinical developments and upcoming plans and Mr. Forrester will comment on corporate operations and financials. We will conclude this morning's call with a question-and-answer session.

Please go ahead, Christoph.

Christoph Westphal

In 2012, we made significant progress in our mission to bring new treatment options to patients with serious cancers. We believe the resistance to therapy and eventual progression of disease observing clinical practice is due to the presence of cancer stem cells in tumors. We have identified and are now clinically developing drugs that are designed to kill these cancer stem cells to hopefully achieve a more durable clinical response.

Last year, we progressed in our understanding of signaling pathways on which cancer stem cells depend. We now have three products in preclinical or clinical development that inhibit these pathways. These compounds have demonstrated activity in killing cancer stem cells and are either currently or are expected to be in clinical development during 2013. Our most advanced therapeutic program is the focal adhesion kinase or FAK inhibitor, VS-6063. We are currently evaluating the anticancer effects of VS-6063 in combination with paclitaxel for ovarian cancer and we are on track to initiate a potentially pivotal study of VS-6063 in mesothelioma midyear.

We have met with regulatory authorities in the U.S. and U.K. They are supportive of our approach and based on our discussions we believe that this study is positive will enable us to seek regulatory approval. Mesothelioma is an aggressive cancer with limited treatment options, yet it appears to be highly sensitive to FAK inhibitors and therefore represents an indication where we may be able to rapidly deliver a new treatment option to patients. We believe the mesothelioma trial is a path to potential early regulatory approval. Mesothelioma is the first of many tumors where VS-6063 could be used. We may be able to broaden the label for VS-6063 with other indications, as evidenced by our clinical trial in ovarian cancer.

In addition there has been significant interest in the therapeutic targeting of the PI3-kinase pathway as Pharmcyclics, BIO, Gilead and Infinity all have recently reported impressive results in hematological malignancies from early-stage clinical trials. In multiple tumor models, our compound VS-5584 has demonstrated potent and selective activity. We are encouraged by the preclinical data generated to date and anticipate starting clinical development of VS-5584 the second half of the year.

There is strong support and increasing interest in targeting cancer stem cells. We presented at major scientific conferences last year and will continue to disseminate our research and further scientific understanding of the ultimate role of cancer stem cells for our industry's progression. I would also like to congratulate our scientific cofounders Dr. Bob Weinberg and Dr. Eric Lander, who each received the inaugural breakthrough in life sciences prize for their tremendous contributions to the understanding of human disease.

We have built a strong foundation to translate this groundbreaking research to clinical practice and believe that 2013 will be an important year for Verastem. We believe that investing in the recruitment of exceptional employees, management, directors and advisers is critical to leadership in the cancer stem cell field. In 2012 we welcomed Dr. Joanna Horobin as Chief Medical Officer. Joanna is a tremendously successful drug developer with over 30 years of experience in overseeing the development and introduction of 10 marketed compounds including Taxotere and Camptosar.

We continue to recruit exceptional clinical advisors to guide the development of our programs and named Dr. Richard Sackler and Max Wicha to our scientific advisory board. We have also recruited industry leaders to our Board of Directors. Allison Lawton has global operations expertise and leadership experience in regulatory affairs, manufacturing and commercialization through her service at Genzyme and Sanofi. Louise Phanstiel was the former partner of PWC, former president of WellPoint and a director of Myriad Genetics. Dr. Michael Kauffman was the CEO of Karyopharm and former Chief Medical Officer of Onyx and has introduced multiple drugs to the market, including Kyprolis. Dr. Sherwin is an oncologist was also a director of Biogen Idec and the former chairman of BIO.

Joanna Horobin, our Chief Medical Officer will now discuss our upcoming clinical plan.

Joanna Horobin

Thank you, Christoph. We have had a very productive first quarter. The Phase 1/trial of our lead FAK inhibitor, VS-6063 in combination with paclitaxel for patients with ovarian cancer is open and enrolling at all sites. This trial will give us an early look into the effect of combining a cancer stem cell inhibitor with standard chemotherapy in an attempt to achieve better disease control and hopefully enable a more durable clinical response. Additionally, the results from this trial may provide the necessary safety information for us to expand into additional tumor types. Paclitaxel is a commonly used agent in many solid tumors where cancer stem cells may play a role in disease progression. We believe the combination of a cancer stem cell inhibitor with existing therapies maybe a more effective treatment than just chemotherapy on its own as we will be targeting both the cancer stem cells and non-stem cells in a tumor.

We are also on track to initiate essentially a pivotal trial for VS-6063 in mesothelioma midyear. We believe that mesothelioma is an orphan disease and we have filed for orphan drug designation in both the U.S. and the European Community. Mesothelioma is an aggressive disease with a poor response to chemotherapy and the high proportion of chemo resistant cancer stem cells that we believe lead to tumor progression. Sadly, as most patients present with advanced disease the median survival time from diagnosis is often only 12 months. In our preclinical models of mesothelioma, there was a demonstrable sensitivity of cancer stem cells to VS-6063 in contrast to chemotherapy. There is a lack of innovation of novel therapies in mesothelioma and we believe that cancer stem cell targeting effect of FAK inhibition by VS-6063 has the potential to bring new hope to these patients.

We recently met with the FDA and then NHRA to discuss our clinical plans for VS-6063 in mesothelioma. The interactions with both agencies have been very collaborative and they agree that there is a large unmet medical need in this disease. Based on these discussions, our endpoints are both overall survival and progression free survival and they encouraged to seek regulatory approval on the progression free survival outcome if the data are supportive. The trial will involve patients following first line therapy of Alimta, or pemetrexed, plus platinum therapy where there are no currently approved therapeutic options.

Currently, patients are sent home no further therapy and wait essentially for the disease to progress. We believe our approach using 6063 after chemo has produced deep disease control will target the cancer stem cells that remain or may even be enriched following chemotherapy. We hope to prolong the disease free period for these patients following frontline therapy as well as the period of overall survival. We are working with LabCorp to develop the clinical test for a companion diagnostic to VS-6063 that may aid with patient selection in the mesothelioma trial. The trial has an adaptive design element that will allow us to evaluate the effect of VS-6063 on either the overall patient population or the subset delineated by the selection marker.

We presented data on our second FAK inhibitor, VS-4718 at multiple scientific conferences throughout 2012. These presentation demonstrate the potent cancer stem cell targeting ability of VS-4718 across multiple tumor types. We have conducted our IND enabling studies on VS-4718 and we expect to initiate a Phase 1 trial in advanced solid tumors during the first half of this year. This trial is designed to establish the recommended Phase 2 dose to initially evaluate the safety profile of VS-4718 and subsequently expand the enrollment in a subset of patients to evaluate initial clinical signs of activity.

In 2012, we generated and presented exciting data on our dual PI3K/mTOR inhibitor, VS 5584 relating to the cancer stem cells targeting ability of this compound in breast cancer. In addition, IND enabling studies were started late last year and we are targeting the second half of 2013 to initiate clinical development through a Phase 1 trial in advance cancers.

I will now hand it over to Robert Forrester, President and Chief Operating Officer to discuss the corporate operations.

Robert Forrester

Thank you, Joanna. Thank you all for joining the call this morning. Its great to have so many people on the call. So will briefly review 2012 financials. Obviously we are delighted that we have completed our IPO last year and to attract such a world class set of investors.

As of December 31, 2012, Verastem had cash, cash equivalents and investments of $91.5 million compared to $56.8 million on December 31, 2012. Net loss for 2012 was $32 million as compared to $13.7 million for 2011. The 2012 net loss includes a $3.6 million license fee payment of cash and stock to Pfizer and non-cash stock-based compensation expense of $7.4 million. Therefore the actual cash flow into 2012 were $22.9 million and excluding the $1.5 million of Pfizer upfront payment, it was $21.4 million.

Research and development expense for 2012 was $21.7 million and general and administrative expenses for the year was $10.5 million. Based on current operating plans, we expect to have sufficient cash to fund development for our programs and operations into the second half of 2015. We are please that we have the capital, products and team in place to execute on our mission and believe that 2013 will be an important year.

In particular, we are focused on achieving the following clinical milestones this year. Initiate midyear the potentially pivotal trial of mesothelioma for 6063. Secondly, complete the safety portion of the Phase 1/1b trial of 6063 plus paclitaxel in ovarian cancer and then begin enrollments of the expanded cohort in the ovarian trial. Fourthly, initiate Phase 1 clinical development of 4718 in the first half of 2013. Finally, initiate the Phase 1 clinical development of 5584 in the second half of this year.

We will give an update on R&D day on Thursday, July 11 from 10:00 AM to 1:00 PM in New York. I will now as the operator to open up our call and we are happy to answer any questions you might have.

Question-and-Answer Session

Operator

(Operator Instructions).Thank you. Our first question comes from Mart Roden. Please go ahead.

Leah Berkowitz - UBS

Hi, good morning, everybody. It's Leah Berkowitz in for Matt Roden. First of all, I wanted to say congratulations on all of the progress you guys have made over the past year. I have two questions for you. Firstly, for 6063, is there a mechanistic rationale for the sequential therapy following Alimta in mesothelioma versus looking at the combination therapy in the ovarian trial and have you looked at differences between sequential versus combo therapy and what is your thinking there?

Secondly, also regarding meso, I know that you guys have mentioned that you have met with both regulatory agencies in the U.S. And the U.K., can you comment on that regarding other countries in the EU? Is that sort of an IRB thing that you are still thinking about needing approval for or can you please just elaborate on that for us? Thanks.

Joann Horobin

So this is Joann answering those questions. So first lets take the question about the use of 6063 in a sequential setting. The reason why we have chosen to do this is that our data shows very clearly that, in fact, drugs like Alimta, pemetrexed and platinum, which will be used in the frontline setting in this disease actually increased the proportion of cancer stem cells in mesothelioma tumors. So our view is that as these drugs actually achieve some degree of clinical control, what we then want to do is to come in and eliminate the cancer stem cell population so it can extend that control and hopefully extend progression free survival. Does that answer your question, Leah?

Leah Berkowitz - UBS

Yes, and then any thoughts on the frontline as well?

Joann Horobin

So the question about going in to frontline therapy?

Leah Berkowitz - UBS

Yes, I am sorry I think I didn't elaborate on that but what are your plans there and then potential competitors?

Joanna Horobin

Certainly, in the longer term one could envisage the idea of going into frontline therapy combining with platinum and/or Alimta in that setting. But I think the first step is to actually see if we can improve the progression free survival. Bearing in mind that there is a treatment in frontline therapy but there are no treatment options for patients beyond frontline therapy. So this is really a truly unmet need and I think that then keys into the regulatory questions.

Because, obviously in a disease where there is no unmet need, the regulators are very collaborative on working with companies in order to find ways to bring new options to patients. So coming to your second question about our interactions with the agencies, the first thing I would say is that we really do feel that they want to work with us to try and bring new options to mesothelioma patients.

I think that’s why they were encouraging us, in fact, to go backwards, the results from the PFS endpoint. Even though, as I said in my comments earlier, the overall survival endpoint is indeed the primary endpoint for a Phase 2 study.

On your point about other countries in Europe, one of the things to remember here is that in fact, the U.K. is the country which has the biggest issue with mesothelioma. Unfortunately that disease is more prevalent in that country than anywhere else in Europe and that’s why we selected the NHRA particularly from that point of view as giving us good guidance as to the views of how to treat the disease as well as options would be potentially approvable in the EU. We think that the U.K. is actually a really good surrogate for the EU more generally.

Leah Berkowitz - UBS

Okay, thank you.

Operator

Thank you. Your next question is coming from Howard Ling from Leerink Swann. Please go ahead. Your line is open.

Howard Liang - Leerink Swann

Thanks very much. My first question. On the combination trial with Paclitaxel, how are you planning to detect an effect on the stem cell in the combination setting? You mentioned that if this trial is successful in demonstrating safety you will move to additional settings where paclitaxel is supposed to be used where stem cell is also placed to (inaudible). Can you talk about what other additional settings you might be interested in?

Joanna Horobin

That’s a good question, Howard. The study is being designed in such a way that, first of all, we want to rapidly get to a point where we know what dose of VS-6063 to combine with paclitaxel. So we are going to do a rapid escalation. Once we have defined the dosing schedule to use in combination with paclitaxel, the study will then recruit patients in an expanded phase where we treat patients for two weeks with the FAK inhibitor alone.

Before and after administration of the FAK inhibitor, we will take biopsies of these patients' tumors. That will allow us to do a number of things. First of all, it will enable us, obviously, to confirm the on target effect of that drug but also, in fact, more importantly, it will allow us to look for cancer stem cell markers in these tumors and see what impact we have on those cancer stem cell markers.

Howard Liang - Leerink Swann

On the additional indication?

Joanna Horobin

So I think what the additional indication is, obviously, paclitaxel is the workhorse chemotherapy used is in many, many genotypes and I think the idea here is that once we have shown that we can give these two drugs together there are many places we could go. For example, I think we have mentioned before, the idea that we could perhaps move into a neoadjuvant setting in triple negative breast cancer where, of course, there is an early approvable endpoint now that’s being defined by the agency in the shape of pathologic complete response. So we think this combination opens up the doors to many different opportunities.

Howard Liang - Leerink Swann

Great. If I can just add another question on the pivotal study in mesothelioma. Could you talk about how this study will progress from, I know, your initial endpoint will be a Phase 2, just how will this trial be progressing over time? Is there a different endpoint that you will have?

Christoph Westphal

Are you referring to describing it as a Phase 2 but it is a Phase 3. I think the answer is, we are designing this as a very robust fashion. We are calling it a Phase 2 and in fact it is designed and operating as a Phase 3. We have had those conversations with the agencies in Europe and the U.S. and (inaudible). So we had a very collaborative discussion with both of them and they are very supportive of our trial design and encourage us to come back and seek federal approval of PFS.

Howard Liang - Leerink Swann

Thank you.

Operator

Thank you. Your next question is coming from David Ferreiro of Oppenheimer.

Eric Chang - Oppenheimer

Hi, this is Eric Chang, calling in for David. Regarding the approvability of the Phase 2 mesothelioma results, did the FDA set any loose expectations for PFS in the maintenance setting? Secondly, were there any differences in feedback from U.K. and U.S. regulators?

Joanna Horobin

No, so as we usually expect, the agencies response is always be a review issue but, of course, we discussed what sorts of PFS benefits, what sort of clinical benefit is actually going to lead through a positive review. Clearly, a PFS benefit itself is important but I think in this disease, where patients are very symptomatic, quality of life is also going to be a very important factor. So we have incorporated in to this study a quality of life assessment. So I think that will play very importantly into that designation of benefit.

Eric Chang - Oppenheimer

Great, and would you be able to share the powering for PFS in the Phase 3 trial?

Joanna Horobin

No, for competitive reasons, we are not giving all the details of that study.

Eric Chang - Oppenheimer

Got you, and I am sorry to go back, were there any differences in feedback from U.K. and U.S. regulators?

Joanna Horobin

No, they were essentially the same feedback.

Eric Chang - Oppenheimer

Great, thank you.

Operator

Thank you. Your next question is coming from Mike King from JMP. Please go ahead.

Mike King - JMP

Good morning, guys. Thanks for taking the question. Let me add my congrats for your progress in 2012. I just wanted to see if I could put a finer point on Howard's question regarding what is going to inform the potentially pivotal study based on the work that's being done now. Joanna, you mentioned earlier both pathologic complete response as well as some biomarker information and I am just wondering can you maybe give us some insights as to what you feel is going to be substantial enough suggestion of activity that you will feel comfortable rolling that into that registration phase of the trial.

Joanna Horobin

So I think if we look historically, what's led to approval in these sorts of setting, so for example if we think about the original approval in 2004 for Alimta in mesothelioma, that was on the basis of a three months improvement in overall survival from nine months to 12 months. If we look at the approval in the maintenance setting of pemetrexed in non-small cell lung cancer, so a different disease but essentially a similar sort of setting, that was based on a two months improvement in PFS. So I think we have got a benchmark here that we are being guided by, Mike.

Mike King - JMP

Okay, so I guess the question is then, once you achieve the appropriate dose you will be looking at PFS as your signal to expand into a registration directed trial?

Christoph Westphal

Mike, this whole business, only one dose in this trial at that is 400 mgs. It's being run as the pivotal trial from start. There is no waiting event from one moment to another moment.

Mike King - JMP

Got it, okay. Well, I guess it was just the phraseology of potentially pivotal, and then if I could ask about 4718.

Christoph Westphal

(inaudible), Mike.

Mike King - JMP

Yes, okay, understood. 4718, can you tell us about your thoughts there? Why you feel comfortable now moving forward in the clinic, second half of the year? What you hope to differentiate it with respect to 6063? Maybe just a little color on that?

Christoph Westphal

Thanks a lot, Mike, and its great to have you involved also following us. So we are quite excited about FAK. We have a wealth of data now published by Bob Wienberg recently and the literature showing FAK's key role in cancer stem cells. Based on that, we think it is prudent to have a different structural class compound with very nice characteristics moving forward into the clinic in a Phase 1. So its kind of what any large pharmaceutical company would do. We really believe FAK is an interesting mechanism and we want to have another compound to move forward there. Does that answer your question?

Mike King - JMP

I guess. I mean I guess the data will also drive your decision.

Christoph Westphal

Yes, a couple of people have pointed out and its smart. The FAK may play in cancer cell stem cells, as you know, may play a role in multiple different tumors. Some of those might be much more rare tumors. Some of them might be much more common. So it makes a lot of sense, we think, from a strategic and business point of view to have two different molecules moving forward. There might be advantages to that down the road. Obviously, we have to see the data play out.

Mike King - JMP

Right, okay. I will get back in queue. Thank you.

Christoph Westphal

Thank you.

Operator

Thank you. Your next question is coming from Bret Holley from Guggen Securities. Please go ahead.

Bret Holley - Guggenheim Securities

Hi, how are you. Thanks for taking the question. I am wondering if you could give a comment on the incidence of mesothelioma. I guess the incidence has gone down a bit in the United States and I am wondering obviously going up a little bit in Australia and the U.K. Can you just give us a sense of how you are thinking about that longer term? Do you have any idea what kind of sales level Alimta has reached in mesothelioma?

Joanna Horobin

So let me talk about the incidence first. It's certainly in the U.S. You are right, it has plateaud here in the U.S. That means we have got about 2,500 to 3,000 new cases a year. In Europe, unfortunately, the incidence is actually still increasing, particularly in the U.K. and even more importantly, it's increasing very rapidly, we understand, in countries like India and China. So we do believe that whilst its plateauing here in the U.S., it is increasing worldwide and as I think we have mentioned, this will be a worldwide study with the intention of getting a worldwide approval in this indication.

Christoph Westphal

Hi, Bret, maybe just I should comment of the market size that, I think was your second question. We see mesothelioma, from a strategic perspective, as the first indication for approval for the drug. We see it’s the most efficient route to get that early approval but we do believe this drug will be a drug that could be used in many different tumor types in many different settings. Mesothelioma, just on it's own, is probably something like a $500 million to $700 million drug opportunity worldwide, which for us as a little company is actually quite appealing, particularly if its an orphan disease, is one that we can commercialize ourselves with a relatively small salesforce because these patient tend to go to a few centers of excellence across the globe. There is probably 50 to 100 sites worldwide that one would need to really cover to have a decent market penetration. So we see mesothelioma as an interesting market opportunity in its own right but we see it as the first step on a path of broadening the indications of the drug into things like lung or breast or prostate, other tumors driven by cancer stem cells.

Bret Holley - Guggenheim Securities

Great, and I am wondering, can you elaborate a little bit on the companion diagnostic? I am curious how you think potentially you could segment out the market in mesothelioma and obviously other cancers as well? Can you give us some idea of what you are thinking there?

Joanna Horobin

Yes, certainly. So the preclinical data as well as the data that Glaxo presented last fall suggested that patients who have tumors that are designated as Merlin low may actually respond better. So we think that’s what we are evaluating. We don’t, at this point, necessarily think that only those patients are going to respond to this drug in mesothelioma but it is indeed what's driving response. We want to make sure that we capture that market segment. So that’s really the idea of including the diagnostic test in the clinical trial which will allow us to stratify according to Merlin high or Merlin low. The adaptive design will allow us to actually re-estimate the sample size in this study so that if all of the effect is coming from patients who are Merlin low, we will be able to enrich the population for those patients and therefore achieve an approval in that patient population from the get go. So that’s the thinking.

Christoph Westphal

And, Bret, from a strategic perspective, since the start of this company, we have had a diagnostic effort running in parallel with the drugs and we see ourselves as the discoverer or an early developer of those diagnostic products but we don’t just, not necessarily are being commercializor of it, which is why our collaboration with LabCorp is so helpful to us.

Bret Holley - Guggenheim Securities

Great and thanks very much for answering the questions.

Operator

Thank you. Your next question is coming from Joe Pantginis from Roth Capital Partners. Please go ahead.

Joe Pantginis - Roth Capital Partners

Hi, guys, good morning and thanks for taking the question as well and congratulations on the progress. Couple of questions. First, maybe on the diagnostic as well, maybe can you discuss some of the background activities and what is going to be completed in order to have the diagnostic ready to go when the study starts?

Christoph Westphal

Okay. Well, working with LabCorp, I certainly sleep better at night now because obviously, I think, we are good at the discovery bit but there is an awful lot of nuts and bolts that go into having the diagnostic ready for the clinical trial which it will be. So with LabCorp there in collaboration working with us to make sure that everything is ready for the start of the trial.

Joe Pantginis - Roth Capital Partners

Okay, great, and then I will ask a similar question to Mike's regarding the ovarian study. Obviously the main thing you are doing is to look for the dose and the safety to move on to the expanse in cohorts. Do you have any potential efficacy gating factors that you are looking at for a minimum level of activity even though this is a dose escalation study?

Joanna Horobin

No, we don’t at this time.

Joe Pantginis - Roth Capital Partners

Okay, that's helpful. Then the next question I would ask is sort of a forward-looking question regarding the overall strategy of the company. Obviously you are at an important execution stage now for your products and when you are looking forward now you obviously have other products that you can combine with like the BTK inhibitor with Pharmacyclics but are you also looking at potentially bringing in other any targeted agents that might complement your current agents?

Christoph Westphal

Thanks, Joe, very much for the thoughtful question. I think that we are at a really, really interesting point for this little company. We are well-financed and we have the capital to the achieve these value creating events here over the next 12 to 18 months. An ideal setting for orphan indications with mesothelioma, I think we can go to market our own. Obviously, we are looking at other alternatives but we think we have a set of very interesting assets in the company with multiple shots on goal and some pretty interesting value driving events. So we are not actively looking and thinking that we need anything else.

Joe Pantginis - Roth Capital Partners

Okay, and then maybe just lastly, I appreciate taking the questions here. When you look at the deep science that you guys are conducting right now, you have your follow-on FAK inhibitor. Maybe can you talk to the potential of even combining those two in the future?

Christoph Westphal

Yes, and I am sorry I didn’t answer that part of your question. Part of what's really exciting here is this idea that we have multiple mechanisms that we believe target cancer stem cells and I think it’s a very thoughtful observation that not only can they be active as monotherapy and could be interesting product opportunities but there could be very interesting combinations between our agents and between our agents and those of other well-financed cash flow positive companies that are out there. So obviously we think about that and then other people are thinking about that too.

Joe Pantginis - Roth Capital Partners

Great, thanks a lot, guys.

Operator

Thank you. Your next question is coming from Michael Yee and that’s from RBC Capital Markets. Please go ahead.

Charmaine Chan - RBC Capital Markets

Hi, this is Charmaine on behalf of Michael Yee. Can you remind us what the timeline is for the 6063 trial in mesothelioma. How long do you think enrollment would take and remind us of the interim analysis there for the adaptive design?

The second question that I have is with regards to the mTOR/PI3K kinase compound. How do you think, given the patient there, is more favorable in targeting cancer stem cells and how would that be differentiated from the other PI3Ks that are out there. Thank you.

Joanna Horobin

So let me start with mesothelioma study. We intend to get this study up and running in the middle of this year. We are looking for an accrual time of approximately 18 to 14 months. The interim analysis to look at the impact of the biomarker piece is likely to have happen about halfway to two-thirds of the way through the study. Obviously, we have PFS as endpoint that we will be following. So that’s an event driven endpoint rather than the number of patient.

Christoph Westphal

Then to address your question on PI3-Kinase. The way to think about Verastem is, I think we have quite a powerful discovery engine related to cancer stem cells and it is based on what we think is a unique insight and unique approach to discovering agents that target cancer stem cell specifically. As we employ that we identified several mechanisms, three of them have been disclosed, PI3-Kinase is one, FAK is another and Wnt is the third. Within PI3-Kinase, we of course look at the various molecules and the various characteristics of those molecules and through our unique lens, we discovered that 5584 really look quite interesting in targeting cancer stem cells and we have now generated a wealth of preclinical scientific data that is partially published and reported in the literature and at meetings but obviously we will continue to publish.

So when we compare our compounds versus those of others, we think is a special angle we have. We do think there are a couple of other compounds that look pretty interesting. We do think some of the clinical results of some of those other compounds whether it be in hematological malignancies or in solid tumors, we think both of those could be of interest and our hope is, assuming we can go into full-blown Phase 1b in the near-term here, that we can hopefully see some interesting effects not too far away in those kind of studies. So it is pretty interesting opportunity and value driver for our company in the near-term.

Charmaine Chan - RBC Capital Markets

Great, thank you. Very helpful.

Operator

Thank you. Your next question is coming from George Zavoico from MLV & Company. Please go ahead.

George Zavoico - MLV & Company

Hello, good morning. Thanks for taking the question. Congratulations on your progress thus far since your IPO and from before. I have two questions. First, regarding the diagnostics part of your strategy. Circulating tumor cells are akin to cancer stem cells, at least some people advocate that point of view. Can you use that as a diagnostic, measuring circulating tumor cells to see whether your cancer stem cell therapy approach is working?

Christoph Westphal

We think circulating tumor cells have the potential to be very, very useful. I am not sure that we are convinced at the technologies there quite yet but I think in the future it could well be one way that we do diagnostics for counting, monitoring cancer stem cells. Right now, we are very much focused on other biomarkers. We talked a bit about Merlin. We also have a gene signature that we are working with as well. Our goal is to be able to select the right patients and be able to monitor response. It will be fabulous at some stage to be able to count cancer stem cells in the similar way that viral load is monitored in Hepatitis C. I am not sure we are there quite yet but that’s something that we are working on and that will be a very, very powerful and valuable diagnostic.

George Zavoico - MLV & Company

Are you measuring that in your current trial? Are you measuring circulating tumor cells?

Christoph Westphal

We are measuring a number of different types of diagnostic endpoints in these trials.

George Zavoico - MLV & Company

Okay. You mentioned the Wnt beta-catenin pathway. This has been a particularly difficult pathway to target. You entered into a research collaboration with Eisai on this as you wrote and as you have disclosed. Could you discuss a little bit about exactly what that research collaboration entails and what portion of it, what rights and IP you maintain and what you share with Eisai?

Christoph Westphal

So we are delighted to have this collaboration with Eisai. As you know, it’s a very successful Japanese company. We are also very, very interested in the Wnt pathway. We think it does play an important role in cancer stem cells potentially and so the collaboration with them is one they are fully funding our chemistry work that’s being done there. It’s a discovery collaboration. It's making good progress. The nice structure of the deal is that we own all of the IP that comes out from the collaboration. They have a right of first negotiation for a period of time which, I think, expires in the middle of this year and they have a small fee back to us if we would ever commercialize the IP.

George Zavoico - MLV & Company

So they are doing most of the discovery chemistry, most of the medicinal chemistry. I presume you are helping guide the effort there as well?

Christoph Westphal

Yes, they are doing all that chemistry work. You are absolutely right. We are helping to guide the effort.

George Zavoico - MLV & Company

Okay, great, and is there a timeline to the collaboration and is there an expiration date?

Christoph Westphal

There is no specific timeline right now. We have an active collaboration going on with them. So its an ongoing thing.

George Zavoico - MLV & Company

Okay, thank you very much for taking the questions.

Operator

Thank you. Ladies and gentlemen, this will conclude our question-and-answers portion of the call. I would like to turn it back over to Dr. Christoph Westphal for closing remarks,

Christoph Westphal

Thank you very much. I appreciate everybody dialing in and asking thoughtful questions. We look forward to speaking with each of you in the near future.

Operator

Thank you. Ladies and gentlemen, this does conclude the conference call for today. We appreciate your participation and you may now disconnect.

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