Effective May 10, 2005, Lazard Frères & Co. LLC (“LF&Co.”) transferred its capital markets business (which includes equity research, syndicate, sales and trading) to a new privately-held company, Lazard Capital Markets LLC, which is neither owned nor controlled by LF&Co. LF&Co., which is part of publicly-traded Lazard Ltd, has retained, among other things, its investment banking business (including its mergers and acquisitions and financial restructuring practices). Please see pages 21-22 for important disclosures and analyst certification.

INITIATING COVERAGE March 7, 2012

VERASTEM (VSTM)

BIOTECHNOLOGY

WILLIAM TANNER, PHD 212-632-1512 william.tanner@lazardcap.com COLLEEN MACKEY 212-632-6413 colleen.mackey@lazardcap.com MEREDITH CHENG 212-632-1944 meredith.cheng@lazardcap.com

RATING: BUY

PRICE: $11.10PRICE TARGET: $20MARKET CAP: $224.6 MS&P 500: 1,343NBI: 1,209

10.5

11.0

11.5

12.0

12.5

13.0

Jan

SOURCE: FactSet

VSTM: Attacking cancer at the root; initiating coverage with BUY rating and $20 price target

We believe VSTM shares will appeal to investors by virtue of the company’s world-class scientific founders, highly experienced management team and a research focus that may possess the potential to dramatically change the manner in which cancer is treated.

Targeting CSCs could improve treatment outcomes. Verastem is pioneering the development of therapies that target cancer stem cells (CSCs). Emerging evidence suggests that, while standard cancer treatments may be effective at killing cancer non-stem cells, CSCs may survive, providing opportunities for re-growth.

Technology platform designed to provide steady supply of CSCs. Verastem’s proprietary technology platform allows for the production of stable CSCs. Identification of potent CSC-killing agents may be facilitated through standard high-throughput screening techniques.

VS-507 likely first in man for treating TNBC. Human testing of lead drug candidate VS-507 is expected to begin in 2012. A modulator of the Wnt signaling pathway, VS-507 will initially be tested for treating triple-negative breast cancer (TNBC).

Valuation and risks. Our $20 PT is derived from a DCF analysis that values VS-507 for treating TNBC. Risks include successful development and regulatory approval of drug candidates as well as market competition.

DECEMBER YEAR 2010 2011E 2012E1Q11A 2Q11A 3Q11A 4Q11 YEAR

Revenue (M) $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0EBITDA (M) NM NM NM NM NM $(10) $(16)EPS $(0.59) NM NM NM NM $(1.75) $(0.82)FCF/S NM NM NM NM NM NM NM

CAPITALIZATION

Shares Outstanding (M) 20.2Total Net Debt (M) $(62)Enterprise Value (M) $163Total Debt / Capitalization NM

VALUATION 2010 2011E 2012E

P/E NM NM NMRel. to S&P 500 NM NM NMEV/EBITDA NM NM NMFCF Multiple NM NM NM

2

KEY DRIVERS TO MONITOR TRADING / DIVIDEND DATA

52-Week Range $12-$11Avg. Daily Trading Volume (000) 17Dividend / Yield $0.00 / 0.0%Share Float (M)/% Sh. Out 7 / 36.9%

1) Preclinical development of lead drug candidate VS-507 2) Initiation of human clinical testing of VS-507 3) Advancement of other candidates (VS4718 and VS-5095)

KEY RISKS TO MONITOR BENCHMARKS

ROIC NMBook Value P/S * NMPrice/Book * NMFree Cash Flow Yield * NMProjected 3-year EPS Growth Rate NMInstitutional Ownership 6%

* Last actual quarter

1) Successful clinical development of drug candidates 2) Regulatory approval of drug candidates 3) Ability to secure favorable reimbursement

FOREC AST PERCENT CH ANGE (Y /Y) DECEMBER YEAR 2010 2011E 2012E

1Q11A 2Q11A 3Q11A 4Q11 YEARRevenue NM NM NM NM NM NM NMEBITDA NM NM NM NM NM NM NMEPS NM NM NM NM NM NM NMFCF/S NM NM NM NM NM NM NM

COMPANY DESCRIPTION

Verastem debuted in the public equity markets through an IPO completed in January 2012. The company is leveraging expertise in molecular and cellular biology to develop therapies intended to kill cancer stem cells (CSCs). The approach may address a potential shortcoming of typical cancer therapies that, while somewhat effective at killing differentiated cancer cells, may spare progenitor stem cells that can allow for tumor re-growth. A key element of Verastem’s effort is a platform technology that allows for creation of CSCs with which drug candidates are screened. The ability to generate stable CSCs is fundamentally important for the discovery and development of more effective cancer treatments. The company is well funded and should have capital resources adequate to reach human proof of concept. Verastem is headquartered in Cambridge, Massachusetts.

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INVESTMENT THESIS

Founded by world-class cancer biologists and experienced venture capitalists, Verastem is developing small-molecule drugs for the treatment of cancer, with the specific focus of targeting cancer stem cells (CSCs). The underpinning theory behind Verastem’s approach is that, while typical cancer therapies may be effective in killing mature and differentiated cancer cells, ineffective killing of CSCs may provide the means for the tumors to re-grow. To facilitate development of CSC-targeting therapies, Verastem’s founders developed technologies to manipulate the epithelial-to-mesenchymal transition (EMT) to create CSCs. With them, standard high-throughput screening processes are applied to identify promising leads. Capital raised in the company’s IPO should support activities through to potential human proof of concept (POC). If Verastem is successful in the development of drugs that target CSCs, we believe there may be a high level of interest from other biopharma industry companies focused on developing cancer therapies.

REASONS TO BUY

VSTM shares are undervalued. As detailed in the Valuation section of this report, we believe VSTM shares are undervalued. Our financial analysis assumes that Verastem successfully develops VS-507 and that the drug reaches the market and is used for treating so-called triple-negative breast cancer (TNBC). If the CSC theory is valid and if killing CSCs yields a more effective treatment for cancer, Verastem could define a new paradigm in medical management of the disease.

Platform technology may provide means to accomplish what might have been challenging before. Hampering the ability to develop drugs that kill CSCs has been the inability to obtain the cells in sufficient quantities for screening of drug candidates. Verastem scientists discovered methods to create CSCs by manipulating the epithelial-to-mesenchymal transition (EMT). Obviously, if targeting CSCs does not alter the course of the disease, then the ability to generate the cells may have limited utility, especially as it relates to their use for drug candidate screening.

Companion diagnostics could provide insight into how cancers should be treated and provide another revenue stream. The importance of having companion diagnostics to “marry” with the use of therapies cannot be overstated, particularly when the genetic/phenotypic profile is predictive of whether a patient should be treated with the drug at all and if a prediction as to the likelihood of an acceptable outcome can be made. Because Verastem’s therapies would likely function mostly through the killing of CSCs, it will be important to ensure that the patients treated have tumors populated with them. It may also be important to ensure that the specific therapy is matched to the cellular defect(s) characteristic of the cancer.

Verastem’s founders are world renowned cancer biologists. We are mindful that numerous companies have been founded by accomplished scientists, yet achievement of the primary business goals has not occurred. Still, we believe that

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having a fundamentally solid understanding of the biology of CSCs is important. Co-founders Robert Weinberg, Ph.D., Eric Lander, Ph.D. and Piyush Gupta, Ph.D. have demonstrated expertise as it relates to cancer biology and CSCs and their work in the area has been published in prestigious scientific journals.

Verastem’s CEO has a strong track record of identifying technologies that may generate broad interest within the biopharma industry. In the current capital markets environment, the ability to go public at a pre-clinical stage could likely be attributed to the fact that the company is pursuing a potentially revolutionary way to treat cancer, a truly “big idea” in an industry that often presents relatively undifferentiated ones. We believe investors may also have been attracted to the caliber of the company’s founders. A unique element to the Verastem story may be prior investor experiences in companies founded by CEO Christoph Westphal. Companies he has co-founded include Alnylam, a leading developer of RNA-interfering technologies; Momenta, a developer of novel drugs based on a fundamental understanding of sugar biology; and Sirtris, a developer of drugs that may alter the aging process. Sirtris may resonate most strongly with investors given that the company was sold slightly over a year after going public (at $10 per share) for $22.50 per share. Whether Verastem could be sold remains to be determined. If, however, the company’s strategy gains greater validity (e.g., through demonstration of human POC), we believe numerous business development opportunities could unfold.

RISKS

As with practically any development-stage biotechnology company, the primary risk relates to the feasibility of technical success. Verastem is seeking to prove a hypothesis for which no clear-cut human clinical study data exist to support it. If targeting CSCs does not improve treatment outcomes, then Verastem may have to modify its business model/strategy to more closely resemble the prototypical small-cap biotech companies that develop new (if not differentiated) cancer treatments.

For pre-commercial-stage biotech companies, the need for additional capital should always be considered a risk, in our opinion. Based on Verastem’s expectations regarding capital requirements to reach human POC, we believe investors may not face a significant risk of dilution before a value-creating event could occur. If POC is established and the company needs to raise additional capital, we believe it likely that the raise would occur at a valuation above the level at which the stock currently trades.

VALUATION

Our valuation of VSTM shares is based on a DCF analysis of the commercial opportunity for treating TNBC. Until human POC has been demonstrated, therein potentially highlighting the power of Verastem’s technology, we are disinclined to attribute much value to it. Obviously, if the technology’s fidelity supports a reproducible drug development effort, we believe it would be reasonable to consider some value for the platform over and above the intrinsic value of the drugs developed using it.

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As of 2011, the total breast cancer population, defined as women alive today who have or had breast cancer, was approximately 2.6M patients (National Cancer Institute). In 2011, an estimated 230,500 new cases of invasive breast cancer were diagnosed, in addition to 58,000 non-invasive cases (American Cancer Society, Surveillance Research, 2011), representing an incidence rate of ~2% of the U.S. female population. Of the newly diagnosed patients, we assume a survival rate of 85% based on current five-year relative survival rates of 99% for localized disease, 84% for regional disease and 23% for distant-stage disease in all ages and races (American Cancer Society). Approximately 39,500 women will die in the same year from the disease, which represents 1.3% of the total breast cancer population (American Cancer Society, Surveillance Research, 2011). Lastly, of the net breast cancer population, about 15% of those will have TNBC. We maintained this net growth trajectory to 2017, the year in which we believe Verastem could launch the first drug candidate from the ongoing development efforts.

By 2017, we project a population of approximately 400,000 TNBC patients, 15% of the projected ~2.7M breast cancer patients in the U.S. With a market penetration rate of 1%, and an initial price of $65,000/year for treatment, we estimate that lead drug candidate VS-507 will capture around $260M of sales in its first year on the market. From 2017 to 2021, we project market penetration growing to 10% and, with 5% price increases taken each year, annual sales growing to $3.2B. We assume cost of sales will be 30% in 2017, falling to 25% by 2019. Exhibit 1 depicts our revenue estimates for VS-507.

Exhibit 1. Verastem Revenue Model

Source: LCM Research

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Our DCF analysis is depicted in Exhibit 2. We used a weighted average cost of capital (WACC) of 25% and a probability of technical success (pTS) of 25%. Based on our analysis, we estimate a fair value for the stock at $20 per share.

Exhibit 2. Verastem Discounted Cash Flow Analysis

Source: LCM Research

A sensitivity analysis around the per annum cost of therapy and pTS is depicted in Exhibit 3. We assumed prices and probabilities ranging from $55,000 to $85,000 and 15% to 30%, respectively. Based on these inputs, we estimate a fair value range of $11-$35.

Exhibit 3. Verastem Valuation Sensitivity

Source: LCM Research

TARGETING CANCER AT ITS ROOT

The existence of stem cells in normal tissues has been known for some time, and they are believed to play an important role in tissue-specific functions. Stem cells are capable of self renewal as well as creation of “committed” progenitor cells that may ultimately differentiate into the cells that carry out necessary activities characteristic of the organ or tissue. Stem cells have also been identified in tumors, where they exist as a minor component of the tumor but are, nevertheless, important because they are believed to have the ability to seed new tumors.

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The epithelial-mesenchymal transition (EMT) is a process that is believed to allow epithelial cells that typically interact with basement membranes and are, therefore, immobile, to resemble mesenchymal cells. Loss of need for adhesion to a basement membrane, for example, allows the mesenchymal cells to be mobile and disseminate throughout the body. Cancer cells that have undergone the EMT process, therefore, may be uniquely suited for giving rise to metastases.

Verastem is pioneering the treatment of cancer by focusing on the role of CSCs in the disease pathology. The underpinning theory is simple but elegant: Typical therapies may kill the differentiated tumor cells but may be relatively ineffective at killing CSCs. As a consequence, although the tumor may be de-bulked, the resident CSCs that remain, because they are not killed by the therapy, are available to repopulate the tumor (and perhaps metastasize to other parts of the body). Verastem scientists believe that the combination of CSC-targeting agents with typical therapies could produce a more robust treatment effect than either treatment alone.

CSC CREATION − A KEY TECHNOLOGY

Tumor cell lines/models that may be useful for screening drug candidates exist but, likely in part because the CSC theory has only recently been put forward, suitable tools are less prevalent for identifying compounds that effectively kill them. Consequently, the ability to create CSCs in adequate quantity is of paramount importance to the drug development process. In a paper in the journal Cell (“The epithelial-mesenchymal transition generates cells with properties of stem cells”, 2008, 133, 704-715), Verastem scientists and collaborators describe a means of transforming immortalized, but not tumorigenic, human mammary epithelial cells (HMLE cells) into cells with a genotypic and phenotypic profile that resembled neoplastic mammary stem cells. Specifically, expression of mRNA of epithelial markers was downregulated and mRNA of mesenchymal markers was upregulated. Cell-surface expression of the CD44 antigen increased whereas expression of the CD24 antigen decreased.

The altered genotype/phenotype was effected by expression of nuclear transcription factors Snail or Twist. Verastem scientists have developed a process wherein stable CSCs can be created from cancer “non-stem” cells. Verastem believes that the stability of the CSCs is amenable to high-throughput screening. Obviously, instability that led to genetic drift and perhaps differential response to experimental agents would undercut the reproducibility or comparability of results.

Exhibit 4 depicts the general schema for Verastem’s drug development efforts. Accessing chemical libraries and establishing high-throughput screening assays should be relatively routine as there is an abundance of compounds and cell-killing assays should be straightforward to develop. Key to the process, then, is likely the ability to generate CSCs.

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Exhibit 4. Verastem Proprietary Technology

Source: Company filings and presentation.

INITIAL EFFORTS TARGET TNBC

Verastem’s initial drug development efforts are focused on the treatment of triple-negative breast cancer (TNBC). For background, breast cancer is typically categorized by the presence of the estrogen receptor (ER), the progesterone receptor (PR) or the human epidermal growth factor receptor 2 (HER2). Cells that express none of these receptors are considered “triple negative” and the diagnosis is triple-negative breast cancer (TNBC). Approximately 15% of all breast cancers are considered to be of the TNBC variety and a poorer prognosis and lower survival rate is typically observed as compared with cancers for which some of the receptors are expressed. Owing to the absence of the receptors, and because they are drug targets themselves, traditional chemotherapy is typically not effective. Importantly, with respect to targeting CSCs, TNBC also has the proclivity to recur more often and cause patients to relapse.

Exhibit 5. TNBC growth after chemotherapy

Source: www.triplestepforthecure.org

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Wnt Pathway is Focus of Initial Efforts

VS-507 is Verastem’s lead drug candidate and the compound is a small-molecule inhibitor of the so-called Wnt pathway. Activation of the pathway is believed to be important for normal development but a role in cancer biology is also believed to exist. As depicted in Exhibit 6 (left side of the graphic), Wnt proteins bind to a cell surface receptor called Frizzled and a complex is formed with the LRP6 protein (which may serve to stabilize the complex). VS-507, a proprietary formulation of the antibiotic salinomycin, is believed to disrupt the complex, thereby inhibiting signaling of the Wnt pathway.

Exhibit 6. VS-507 mechanism of action

Source: Verastem presentation

In vitro data supporting the cell-killing ability of VS-507 were published in the journal Cell in 2009 (“Identification of selective inhibitors of cancer stem cells by high-throughput screening”, 138, 1-15). Using HMLE cells that had been modified to produce E-cadhedrin at a lower level than normal, an EMT ensued and acquisition of a mesenchymal phenotype emerged. As described in the journal article, 16,000 compounds were screened for their ability to reduce cell viability. The authors reported that 10% of the compounds that were tested reduced the viability of the modified HMLEshEcad cells but that 98% also inhibited the viability of control HMLEshCntrl cells, meaning that the compounds might not be selective for CSCs. Eight of 32 compounds that showed selective toxicity to HMLEshEcad cells were selected for additional testing. From the subsequent screening attempts, only salinomycin consistently showed cell-killing ability across a range of concentrations. The authors reported that the three other compounds tested − abamectin, etoposide and nigericin − exhibited more modest selective toxicity (2X) as compared with salinomycin (8X).

Exhibit 7 depicts results from in vitro testing of HMLER cells (HMLE cells transformed with V12H-Ras oncogene). The data depicted in the three panels on the left side of the Exhibit represent the relative levels of CD44 and CD24 antigens. As noted previously, CSCs are believed to highly express CD44 relative to CD24 and non-stem cell cancer cells are believed to express high levels of CD24 and low levels of CD44. “High” expressing CD44 cells and “low” expressing CD24 cells are framed by the pentagon shapes on the left side

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of each graphic. Noteworthy is the fact that expression of CD24 was higher relative to cells treated with placebo as compared with cells treated with paclitaxel. The interpretation may be that the relatively low number of CSCs in placebo-treated cells (vs. non-CSCs) reflects the normal stoichiometry and that the high number in paclitaxel-treated cells merely reflects the effectiveness of paclitaxel at killing non-CSCs and the relative insensitivity of CSCs to the drug. By comparison, the vast majority of cells treated with VS-507 that survive are non-CSCs. On the surface, these data support the notion that VS-507, combined with paclitaxel, might be useful for eradicating CSCs and non-CSCs.

Exhibit 7. VS-507 vs. placebo and paclitaxel

Source: Gupta et al., Cell 2009 VS-507 is currently in preclinical toxicity testing. It is anticipated that an IND will be filed by YE12 and that Phase I clinical testing will commence in early 2013. The Phase I trial will likely be a typical dose-escalation study to assess the drug’s safety and tolerability. Verastem has also discussed plans to conduct a small Phase Ib trial (n = 10-15 patients) that will primarily focus on CSC-enriched TNBC patients. Patients with tumors known to over-express the focal adhesion kinase (FAK) including ovarian, lung and prostate tumors, may be included in the trials. The efficacy endpoints of this study may include biomarkers and RECIST measurements. Exhibit 8 depicts the preliminary design of the VS-507 studies.

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Exhibit 8. Verastem clinical trial design

VS-4718 IS VERASTEM’S NEXT SHOT ON GOAL

VS-4718 is a small molecule inhibitor of the FAK enzyme. Exhibit 9 depicts the putative role of FAK in intracellular signaling processes, particularly as they relate to a possible intersection/overlap with the Wnt pathway. Note that FAK is believed to lie downstream of RTKs (receptor tyrosine kinases or growth factor receptors). To the extent that growth factors are involved in aberrant cancer cell growth, inhibition of FAK might be predicted to have an effect.

Exhibit 9. VS-4718 mechanism of action

Source: Company presentation

Results of in vitro testing of VS-4718 were published in the journal Cancer Biology and Therapy in 2010 (“PND-1186 FAK inhibitor selectively promotes tumor cell apoptosis in three-dimensional environments”, vol. 9, no. 10, 764-

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777). In those experiments, VS-4718 (designated as PND-1186 in the journal article) was shown to be effective at killing 4T1 breast carcinoma cells and ID8 ovarian carcinoma cells. The 4T1 cell line was derived from a spontaneously arising mammary tumor in BALB/c mice and is regarded as a model that resembles human breast cancer. The ID8 cell line was derived from mouse ovarian surface epithelial cells from C57B6 mice.

Exhibit 10 depicts results from a so-called scratch-wound motility assay, a measure of cell migration. 4T1 cells were seeded on fibronectin-coated plates and then “wounded” with a pipette tip. The cells were cultured with VS-4718 or without (placebo) and migration was assessed by the degree to which the cells repopulated the cleared area. Evident in the micrographs at the top of Exhibit 10 is that VS-4718 inhibited migration.

The bottom figures highlight the outcome of experiments of Balb/C mice, in which 4T1 cells were injected into the hindflank, treated with VS-4718. Noteworthy is that treatment resulted in fewer metastases and smaller tumor volume than mice treated with a placebo (PEG: PBS).

Exhibit 10. VS-4718 inhibition of 4T1 cell migration and metastasis

Source: Tanjoni et al., Cancer Bio & Ther. 2010.

Exhibit 11 depicts results from experiments testing the ability of VS-4718 to kill 4T1 tumors in Balb/c mice. In the experiments, mice were treated with VS-4718 or placebo and the viability of the tumors was assessed. In the photomicrographs at the top of the panel, the green fluorescence represents cleaved caspase-3, an enzyme the presence of which is generally believed to be indicative of apoptosis (programmed cell death).

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Exhibit 11. VS-4718 treatment results in 4T1 cell apoptosis

Source: Tanjoni et al., Cancer Bio & Ther. 2010

Exhibit 12 depicts Verastem’s pipeline and anticipated milestones related to the advancement of the assets.

Exhibit 12. Verastem Pipeline

Source: Company filings

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Exhibit 13. Verastem Upcoming Milestones

COMPETITION

Verastem may face competition from at least three other companies that are developing therapies targeting CSCs.

OncoMed Pharmaceuticals’ lead development compound is OMP-21M18 (demcizumab), a MAb currently in Phase Ib development that targets CSCs through the Delta-like ligand (DLL4). DLL4 is believed to be an activator of Notch, a signaling pathway important in stem cells and cancer. OMP-21M18 has exhibited single-agent activity in a Phase I study in heavily pretreated solid tumor patients. Phase Ib combination studies with chemotherapy in advanced non-small cell lung and pancreatic cancers are also ongoing. A second drug candidate, OMP-18R5, is in Phase I testing and it is an antibody that binds to the Frizzled receptor. By binding to Frizzled, OMP-18R5 could be predicted to have a similar effect as VS-507.

Boston Biomedical’s lead compound is BBI608, a compound that simultaneously inhibits multiple key cancer stemness pathways. The drug is in preparation for Phase III testing in patients with colorectal cancer and in various Phase II and Ib trials for multiple solid tumors. On February 29, 2012, Dainippon Sumitomo Pharma Co. announced that it reached an agreement to acquire Boston Biomedical for up to $2.63B.

Stemline Therapeutics’ drug candidates target myeloid leukemia (AML) and myelodysplastic syndrome (MDS). A multi-center Phase I/II trial of SL-401 was recently completed and single-agent activity, including durable complete responses and overall survival benefits, were observed. In addition, the drug was well tolerated by patients and non-toxic to their bone marrow. SL-401 is currently advancing into later-stage clinical trials in patients with advanced AML.

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Exhibit 14. Verastem Competition

PATENT PORTFOLIO

Verastem’s intellectual property portfolio is composed mostly of patents licensed from other entities including The Whitehead Institute, The Broad Institute and Poniard Pharmaceuticals. Verastem has filed two patent applications pertaining to VS-507. Verastem has licensed patents around its technology for screening for CSCs, EMT induction and biomarkers and inhibitors of CSC survival. Verastem’s patents and patent applications protect various parts of its technology and drugs from the mid-2020s to the early 2030s.

Exhibit 16 pictorially depicts the general nature of Verastem’s patents. Note that the patents include processes of creating CSCs, methods of screening for drug targets and the pharmacophores (or uses) themselves. Thus, we believe that the company has created a robust patent portfolio that covers all of the key aspects of the drug development process.

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Exhibit 15. Verastem patents and their applications

Source: Company materials

Exhibit 17 depicts the specific patents licensed by Verastem. Note that the company licensed patents related to FAK inhibitors. That IP could provide protection for drug candidates that follow VS-507 and function through the inhibition of that pathway.

Exhibit 16. Verastem patents

FINANCIAL FORECAST

Our financial model for Verastem includes revenue for only one product, VS-507, which we estimate will reach the market in the 2017 time frame. We assume that the company has adequate financial resources to reach human POC and

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would likely raise additional capital after that. In our model, we forecast the next equity raise occurring in 2016, one year before the projected launch of VS-507. R&D is projected to grow by 50% in 2012 and 20% in 2013, with SG&A projected to grow by 100% and 93% in the same periods, respectively. We believe these expenses will increase significantly in both 2016 and 2017 in preparation for the drug’s launch and filing of an NDA. We currently project EPS of $(0.82) and $(1.19) for 2012 and 2013, respectively.

Exhibit 17. Verastem Income Statement

Source: Company reports, LCM Research estimates

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Exhibit 18. Verastem Balance Sheet

Source: Company reports, LCM Research estimates

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Exhibit 19. Verastem Statement of Cash Flows

Source: Company reports, LCM Research estimates

VERASTEM EXECUTIVE MANAGEMENT

Exhibit 21 lists senior Verastem management. As we noted previously, Verastem’s CEO has substantial experience founding biopharma companies that possess unique assets such as technology platforms (e.g., Alnylam) or companies that may be at the forefront of certain aspects of biology (e.g., Sirtris).

Exhibit 21. Verastem Executive Management

Source: Verastem and LCM Research

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VERASTEM SCIENTIFIC ADVISORY BOARD

Exhibit 22 lists Verastem’s Scientific Advisory Board. In our opinion, the strength and experience of the SAB is relatively peerless in the industry for companies the size of Verastem. As noted previously, we believe investors are apt to gravitate towards the quality of the SAB, particularly given the relatively early stage of development of the theory of cancer stem cells and their viability as drug targets.

Exhibit 22. Verastem Scientific Advisory Board

Source: Verastem and LCM Research

VERASTEM BOARD OF DIRECTORS

Exhibit 23. Verastem Board of Directors

Source: Verastem and LCM Research

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ANALYST CERTIFICATION

All of the recommendations and views about the securities and companies in this report accurately reflect the personal views of the research analyst named on the cover of this report. No part of this research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst in this research report.

IMPORTANT DISCLOSURES

Lazard Frères & Co. LLC has received compensation for investment banking services from VSTM within the past twelve (12) months.Lazard Capital Markets LLC has acted as manager or co-manager of a securities offering on behalf of VSTM within the past twelve (12) months.Lazard Capital Markets LLC makes a market in VSTM securities.

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VSTM - Current Rating: BUY, Price Target: $20

Data source: FactSet prices / LCM ratings and target prices

DISTRIBUTION OF INVESTMENT RATINGS (AS OF 03/05/12)OVERALL DISTRIBUTION BANKING CLIENT DISTRIBUTION*

BUY NEUTRAL SELL BUY NEUTRAL SELL59% 40% 1% 15% 5% 0%

* Indicates the percentage of each category in the Overall Distribution that were banking clients of Lazard Frères in the previous 12 months.

RATING GUIDELINE (return targets may be modified by risk or liquidity issues)BUY Expected to produce a positive total return of more than 10% in the next 12 months.NEUTRAL Fairly valued; expected to product a total return of ±10% in the next 12 months.SELL Expected to product a negative total return of more than 10% in the next 12 months.

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DISCLAIMERS

This report has been prepared by Lazard Capital Markets LLC (“LCM”) in New York. It may not be reproduced, redistributed or copied in whole or in part for any purpose. This report has been approved by, and is being distributed in the US or to US persons, by LCM, which accepts responsibility for its contents in the US. Transactions undertaken in the US in any security mentioned herein must be effected through LCM or another US-registered broker-dealer, in conformity with SEC Rule 15a-6.

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This report does not constitute an offer or solicitation to buy or sell any securities referred to herein. It should not be so construed, nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. The information in this report, or on which this report is based, has been obtained from sources that LCM believes to be reliable and accurate. However, it has not been independently verified and no representation or warranty, express or implied, is made as to the accuracy or completeness of any information obtained from third parties. The information or opinions are provided as at the date of this report and are subject to change without notice. The information and opinions provided in this report take no account of the investors’ individual circumstances and should not be taken as specific advice on the merits of any investment decision. Investors should consider this report as only a single factor in making any investment decisions. Further information is available upon request. LCM may provide specialized research products or services to certain customers focusing on the prospects for individual covered stocks as compared to other covered stocks over varying time horizons or under differing market conditions. While the views expressed in these situations may not always be directionally consistent with the long-term views expressed in the analyst's published research, the analyst has a reasonable basis and any inconsistencies can be reasonably explained. LCM does not accept any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of this report or its contents.

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