Verastem Oncology Announces Pricing of Registered Direct Offering of $150 Million of Convertible Notes

BOSTON–(BUSINESS WIRE)–Verastem, Inc., (Nasdaq: VSTM) (Verastem Oncology or the Company),
focused on developing and commercializing medicines to improve the
survival and quality of life of cancer patients, today announced the
pricing of an offering of 5.00% Convertible Senior Notes due 2048 (the
Convertible Notes) through a registered direct offering. The aggregate
principal amount of Convertible Notes to be sold in the offering is $150
million. The Convertible Notes will be unsecured, will bear interest at
a rate of 5.00% per annum, paid semi-annually in arrears, and will
mature on November 1, 2048, unless earlier converted, redeemed or
repurchased in accordance with their terms prior to such date.

The net proceeds to Verastem Oncology from the offering of the
Convertible Notes are expected to be approximately $145.4 million, after
transaction fees and expenses. The net proceeds will be used by Verastem
Oncology for the continued clinical development of COPIKTRA (duvelisib)
and its other lead product candidates, and the balance to fund working
capital, capital expenditures and other general corporate purposes,
which may include the acquisition or in-license of additional compounds,
product candidates or technology.

Lazard Frères & Co. LLC acted as placement agent in connection with the
offering of the Convertible Notes.

Noteholders may convert their Convertible Notes into shares of the
Company’s common stock, together, if applicable, with cash in lieu of
any fractional share, based on an initial conversion rate of 139.5771
shares per $1,000 principal amount of Convertible Notes, which
represents an initial conversion price of approximately $7.16 per share,
an approximately 15% premium to the last reported sale price of the
Company’s common stock on Thursday, October 11, 2018. To the extent the
Company has insufficient authorized but unissued shares to settle
conversions in shares of its common stock, the Company will settle the
deficiency in cash.

The Company will have the right, exercisable at its option, to cause all
Convertible Notes then outstanding to be converted automatically if the
volume-weighted average price per share of the Company’s common stock
equals or exceeds 130% of the conversion price for a specified period of
time and certain other conditions are satisfied.

Prior to November 1, 2022, the Company will not have the right to redeem
the Convertible Notes. On or after November 1, 2022, the Company may
elect to redeem the Convertible Notes, in whole or in part, at a cash
redemption price equal to the principal amount of the Convertible Notes
to be redeemed, plus accrued and unpaid interest, if any.

Unless the Company has previously called all outstanding Convertible
Notes for redemption, the Convertible Notes will be subject to
repurchase by the Company at the noteholders’ option on each of November
1, 2023, November 1, 2028, November 1, 2033, November 1, 2038 and
November 1, 2043 (or, if any such date is not a business day, on the
next business day) at a cash repurchase price equal to the principal
amount of the Convertible Notes to be repurchased, plus accrued and
unpaid interest, if any. Upon the occurrence of certain events,
noteholders will have the right to require the Company to repurchase
their Convertible Notes at a cash repurchase price equal to the
principal amount of the Convertible Notes to be repurchased, plus
accrued and unpaid interest, if any. In certain circumstances that
constitute a “make-whole fundamental change” occurring prior to November
1, 2022, the Company may be required to increase the conversion price
for noteholders who convert their Convertible Notes in connection with
the make-whole fundamental change.

The offering is expected to close on or about October 17, 2018, subject
to customary closing conditions.

The Convertible Notes are being offered by the Company pursuant to an
effective shelf registration statement on Form S-3 (File No.
333-226322), which was declared effective by the U.S. Securities and
Exchange Commission (SEC) as of August 3, 2018. A prospectus supplement
and accompanying base prospectus relating to the offering may be
obtained at the SEC’s website, http://www.sec.gov or
by calling Lazard Frères & Co. LLC toll free at (800) 445-9522.

This news release does not and shall not constitute an offer to sell or
the solicitation of an offer to buy any securities, nor shall it
constitute an offer, solicitation or sale in any jurisdiction in which,
or to any person to whom, such offer, solicitation or sale is unlawful.
The Convertible Notes and the shares of the Company’s common stock
issuable upon conversion of the Convertible Notes may only be offered by
means of a prospectus.

Forward-looking statements:

Certain of the statements made in this press release are forward-looking
statements, including, but not limited to, statements regarding the
estimated proceeds of the offering and the Company’s anticipated use of
such net proceeds. Each forward-looking statement is subject to risks
and uncertainties, including risks and uncertainties related to market
conditions, the expected timing of the offering and the satisfaction of
customary closing conditions related to the offering, and the risk that
the Company may not be able to consummate the offering on the
anticipated terms, or at all. You should not place undue reliance on
these forward-looking statements, which apply only as of the date of
this press release. Other risks and uncertainties include those
identified in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2017, the prospectus supplement and accompanying base
prospectus relating to the offering, and any subsequent SEC filings. The
forward-looking statements contained in this press release reflect the
Company’s views as of the date of this release, and the Company does not
undertake and specifically disclaims any obligation to update any
forward-looking statements.


Verastem Oncology:
Brian Sullivan, +1-781-469-1636
Director, Corporate Development
Silverstein, +1-917-697-9313
Joseph Rayne, +1-617-340-6075


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