Verastem, Inc. (VSTM) Earnings Call Transcript & Summary

Good morning. And welcome. Thank you for being with us today, we greatly appreciate your interest in Verastem. I would like to call the Verastem Inc. Annual Meeting of Shareholders to order. I'm Brian Stuglik, a member of the Board of Directors and Chief Executive Officer of the company. I will serve as Chair of today's meeting; and Rob Gagnon, our Chief Business and Financial Officer, will serve as secretary. We are delighted to be hosting our virtual meeting, which allows us to be more inclusive and reach a greater number of our stockholders while supporting everyone's health and well-being. Although we may not be able to answer every question, we will do our best to provide a response to as many as possible. While we have made this meeting generally accessible to the public, please be aware that only shareholders of record on March 23, 2020, who entered the meeting using their 16-digit control number will be able to ask questions and vote in today's meeting. You have access to a copy of the agenda and the rules of procedures for today's meeting on the web portal. We will follow them closely, so that we can conduct this meeting as efficiently as possible. Rob Gagnon will now present the Corporate Secretary report and explain our voting procedures.

Thank you, Brian. The notice of meeting was mailed by Broadridge Financial Solutions on April 8, 2020, to all stockholders of record as of March 23, 2020. And as a result, the meeting is being held pursuant to proper notice. An affidavit of Broadridge as to the following matters will be filed with the minutes of this meeting. A, the mailing on April 8, 2020, of one, the notice of this annual meeting; two, the company's annual report for the fiscal year ended December 31, 2019; three, the company's proxy statement dated April 8, 2020; and four, a proxy for all holders of record of common stock of the company as of the record date. As well as B, the filing with the Securities and Exchange Commission on April 22, 2020, of the notice of the change of location of this annual meeting. And C, the issuing on the company's website on April 22, 2020, of a press release announcing the change of location of this annual meeting. Copies of these materials are attached as exhibits to the affidavit. A certified list of the stockholders of common stock of the company as of the close of business on March 23, 2020, the record date for this meeting, which has been prepared by Computershare, the company's transfer agent, is available on the web portal and will also be filed with the minutes of this meeting. I have been appointed as inspector of elections for the meeting. Most stockholders have already voted by proxy, and your proxy votes have been tallied. For those of you who have not yet voted or if you wish to change your vote, you may submit your vote on the web portal using the Vote Now button during the meeting and prior to the polls closing. Proxies representing more than 65% of the approximately 159 million shares of the company's outstanding stock eligible to vote have been received. And accordingly, a quorum is present. And the meeting is duly constituted and should proceed. In my capacity as inspector of elections, I report the existence of a quorum, so we will proceed with the business of this meeting.

Thanks, Rob. We will now ask that our shareholders consider the matters set forth in the proxy statement. I would like to ask Rob to review the matters to be voted upon today.

Thank you, Brian. Stockholders who executed proxies or voted online or by telephone do not need to vote again by ballot unless they wish to change their vote. If any stockholder entitled to vote and who entered the meeting with their 16-digit control member wishes to change their vote or has not yet voted and wants to during the meeting, they may submit their vote on the web portal using the Vote Now button during the meeting and prior to the polls closing. Agenda item B, proposals and discussion. The company has not received notice from any of its stockholders as required under its bylaws of any other matter to be considered at today's annual meeting. And therefore, no other proposals may be properly introduced by stockholders. The first item of business to come before the meeting is the election of the Class II directors to serve until the 2023 Annual Meeting of Stockholders and until their successors are duly elected and qualified. The following 2 people have been properly nominated by the Board: Brian Stuglik, Timothy Barberich. Please be aware that Alison Lawton, a current Class II director is not standing for reelection as a Class II director. And therefore, her term will expire at this meeting. There are no additional nominations made in accordance with the company's policy on director nominations. And accordingly, all nominations are closed. This proposal is discussed in the company's proxy statement, and the Board recommends a vote for the election of each of the Class II directors. The second item of business to come before the meeting is the approval of an amendment to the company's restated certificate of incorporation to provide for an increase in the total number of shares of common stock that the company is authorized to issue from 200 million shares to 300 million shares, the charter amendment. This proposal is discussed in the company's proxy statement, and the Board recommends a vote for approval of the charter amendment. The third item of business to come before the meeting is to approve the company's amended and restated 2012 incentive plan to increase the number of shares under the plan by 13 million shares. This proposal is discussed in the company's proxy statement, and the Board recommends a vote for approval of the increase in number of shares under the plan. The fourth item of business to come before the meeting is the ratification of the selection of Ernst & Young LLP as the independent registered public accounting firm for the company for the fiscal year ending December 31, 2020. This proposal is discussed in the company's proxy statement, and the Board recommends a vote for the ratification of the selection of Ernst & Young. The fifth item of business to come before the meeting is the adoption of the advisory vote on the compensation of our named executive officers. This proposal is discussed in the company's proxy statement, and the Board recommends an advisory vote in favor of the compensation of our named executive officers. If there are any questions regarding the voting procedures or if any stockholder who entered the meeting with their 16-digit control number wishes to comment on or raise any questions regarding the proposals being voted on today, please submit the question in the designated "Ask a Question" field on the web portal now. If not already done so, you may vote by clicking on the Vote Now button on the web portal and following the instructions there. Stockholders who have sent in proxies or voted via telephone or Internet and do not want to change their vote do not need to take any further action. If you previously returned a proxy card and do not wish to change your vote, you do not need to vote again at this meeting. [Voting]

That completes the voting on the proposal before the stockholders. The polls are now closed.

Thank you, Rob. When you're ready, will you please provide us with the preliminary voting results?

Proposal number one is the election of Brian Stuglik and Timothy Barberich as Class II directors, each for a 3-year term. Directors are elected by a plurality of the votes cast. Because there is no minimum vote requirement, abstentions and broker non-votes have no direct effect on the outcome of this proposal. Brian Stuglik received affirmative votes representing more than 88% of the votes cast. Timothy Barberich received affirmative votes representing more than 85% of the votes cast. The proposal is approved in total and both Brian Stuglik and Timothy Barberich are elected to continue as Class II directors of the company. Proposal number two is the approval of an amendment to the company's restated certificate of incorporation, as amended, to provide for an increase the number of shares and the total number of shares of common stock that the company is authorized to issue from 200 million shares to 300 million shares. The proposal requires the affirmative vote of a majority of the shares outstanding. The proposal has received affirmative votes representing more than 51% of the shares outstanding. The proposal is approved. Proposal number three is the approval of the company's amended and restated 2012 incentive plan to increase the number of shares under the plan by 13 million shares. The proposal requires the affirmative vote of a majority of the votes cast. The proposal has received affirmative votes representing more than 82% of the votes cast. The proposal was approved. Proposal number four is the ratification of the selection of Ernst & Young as the independent registered public accounting firm for the company for the fiscal year ended December 31, 2020. The proposal requires the affirmative vote of a majority of the votes cast. The proposal has received affirmative votes representing more than 95% of the votes cast. The proposal is approved. Proposal number five is the adoption of the advisory vote on the compensation of our named executive officers. Specifically, our Board of Directors has asked for our stockholders to cast a nonbinding advisory vote for the following resolution. Resolved that the compensation paid to the company's named executive officers as disclosed in the proxy statement pursuant to Item 402 of Regulation S-K including the compensation tables and narrative discussed is hereby approved. Because this proposal asks for a nonbinding advisory vote, there is no required vote that would constitute approval. We value the opinions expressed by our stockholders in this annual advisory vote and the Compensation Committee of our Board of Directors, which is responsible for overseeing and administering our executive compensation plans, will consider the vote when making future compensation decisions for our officers. The proposal has received affirmative votes representing more than 95% of the votes cast. As the inspector of elections, I will file a report with the final results of these votes with the minutes of the company (sic) [ minutes of the meeting ]. In addition, we will report the final results, which will include any votes properly submitted at today's meeting within 4 business days and a filing with the SEC on Form 8-K. Agenda item D, adjournment. Questions and answers.

We've now completed the business of the meeting and our stockholder meeting is adjourned.

We will now proceed to a question-and-answer session. [Operator Instructions] Please note, we will attempt to answer as many questions as time allows. But only questions that are germane to the meeting will be addressed.

Thank you, Brian. We do have one question in the queue that pertains to our 6-2-5 Plan. The question is, is the plan still viable? And if not, please share with -- where the company is going strategically and when can long-term shareholders expect to see a return? So as it pertains to the 6-2-5 strategy and plan, Brian or Dan, do you want to respond to that question?

Yes, Rob, I'll start and ask Dan to add on. When we announced in the first quarter of this year the in-licensing of the VS-6766 compound, in parallel, we announced that we were relooking at our strategic direction and that it would now allow us to return to both an R&D-based organization to rapidly develop VS-6766 plus defactinib as long as -- well as continue to promote COPIKTRA. So the 6-2-5 strategy has been replaced by our new strategic direction around our portfolio approach now.

Great. Thank you, Brian. We have received a couple of other questions that are really not pertinent for the business today or for this forum. And I would refer the shareholders to our SEC filings and investor presentation that can be found on our website.

That concludes our question-and-answer session. Ladies and gentlemen, thank you very much for your attendance and your continued interest in and support of Verastem Oncology. Have a great day.