~~We are pursuing duvelisib in oncology through~~remaining on treatment for at least 16 weeks. Three patients had remained on treatment for more than 32 weeks, including one who showed a ~~strategic collaboration with AbbVie. For information regarding our collaboration, please see below under the heading~~ ~~“AbbVie”~~~~in the section entitled “Strategic Alliances.”~~

In 2014, we completed two Phase 2 studies of duvelisib in inflammation and concluded our investigation of duvelisib in this therapeutic area. The first, a randomized, double-blind, placebo-controlled crossover study of patients with mild, allergic asthma, was designed to evaluate the activity and safety of duvelisib in 50 patients following an allergen inhalation challenge. Patients were randomized to receive treatment with placebo followed by duvelisibpartial response, or duvelisib followed by placebo in a two-period cross-over design, with duvelisib administered at either 1 mg BID or 5 mg BID for 14 days, or 25 mg BID for five days. We reported topline data from this study in October 2014 which showed that the study primary endpoint of significantly improving the maximum early-phase or late-phase asthmatic response as measured by FEV₁ (a standard lung function test that measures the amount of air that can be exhaled in one second) was not met at any of the doses tested. Clinical improvement in the late-phase response was observed at the 25 mg BID dose (p = 0.052) and multiple pre-specified secondary efficacy endpoints were positive at the 25 mg BID dose, including an improvement in FEV₁ area under the curve over the entire assessment period (p = 0.013) and a decrease in patients’ sensitivity to methacholine treatment, a measure of airway hyper-reactivity (p = 0.036). Additionally, the 5 mg BID and 25 mg BID doses of duvelisib significantly decreased serum levels of key mediators of airway inflammation.

The second study, a Phase 2, double-blind, randomized, placebo-controlled study, was designed to evaluate the efficacy, safety and pharmacokinetics of duvelisib dosed at either 0.5 mg, 1.0 mg or 5.0 mg BID for 12 weeks on background methotrexate comparedPR, to treatment with ~~placebo plus methotrexate. The study evaluated 322 adults~~IPI-549. This patient was originally diagnosed with ~~active moderate-to-severe rheumatoid arthritis receiving a stable dose of methotrexate. The primary efficacy endpoint~~advanced peritoneal mesothelioma in October 2013 and had undergone four prior treatments. As of the ~~study was ACR20 response rate at 12~~October 2017 data cutoff date, after 60 weeks ~~which is defined as~~on 20 mg QD of IPI-549, the ~~proportion of~~

~~patients who achieve at least a 20% improvement~~patient’s tumor had decreased in American College of Rheumatology, or ACR, response criteria after 12 weeks of study treatment. Topline data reported from this study in January 2015 demonstrated that the primary efficacy endpoint of the study was not met at any of the doses tested. Based on the results from these studies, we will not proceed with further clinical development of duvelisib or IPI-443, our second oral inhibitor of PI3K-delta and gamma, in inflammatory diseases, and we expect that any further development of IPI-443 in inflammatory diseases would be conducted through out-licensing or partnering efforts.

In August 2014, we licensed rights to our fatty acid amide hydrolase, or FAAH program, to FAAH Pharma Inc., or FAAH Pharma, a company pursuing the clinical development of IPI-940 to investigate its potential to treat neuropathic pain. We received a 23% ownership in FAAH Pharma in exchange for the license. FAAH Pharma receives funding from TVM Life Science Ventures VII, L.P., or TVM, through potential milestone payments.

We were incorporated in California on March 22, 1995 under the name IRORI and, in 1998, we changed our name to Discovery Partners International, Inc., or DPI. In July 2000, we reincorporated in Delaware. On September 12, 2006, DPI completed a merger with Infinity Pharmaceuticals, Inc., or IPI, pursuant to which a wholly-owned subsidiary of DPI merged with and into IPI. IPI, the surviving corporation in the merger, changed its name to Infinity Discovery, Inc., or IDI, and became a wholly owned subsidiary of DPI. In addition, we changed our corporate name from Discovery Partners International, Inc. to Infinity Pharmaceuticals, Inc.size by 42%, and ~~our ticker symbol~~the patient remained on study at the ~~NASDAQ Global Market to “INFI.” Our common stock currently trades on the NASDAQ Global Select Market.~~

~~Our principal executive offices are located at 780 Memorial Drive, Cambridge, Massachusetts 02139, and our telephone number at that address is (617) 453-1000.~~

The Infinity logo and all other Infinity product names are trademarks of Infinity Pharmaceuticals, Inc. or its subsidiary in the United States and in other select countries. We may indicate U.S. trademark registrations and U.S. trademarks with the symbols “^®~~” and “™”, respectively. Other third-party logos and product/trade names are registered trademarks or trade names of their respective owners.~~

Historically, our product development programs have arisen from a combination of internally developed programs and strategic licensing arrangements. We focus on targets that have the potential to fundamentally change how disease is treated and where we believe we can use our scientific capabilities to identify differentiated product candidates with well-defined development paths. We seek to leverage what we believe to be our innovative approaches to drug discovery and translational medicine and our robust internal capabilities across all of the relevant scientific disciplines, including medicinal chemistry, cell biology, biochemistry, pharmacology and molecular pathology. Our goal is to integrate these disciplines to rapidly identify product candidates and to better understand which populations of patients may benefit most from our product candidates.

~~Duvelisib, our clinical candidate directed to the inhibition of PI3K, arose out~~time of our ~~strategic licensing arrangement with Intellikine, Inc.,~~January 8, 2018 update at the 36th Annual J.P. Morgan Healthcare Conference, or ~~Intellikine, which was acquired in January 2012 by Takeda Pharmaceutical Company Limited, acting through its Millennium business unit.~~ the J.P. Morgan Conference.

~~completion of~~ preclinical testing including laboratory tests, animal studies and formulation studies, which must be performed in ~~compliance~~accordance with the FDA’s good laboratory practice, or GLP, ~~regulations;~~

regulations and standards;

submission to the FDA of an investigational new drug, or IND, for human clinical testing, which ~~allows~~must become effective before human clinical trials ~~to begin unless the FDA objects within 30 days;~~

may begin;

approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated;

performance of adequate and well-controlled human clinical trials to establish the safety, potency and purity of the product candidate for each proposed indication, in accordance with current good clinical practices, or ~~GCP, to establish the safety and efficacy of the proposed drug product for each indication;~~

GCP;

preparation and submission to the FDA of an NDA, for a ~~new~~ drug ~~application,~~product which includes not only the results of the clinical trials, but also, detailed information on the chemistry, manufacture and quality controls for the product candidate and proposed labelling for one or ~~NDA;~~

more proposed indication(s);

~~satisfactory~~ review of the ~~NDA~~product candidate by an FDA advisory committee, where appropriate or if applicable;

satisfactory completion of ~~one or more~~an FDA ~~inspections~~inspection of the manufacturing facility or facilities, including those of third parties, at which the product candidate or components thereof are ~~produced~~manufactured to assess compliance with current ~~Good Manufacturing Practices,~~good manufacturing practices, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity;

satisfactory completion of any FDA audits of the non-clinical and clinical trial sites to assure compliance with ~~GCPs~~GCP and the integrity of clinical data in support of the ~~clinical data;~~

NDA;

payment of user fees and securing FDA approval of the ~~NDA;~~NDA to allow marketing of the new drug product; and

compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation ~~Strategies,~~Strategy, or REMS, and the potential requirement to conduct any post-approval studies required by the FDA.

~~Phase 2: The product candidate is administered to~~ a limited patient population ~~to: (1) assess the efficacy of the candidate in specific, targeted indications; (2) assess dosage tolerance and optimal dosage; and (3)~~to identify possible adverse effects and safety ~~risks.~~

risks, evaluate the efficacy of the product candidate for specific targeted indications and determine dose tolerance and optimal dosage. Multiple Phase ~~3: The~~2 clinical trials may be conducted by the sponsor to obtain information prior to beginning larger and more costly Phase 3 clinical trials. Phase 2 clinical trials are well controlled, closely monitored and conducted in a limited patient population.

~~These~~effectiveness after approval. Such post-approval trials are ~~commonly~~typically referred to as ~~pivotal studies.~~ Phase 4 clinical trials. These studies are used to gain additional experience from the treatment of a larger number of patients in the intended treatment group and to further document a clinical benefit in the case of drugs approved under accelerated approval regulations. Failure to exhibit due diligence with regard to conducting Phase 4 clinical trials could result in withdrawal of approval for products.

restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

fines, warning letters or holds on post-approval clinical trials;

refusal of the FDA to approve pending ~~NDAs~~applications or supplements to approved ~~NDAs,~~applications, or suspension or revocation of product license approvals;

product seizure or detention, or refusal to permit the import or export of products; or

injunctions or the imposition of civil or criminal penalties.

the required patent information has not been filed;

the listed patent has expired;

the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or

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

the federal Anti-Kickback Statute, which prohibits, among other things, ~~device design, manufacturing~~persons and ~~labeling. PMA applications are subject~~entities from knowingly and willfully soliciting, offering, paying, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an ~~application fee, which exceeds $250,000~~individual for, ~~most PMAs. In addition, PMAs for certain devices must generally include~~or the ~~results from extensive preclinical and adequate and well-controlled clinical trials to establish the safety and effectiveness~~purchase, order or recommendation of, ~~the device for each indication~~any good or service, for which FDA approval is sought. In particular, for a diagnostic, the applicant must demonstrate that the diagnostic produces reproducible results when the same sample is tested multiple times by multiple users at multiple laboratories. As part of the PMA review, the FDA will typically inspect the manufacturer’s facilities for compliance with the Quality System Regulation, or QSR, which imposes elaborate testing, control, documentation and other quality assurance requirements.

PMA approval is not guaranteed, and the FDA may ultimately respond to a PMA submission with a not approvable determination based on deficiencies in the application and require additional clinical trial or other data thatpayment may be expensive and time-consuming to generate and that can substantially delay approval. If the FDA’s evaluation of the PMA application is favorable, the FDA typically issues an approvable letter requiring the applicant’s agreement to specific conditions,made, in whole or in part, under a federal health care program such as ~~changes in labeling,~~Medicare and Medicaid;

the federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or specific additional information, such as submission of final labeling, in order to secure final approval of the PMA. If the FDA concludes that the applicable criteria have been met, the FDA will issue a PMA for the approved indications, which can be more limited than those originally sought by the applicant. The PMA can include post-approval conditions that the FDA believes necessary to ensure the safety and effectiveness of the device, including,entities from, among other things, ~~restrictions on labeling, promotion, sale~~knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false, fictitious or fraudulent or knowingly making, using or causing to made or used a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government.

the federal Health Insurance Portability and ~~distribution.~~

~~After~~Accountability Act of 1996, or HIPAA, which created additional federal criminal laws that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a ~~device is placed on~~scheme to defraud any health care benefit program or making false statements relating to health care matters;

HIPAA, as amended by the ~~market, it remains subject~~Health Information Technology for Economic and Clinical Health Act, and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, which impose obligations, including mandatory contractual terms, with respect to ~~significant regulatory requirements. Medical devices may be marketed only for~~safeguarding the ~~uses~~privacy, security and ~~indications for~~transmission of individually identifiable health information;

the federal false statements statute, which ~~they are cleared~~prohibits knowingly and willfully falsifying, concealing ·or covering up a material fact or ~~approved. Device manufacturers must also establish registration and device listings~~making any materially false statement in connection with the ~~FDA. A~~delivery of or payment for health care benefits, items or services;

the federal transparency requirements known as the federal Physician Payments Sunshine Act, under the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act, or the ACA, which requires certain manufacturers of drugs, devices, biologics and medical ~~device manufacturer’s manufacturing processes~~supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, within the United States Department of Health and ~~those~~Human Services, information related to payments and other transfers of ~~its suppliers~~value made by that entity to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and

analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to health care items or services that are ~~required~~reimbursed by non-government third-party payors, including private insurers.

an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drug agents or biologic agents, which is apportioned among these entities according to their market share in certain government health care programs;

an increase in the rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13% of the average manufacturer price for branded and generic drugs, respectively;

a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts to negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer's outpatient drugs to be covered under Medicare Part D;

extension of manufacturers' Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations, unless the drug is subject to ~~periodic unscheduled inspections~~discounts under the 340B drug discount program;

a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;

expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers' Medicaid rebate liability;

expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;

new requirements under the federal Physician Payments Sunshine Act for drug manufacturers to report information related to payments and other transfers of value made to physicians and teaching hospitals as well as ownership or investment interests held by physicians and their immediate family members;

a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;

creation of the Independent Payment Advisory Board, which, if and when impaneled, will have authority to recommend certain changes to the Medicare program that could result in reduced payments for prescription drugs; and

establishment of a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.

the applicant must complete an identified program of studies within a time period specified by the competent authority, the results of which form the basis of a reassessment of the benefit/risk profile;

the medicinal product in question may be supplied on medical prescription only and may in certain cases be administered only under strict medical supervision, possibly in a hospital and in the case of a radiopharmaceutical, by an authorized person; and

the package leaflet and any medical information must draw the attention of the medical practitioner to the fact that the particulars available concerning the medicinal product in question are as yet inadequate in certain specified respects.

Compliance with the EU’s stringent pharmacovigilance or safety reporting rules must be ensured. These rules can impose post-authorization studies and additional monitoring obligations.

The manufacturing of authorized medicinal products, for which a separate manufacturer’s license is mandatory, must also be conducted in strict compliance with the applicable EU laws, regulations and guidance, including Directive 2001/83/EC, Directive 2003/94/EC, Regulation (EC) No 726/2004 and the European Commission Guidelines for Good Manufacturing Practice. These requirements include compliance with EU cGMP standards when manufacturing medicinal products and active pharmaceutical ingredients, including the manufacture of active pharmaceutical ingredients outside of the EU with the intention to import the active pharmaceutical ingredients into the EU.

The marketing and promotion of authorized drugs, including industry-sponsored continuing medical education and advertising directed toward the prescribers of drugs and/or the general public, are strictly regulated in the EU notably under Directive 2001/83EC, as amended, and EU Member State laws. Direct-to-consumer advertising of prescription medicines is prohibited across the EU.

Our estimate as to how long we ~~acquire a third party, or if~~expect our existing cash and cash equivalents to be able to continue to fund our operations is based on assumptions that may prove to be wrong, and we acquire or license rights to additional product candidates or new technologies from one or more third parties. Our need to raise additional funds may also be accelerated for other reasons, including without limitation if:

could use our ~~product candidates require more extensive clinical or preclinical testing~~available capital resources sooner than we currently ~~expect;~~

~~we advance~~expect. Further, changing circumstances, some of which may be beyond our ~~product candidates into clinical trials for more indications~~control, could cause us to consume

capital significantly faster than we currently ~~expect;~~

anticipate, and we ~~advance more~~may need to seek additional funds sooner than planned. Our future funding requirements, both short-term and long-term, will depend on many factors, including, but not limited to:

the scope, progress, results and costs of ~~our product candidates than expected into costly later stage~~developing IPI-549, currently in clinical ~~trials;~~

development;

~~we advance more preclinical product candidates than expected into early stage clinical trials;~~

the timing of, and the costs involved in, obtaining regulatory approvals for IPI-549;

~~we acquire additional business, technologies, products~~subject to receipt of marketing approval, revenue, if any, received from commercial sales of IPI-549;

the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including litigation costs and the outcome of such litigation;

any breach, acceleration event or ~~product candidates;~~

event of default under any agreements with third parties;

the outcome of any lawsuits that could be brought against us;

the cost of acquiring raw materials for, and of manufacturing, our product candidates is higher than anticipated;

the cost or quantity required of comparator or combination drugs used in clinical studies increases;

~~we are required, or consider it advisable, to acquire or license intellectual property rights from one or more third parties; or~~

the effect of competing technological and market developments; and

~~we experience~~ a loss in our investments due to general market conditions or other reasons.

Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.

We may seek additional funding through public or private financings of equity or debt securities, but such financing may not be available on acceptable terms, orif at all. ~~In addition,~~If we raise additional funds through the ~~terms~~issuance of ~~such financings may~~additional debt or equity securities, it could result in ~~among~~dilution to our existing stockholders, increased fixed payment obligations and the existence of securities with rights that may adversely affect the rights of our existing stockholders including liquidation or other ~~things, dilution~~preferences and anti-dilution protections. For example, Takeda Pharmaceutical Company Limited, or Takeda, our PI3K licensor, elected to receive 1,134,689 shares of common stock as partial repayment for ~~stockholders~~the convertible promissory note, or the ~~incurrence~~Takeda Note, we issued to Takeda on July 26, 2017. If we incur additional indebtedness, there could be significant adverse consequences, including:

requiring us to dedicate a portion of ~~indebtedness~~our cash resources to the payment of interest and principal, and prepayment and repayment fees and penalties, thereby reducing money available to fund working capital, capital expenditures, product development and other general corporate purposes;

requiring us to grant security interests on our assets;

subjecting us to restrictive covenants that may reduce our ability to incur additional debt, make capital expenditures, create liens, redeem stock, declare dividends, and acquire, sell or license intellectual property rights, or other operating restrictions that could adversely impact our ability to conduct our business;

limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete;

placing us at a competitive disadvantage compared to our competitors that have less debt or better debt servicing options; and

increasing our vulnerability to adverse changes in general economic, industry and market conditions.

We may not have sufficient funds, and may be unable to arrange for additional financing, to pay the amounts due under any debt that we may incur. Failure to make ~~capital expenditures~~payments or ~~incur additional debt.~~ comply with other covenants under these debt instruments could result in an event of default and acceleration of amounts due. If an event of default occurs and the lenders accelerate the amounts due, we may not be able to make accelerated payments.

In addition, securing financing could require a substantial amount of time and attention from our management and may divert a disproportionate amount of their attention away from day-to-day activities, which may adversely affect our management’s ability to oversee the development of our product candidates.

We may also seek additional funds through arrangements with collaborators or other third parties, or through project financing. These arrangements would generally require us to relinquish or encumber valuable rights to ~~some of~~ our technologies, future revenue streams, or product candidates, and we may not be able to enter into such ~~arrangements~~agreements on acceptable terms, if at all.

If we are unable to obtain additional funding on a timely basis, we may be required to curtail, terminate, sell or ~~terminate some or all of our product development programs~~license rights to develop and market IPI-549 that we would otherwise prefer to develop and market ourselves, or to scale back, suspend, or terminate our business operations.

~~If our strategic alliance with AbbVie, or any future alliance we may enter into, is unsuccessful, our operations may be negatively impacted.~~

We have ~~a strategic collaboration with AbbVie Inc., or AbbVie, to research, develop~~broad discretion in the use of our available cash and ~~jointly commercialize products containing or comprised~~other sources of duvelisib, which we refer to as Duvelisib Products, in oncology indications. We refer to this agreement as the AbbVie Agreement. Pursuant to the AbbVie Agreement, AbbVie has committed to providing substantial funding ~~as well as significant capabilities in development, marketing~~ and ~~sales. However, we~~ may not be able to maintain our alliance with AbbVie or any other future alliance partner if, for example, development or approval of duvelisib or other product candidates is delayed or sales of Duvelisib Products or other products are disappointing. Further, AbbVie may be the only alliance we are able to successfully execute, making us overly dependent on the success of duvelisib in oncology indications and therefore particularly vulnerable if duvelisib or the alliance with AbbVie fails, as discusseduse them effectively.

Our management has broad discretion in the ~~next risk factor.~~

~~If an alliance partner terminates or fails to perform its obligations under agreements with us, the development and commercialization~~use of our ~~product candidates~~available cash and other sources of funding and could ~~be delayed or terminated.~~

~~The success of a strategic alliance, whether with AbbVie or any future partner, is largely dependent on the~~spend those resources ~~efforts, technology and skills brought to such alliance by such partner. The benefits of such alliances will be reduced or eliminated if any such partner does~~in ways that do not ~~devote sufficient time and resources to its alliance arrangements with us, without which we may not realize the potential commercial benefits of the arrangement, and~~improve our results of operations ~~may be adversely affected. In addition, if such partner were~~or enhance the value of our common stock. The failure by our management to ~~breach or terminate its arrangements with us or fail~~apply these funds effectively could result in financial losses that could cause the price of our common stock to ~~maintain the financial resources necessary to continue financing its portion of development, manufacturing,~~decline and commercialization costs, as applicable, we may not have the financial resources or capabilities necessary to continue development and commercialization of the product candidate on our own. Consequently,delay the development ~~and commercialization~~ of ~~the affected product candidate could be delayed, curtailed or terminated, and we may find it difficult to attract a new alliance partner for such product~~

candidate. Disputes and difficulties in these types of relationships are common, often due to priorities changing over time, conflicting priorities or conflicting interests. Merger and acquisition activity may exacerbate these conflicts.

As is the case with our strategic collaboration with AbbVie, much of the potential revenue from alliances consists of payments contingent upon the achievement of specified milestones and royalties payable on sales of any successfully developed drugs. Any such contingent revenue will depend upon our, and our alliance partner’s, ability to successfully develop, launch, market and sell new drugs. In some cases, we will not be involved in some or all of these processes, and we will depend entirely on our alliance partners. Under the AbbVie Agreement, for instance, we have granted AbbVie exclusive licenses to commercialize Duvelisib Products outside the United States. AbbVieIPI-549 or any future ~~alliance partner~~product candidate. Pending their use, we may ~~fail to develop or effectively commercialize duvelisib or future drug products if it:~~

~~decides not to devote the necessary resources because of internal constraints, such as limited personnel with the requisite scientific expertise, limited~~invest our available cash ~~resources or specialized equipment limitations, or the belief~~in a manner that ~~other product candidates may have a higher likelihood of obtaining regulatory approval or may potentially generate a greater return on investment;~~

does not ~~have sufficient resources necessary to carry the product candidate through clinical development, regulatory approval and commercialization;~~produce income or

~~cannot obtain the necessary regulatory approvals.~~

~~If AbbVie or any future alliance partner fails to develop or effectively commercialize our product candidates, we may not be able to develop and commercialize~~ that ~~product candidate independently, and our financial condition and operations would be negatively impacted.~~

~~If we are not able to attract and retain key personnel and advisors, we may not be able to operate our business successfully.~~

We are highly dependent on our executive leadership team. All of these individuals are employees-at-will, which means that neither Infinity nor the employee is obligated to a fixed term of service and that the employment relationship may be terminated by either Infinity or the employee at any time, without notice and whether or not cause or good reason exists for such termination. The loss of the services of any of these individuals might impede the achievement of our research, development and commercialization objectives. We do not maintain “key person” insurance on any of our employees.

Recruiting and retaining qualified scientific and business personnel is also critical to our success. We may not be able to attract or retain these personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel. This competition is particularly intense near our headquarters in Cambridge, Massachusetts. We also experience competition for the hiring of scientific personnel from universities and research institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development strategy. Our consultants and advisors may be employed by other entities, have commitments under consulting or advisory contracts with third parties that limit their availability to us, or both.

~~Our competitors and potential competitors may develop products that make ours less attractive or obsolete.~~

In building our product development pipeline, we have intentionally pursued targets with applicability across multiple therapeutic areas and indications. This approach gives us several product opportunities in oncology and inflammatory diseases, which are highly competitive and rapidly changing segments of the pharmaceutical industry. Many large pharmaceutical and biotechnology companies, academic institutions, governmental agencies and other public and private research organizations are pursuing the development of novel drugs that target various diseases in these segments. We currently face, and expect to continue to face,

intense and increasing competition as new products enter the market and advanced technologies become available. Moreover, there are a number of large pharmaceutical companies currently marketing and selling products in these segments including Bristol-Myers Squibb Company; the Roche Group and its subsidiary Genentech; Novartis AG; Pfizer, Inc.; and Johnson & Johnson. In addition to currently approved drugs, there are a significant number of drugs that are currently under development and may become available in the future for the treatment of various forms of cancer.

We are also aware of a number of companies developing product candidates or selling products directed to the same biological targets that our own product candidates are designed to inhibit. Specifically:

loses value.

we believe that Gilead Sciences, Inc., or Gilead; Bayer AG; Acerta Pharma BV; Rhizen Pharmaceuticals S.A.; and TG Therapeutics, Inc.; are conducting clinical trials of drugs that target the delta and/or gamma isoforms of phosphoinositide-3-kinase, or PI3K, which is the target of duvelisib; and

many companies are developing product candidates or selling products directed to disease targets such as Bruton’s Tyrosine Kinase (or BTK), B-cell lymphoma 2 (or BCL-2), Janus Kinase (or JAK), Spleen Tyrosine Kinase (or Syk), B-lymphocyte antigen CD-19, and programmed death 1/ligand 1 (or PD-1/PD-L1) in the fields of hematology-oncology, including in the specific diseases for which we are currently developing duvelisib, or for which we may develop duvelisib or other PI3K inhibitors in the future, including: Pharmacyclics, Inc. through its collaboration with Janssen Biotech; AbbVie, Inc.; Celgene Corporation; Gilead Sciences, Inc./Ono Pharmaceutical Group; Acerta Pharma BV; Incyte Corporation; MorphoSys; Roche Group and its subsidiary Genentech; Bristol-Myers Squibb Company; Novartis AG; and AstraZeneca PLC.

~~Many of our competitors have:~~

~~significantly greater financial, technical and human resources than we have, and may be better equipped to discover, develop, manufacture and commercialize product candidates than we are;~~

~~more extensive experience in preclinical testing and clinical trials, obtaining regulatory approvals and manufacturing and marketing products than we do; and/or~~

product candidates that have been approved by the FDA, such as ibrutinib, a BTK inhibitor being developed and commercialized by Pharmacyclics, Inc. for the treatment of people with mantle cell lymphoma or chronic lymphocytic leukemia (or CLL), and idelalisib, a compound targeting the delta isoform of PI3K, being developed and commercialized by Gilead Sciences, Inc. for the treatment of people with CLL, are in later-stage clinical development than our own product candidates.

Our competitors may commence and complete clinical testing of their product candidates, obtain regulatory approvals and begin commercialization of their products sooner than we and/or our strategic alliance partners may for our own product candidates. These competitive products may have superior safety or efficacy, have more attractive pharmacologic properties, or may be manufactured less expensively than our future products. If we are unable to compete effectively against these companies on the basis of safety, efficacy or cost, then we may not be able to commercialize our future products or achieve a competitive position in the market. This would adversely affect our ability to generate revenues.

~~We may encounter difficulties in managing organizational change, which could adversely affect our operations.~~

Our ability to effectively manage organizational changes and growth, depends upon the continual improvement of our processes and procedures and the preservation of our corporate culture. Under the AbbVie Agreement, we and AbbVie have created a governance structure, including committees and working groups to manage the development, manufacturing and commercialization responsibilities for the Duvelisib Products. Generally, we and AbbVie must mutually agree on decisions, although in specified circumstances either we or AbbVie would be able to break a deadlock. Any future alliance may also require implementation of a similarly

complex governing structure. We may not be able to implement improvements in an efficient or timely manner or to maintain our corporate culture during periods of organizational change. If we do not meet these challenges, we may be unable to take advantage of market opportunities, execute our business strategies or respond to competitive pressures, which in turn may give rise to inefficiencies that would increase our losses or delay our programs.

We may undertake strategic acquisitions in the future, and any difficulties from integrating acquired businesses, products, product candidates and technologies could adversely affect our business and our stock price.

We may acquire additional businesses, products, product candidates, or technologies that complement or augment our existing business. We may not be able to integrate any acquired business, product, product candidate or technology successfully or operate any acquired business profitably. Integrating any newly acquired business, product, product candidate, or technology could be expensive and time-consuming. Integration efforts often place a significant strain on managerial, operational and financial resources and could prove to be more difficult or expensive than we expect. The diversion of the attention of our management to, and any delay or difficulties encountered in connection with, any future acquisitions we may consummate could result in the disruption of our ongoing business or inconsistencies in standards, controls, procedures and policies that could adversely affect our ability to maintain relationships with customers, suppliers, collaborators, employees and others with whom we have business dealings. We may need to raise additional funds through public or private debt or equity financings to acquire any businesses, products, product candidates, or technologies which may result in, among other things, dilution for stockholders or the incurrence of indebtedness.

As part of our efforts to acquire businesses, products, product candidates and technologies or to enter into other significant transactions, we conduct business, legal and financial due diligence in an effort to identify and evaluate material risks involved in the transaction. We will also need to make certain assumptions regarding acquired product candidates, including, among other things, development costs, the likelihood of receiving regulatory approval and the market for such product candidates. If we are unsuccessful in identifying or evaluating all such risks or our assumptions prove to be incorrect, we might not realize some or all of the intended benefits of the transaction. If we fail to realize intended benefits from acquisitions we may consummate in the future, our business and financial results could be adversely affected.

In addition, we will likely incur significant expenses in connection with our efforts, if any, to consummate acquisitions. These expenses may include fees and expenses for investment bankers, attorneys, accountants and other advisers in connection with our efforts and could be incurred whether or not an acquisition is consummated. Even if we consummate a particular acquisition, we may incur as part of such acquisition substantial closure costs associated with, among other things, elimination of duplicate operations and facilities. In such case, the incurrence of these costs could adversely affect our financial results for particular quarterly or annual periods.

~~Our investments are subject to risks that may cause losses and affect the liquidity of these investments.~~

As of December 31, 2014, we had approximately $333 million in cash, cash equivalents and available-for-sale securities. We historically have invested these amounts in money market funds, corporate obligations, U.S. government-sponsored enterprise obligations, U.S. Treasury securities and mortgage-backed securities meeting the criteria of our investment policy, which prioritizes the preservation of our capital. Corporate obligations may include obligations issued by corporations in countries other than the United States, including some issues that have not been guaranteed by governments and government agencies. Our investments are subject to general credit, liquidity, market and interest rate risks and instability in the global financial markets. We may realize losses in the fair value of these investments or a complete loss of these investments. In addition, should our investments cease paying or reduce the amount of interest paid to us, our interest income would suffer. These market risks associated with our investment portfolio may have a material adverse effect on our financial results and the availability of cash to fund our operations.

~~The estimates and judgments we make, or the assumptions on which we rely, in preparing our consolidated financial statements could prove inaccurate.~~

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of our assets, liabilities, revenues and expenses. Such estimates and judgments include those related to revenue recognition, accrued expenses, assumptions in the valuation of stock-based compensation and income taxes. We base our estimates and judgments on historical experience, facts and circumstances known to us and on various assumptions that we believe to be reasonable under the circumstances. These estimates and judgments, or the assumptions underlying them, may change over time or prove inaccurate. If this is the case, we may be required to restate our financial statements as we did in 2011, which could in turn subject us to securities class action litigation. Defending against such potential litigation relating to a restatement of our financial statements would be expensive and would require significant attention and resources of our management. Moreover, our insurance to cover our obligations with respect to the ultimate resolution of any such litigation may be inadequate. As a result of these factors, any such potential litigation could have a material adverse effect on our financial results and cause our stock price to decline. Under our strategic alliance termination agreements, Mundipharma and Purdue continue to have the right to audit research and development expenses incurred by us during the term of our former strategic alliance to verify the research and development funding amounts previously paid by Mundipharma and Purdue and have, in the past, exercised such rights. If, as a result of any audit, it is determined that Mundipharma and Purdue have overpaid research and development expenses, we will be required to refund the amount of such overpayment, plus interest, and if such amount is material it could adversely impact our financial results and available cash and require us to restate prior period revenue.

~~If we are not able to maintain effective internal control under Section 404 of the Sarbanes-Oxley Act, our business and stock price could be adversely affected.~~

Section 404 of the Sarbanes-Oxley Act of 2002 requires us, on an annual basis, to review and evaluate our internal control and requires our independent auditors to attest to the effectiveness of our internal controls. Any failure by us to maintain the effectiveness of our internal control in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act, as such requirements exist today or may be modified, supplemented or amended in the future, could have a material adverse effect on our business, operating results and stock price.

Risks Related to the Development and Commercialization of IPI-549 and Any Future Product Candidate

our ability to raise additional capital;

initiation, enrollment and successful completion of clinical trials, including in combination with other agents;

a safety, tolerability and efficacy profile that is satisfactory to the U.S. Food and Drug Administration, or FDA, or any comparable foreign regulatory authority for marketing approval;

timely receipt of marketing approvals from applicable regulatory authorities;

the extent of any required post-marketing approval commitments to applicable regulatory authorities;

establishment of supply arrangements with third-party raw materials suppliers and manufacturers;

establishment of arrangements with third-party manufacturers to obtain finished drug product ~~candidates remain~~that is appropriately packaged for sale;

adequate ongoing availability of raw materials and drug product for clinical development and any commercial sales;

obtaining and maintaining patent, trade secret protection and regulatory exclusivity, both in the United States and internationally;

protection of our rights in our intellectual property portfolio;

successful launch of commercial sales following any marketing approval;

a continued acceptable safety profile following any marketing approval;

commercial acceptance by patients, the medical community and third-party payors; and

our ability to compete with other therapies.

clinical practice patterns and standards of ~~accelerated approval is dependent on a number~~care that vary widely among countries;

non-U.S. regulatory authority requirements that could restrict or limit our ability to conduct our clinical trials;

administrative burdens of factors including whether duvelisib has demonstrated a meaningful benefit over available therapies. We cannot guarantee that duvelisib will qualify for accelerated approval. In particular, we are aware that Gilead has received accelerated approval for idelalisib, its product candidate to treat follicular lymphoma. If Gilead is able to complete its confirmatory studyconducting clinical trials under multiple non-U.S. regulatory authority schema;

foreign exchange fluctuations; and ~~receive full approval to market idelalisib for the treatment~~

diminished protection of follicular lymphoma faster than anticipated, our efforts to seek accelerated approval for duvelisib for the treatment of follicular lymphoma may be materially adversely affected. Moreover, even if we are able to receive accelerated approval for duvelisib the FDA may upon review of data from DYNAMO+R later decide that duvelisib no longer meets the conditions for approval resultingintellectual property in ~~revocation of approval.~~

~~Our product candidates~~some countries.

unfavorable results of discussions with the FDA or comparable foreign authorities regarding the scope or design of our clinical trials;

delays in receiving, or the inability to obtain, required approvals from institutional review boards or other reviewing entities at clinical sites selected for participation in our clinical trials;

delays in enrolling patients into clinical trials;

a lower than anticipated retention rate of patients in clinical trials;

the need to repeat or discontinue clinical trials as a result of inconclusive or negative results or unforeseen complications in testing or because the results of later trials may not confirm positive results from earlier preclinical studies or clinical trials;

inadequate supply, delays in distribution or deficient quality of, or inability to purchase or manufacture drug product, comparator drugs or other materials necessary to conduct our clinical trials;

unfavorable FDA or other foreign regulatory inspection and review of a clinical trial site, Infinity, or an Infinity vendor, or records of any clinical or preclinical investigation;

serious and unexpected drug-related side effects experienced by participants in our clinical trials, which may occur even if they were not observed in earlier trials or only observed in a limited number of participants;

a finding that the trial participants are being exposed to unacceptable health risks;

the placement by the FDA or a foreign regulatory authority of a clinical hold on a trial; or

any restrictions on, or post-approval commitments with regard to, any regulatory approval we ultimately obtain that render the product candidate not commercially viable.

regulators or institutional review boards may not authorize us, any collaborators or our or their investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;

we, or any collaborators, may have delays in reaching or fail to reach agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites;

clinical trials of IPI-549 may produce unfavorable or inconclusive results;

we, or any collaborators, may decide, or regulators may require us or them, to conduct additional clinical trials or abandon IPI-549;

the number of patients required for clinical trials of IPI-549 may be larger than we, or any collaborators, anticipate; patient enrollment in these clinical trials may be slower than we, or any collaborators, anticipate; or participants may drop out of these clinical trials at a higher rate than we, or any collaborators, anticipate;

the cost of planned clinical trials of IPI-549 may be greater than we anticipate;

our third-party contractors or those of any collaborators, including those manufacturing IPI-549 or components or ingredients thereof or conducting clinical trials on our behalf or on behalf of any collaborators, may fail to comply with regulatory requirements or meet their contractual obligations to us or any collaborators in a timely manner or at all;

patients that enroll in a clinical trial may misrepresent their eligibility to do so or may otherwise not comply with the clinical trial protocol, resulting in the need to drop the patients from the clinical trial, increase the needed enrollment size for the clinical trial or extend the clinical trial’s duration;

we, or any collaborators, may have to delay, suspend or terminate clinical trials of IPI-549 for various reasons, including a finding that the participants are being exposed to unacceptable health risks, undesirable side effects or other unexpected characteristics of IPI-549;

regulators or institutional review boards may require that we, or any collaborators, or our or their investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or their standards of conduct, a finding that the participants are being exposed to unacceptable health risks, undesirable side effects or other unexpected characteristics of IPI-549 or findings of undesirable effects caused by a chemically or mechanistically similar product or product candidate;

the FDA or comparable foreign regulatory authorities may disagree with our, or any collaborators’, clinical trial designs or our or their interpretation of data from preclinical studies and clinical trials;

the FDA or comparable foreign regulatory authorities may fail to approve or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which we, or any collaborators, enter into agreements for clinical and commercial supplies;

the supply or quality of raw materials or manufactured product candidates or other materials necessary to conduct clinical trials of IPI-549 may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply; and

the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient to obtain marketing approval.

the size and nature of the patient population;

the severity of the disease under investigation;

the nature and complexity of the trial protocol, including eligibility criteria for the trial;

the number of clinical trial sites and the proximity of patients to those sites;

standard of care in disease under investigation;

the commitment of clinical investigators to identify eligible patients; ~~and~~

competing studies or ~~trials.~~

trials; and

clinicians’ and patients’ perceptions as to the ~~availability~~potential advantages and risks of ~~safe and effective treatments~~the drug being studied in relation to other available therapies, including any new drugs that may be approved for the relevant disease being studied may impact patient enrollment in our clinical trials. For example, Pharmacyclics, Inc. has received approval to manufacture and market ibrutinib, a BTK inhibitor for the treatment of CLL, an indication in whichindications we are currently evaluating duvelisib in a Phase 3 clinical trial, and Gilead has received accelerated approval to manufacture and market idelalisib for the treatment of follicular lymphoma, an indication for which we are currently evaluating duvelisib in our DYNAMO and DYNAMO+R Studies.

investigating.

the inclusion of a placebo arm in a trial;

possible inactivity or low activity of the product candidate being tested at one or more of the dose levels being tested;

the occurrence of adverse side effects, whether or not related to the product candidate; and

the availability of numerous alternative treatment options, including clinical trials evaluating competing product candidates, that may induce patients to discontinue their participation in the trial.

timing of our receipt of any marketing approvals, the terms of any such approvals and the countries in which any such approvals are obtained;

timing of market introduction of competitive products;

lower demonstrated clinical safety or efficacy, or less convenient or more difficult route of administration, compared to competitive products;

lack of cost-effectiveness;

lack of reimbursement from government payors, managed care plans and other third-party payors;

prevalence and severity of side effects;

potential advantages of alternative treatment methods;

whether it is designated under physician treatment guidelines as a first, second or third line therapy;

changes in the standard of care for targeted indications;

limitations or warnings, including distribution or use restrictions, contained in the product’s approved labeling;

safety concerns with similar products marketed by others;

the reluctance of the target population to try new therapies and of physicians to prescribe those therapies;

the lack of success of our physician education programs; and

ineffective sales, marketing and distribution support.

different regulatory requirements for approval of ~~duvelisib~~drugs and biologics in foreign countries;

reduced protection for intellectual property rights;

unexpected changes in tariffs, trade barriers and regulatory requirements;

economic weakness, including inflation, or political instability in particular foreign economies and markets;

compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;

workforce uncertainty in countries where labor unrest is more common than in the ~~treatment of follicular lymphoma, an indication~~United States;

production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

business interruptions resulting from geopolitical actions, including war and terrorism or natural disasters including earthquakes, typhoons, floods and fires.

does not or cannot devote the necessary resources to the development, marketing and distribution of such product or products;

decides not to pursue development and commercialization of the program or to continue or renew development or commercialization programs, based on clinical trial results, changes in the collaborators’ strategic focus or available funding, the belief that other product candidates may have a higher likelihood of obtaining regulatory approval or potential to generate a greater return on investment, or external factors, such as an acquisition, that divert resources or create competing priorities;

does not perform its obligations as expected;

does not have sufficient resources necessary or is otherwise unable to carry the program through clinical development, regulatory approval and commercialization;

cannot obtain the necessary regulatory approvals;

delays clinical trials, provides insufficient funding for a clinical trial program, stops a clinical trial or abandons the program, repeats or conducts new clinical trials or requires a new formulation of the program for clinical testing;

independently develops, or develops with third parties, products that compete directly or indirectly with the program;

does not properly maintain or defend our intellectual property rights or uses our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation;

infringes the intellectual property rights of third parties, which may expose us to litigation and potential liability; or

terminates the collaboration prior to its completion.

pay substantial damages;

stop developing, manufacturing and/or commercializing IPI-549;

develop non-infringing product candidates, technologies and methods; and

obtain one or more licenses from other parties, which could result in our paying substantial royalties or the granting of cross-licenses to our technologies.

others may be able to make products that are similar to our product candidates but that are not covered by the claims of the patents that we own or license or may own in the future;

we, or any partners or collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future;

we, or any partners or collaborators, might not have been the first to file patent applications covering certain of our or their inventions;

others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or licensed intellectual property rights;

it is possible that our pending licensed patent applications or those that we may own in the future will not lead to issued patents;

issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors;

our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;

we may not develop additional proprietary technologies that are patentable;

the patents of others may have an adverse effect on our business; and

we may choose not to file a patent for certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.

restrictions on such products, manufacturers or manufacturing processes;

restrictions on the labeling or marketing of a product;

restrictions on distribution or use of a product;

requirements to conduct post-marketing studies or clinical trials;

warning letters or untitled letters;

withdrawal of the products from the market;

refusal to approve pending applications or supplements to approved applications that we submit;

damage to relationships with any potential collaborators;

unfavorable press coverage and damage to our reputation;

fines, restitution or disgorgement of profits or revenues;

suspension or withdrawal of marketing approvals;

refusal to permit the import or export of our products;

injunctions or the imposition of civil or criminal penalties; and

litigation involving patients using our products.

the federal ~~government and the states in which we conduct our business. These laws and regulations include:~~

~~the anti-kickback provisions of the Social Security Act, which prohibit,~~Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, ~~an item or service~~ or the ~~purchasing~~purchase, order or ~~ordering~~recommendation or arranging of, aany good or service, for which payment may be made under a federal healthcare ~~programs~~program such as ~~the~~ Medicare and ~~Medicaid programs;~~

Medicaid;

the federal ~~false claims laws which prohibit,~~False Claims Act imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things, ~~individuals or entities from~~ knowingly presenting, or causing to be presented, false or fraudulent claims for payment ~~from Medicare, Medicaid,~~by a federal healthcare program or ~~other third-party payors that are~~making a false statement or ~~fraudulent,~~record material to payment of a false claim or avoiding, decreasing or concealing an obligation to pay money to the federal government, with potential liability including mandatory treble damages and ~~which may apply~~significant per-claim penalties, currently set at $5,500 to ~~entities like us which provide coding and billing advice to customers;~~

$11,000 per false claim;

the federal Health Insurance Portability and Accountability Act of 1996, ~~which prohibits~~or HIPAA, imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare ~~matters~~matters;

HIPAA, as amended by the Health Information Technology for Economic and ~~which~~Clinical Health Act and its implementing regulations, also imposes ~~certain requirements relating~~obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

the ~~Federal Food, Drug,~~federal Physician Payments Sunshine Act requires applicable manufacturers of covered drugs to report payments and ~~Cosmetic Act, which, among~~ other ~~things, strictly regulates drug marketing, prohibits manufacturers from marketing drugs for off-label use~~transfers of value to physicians and ~~regulates the distribution of drug samples;~~teaching hospitals; and

analogous state ~~law equivalents of each of the above federal~~and foreign laws and regulations, such as state anti-kickback and false claims laws ~~which~~and transparency statutes, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by ~~any~~non-governmental third-party ~~payor,~~payors, including ~~commercial~~

private insurers.

insurers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts.

Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures. State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

If our operations are found to be in violation of any of the laws described above or any governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment or restructuring of our operations. Any penalties, damages, fines, curtailment or restructuring of our operations could adversely affect our financial results. We are developing and implementing a corporate compliance program designed to ensure that we will market and sell any future products that we successfully develop from our product candidates in compliance with all applicable laws and regulations, but we cannot guarantee that this program will protect us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.

~~Risks Related~~

Efforts to ~~Our Field~~

Weensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. It is possible that governmental authorities will conclude that our business practices may ~~have significant product liability exposure~~not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may ~~harm~~apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion of products from government funded healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations. If any of the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

Recently enacted and future legislation may increase the difficulty and cost for us and any future collaborators to obtain marketing approval of and commercialize our product candidates and affect the prices we, or they, may obtain.

In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability, or the ability of any future collaborators, to profitably sell any products for which we, or they, obtain marketing approval. We expect that current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we, or any future collaborators, may receive for any approved products.

In the United States, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or Medicare Modernization Act, changed the way Medicare covers and pays for pharmaceutical products. The legislation expanded Medicare coverage for drug purchases by the elderly and introduced a new reimbursement methodology based on average sales prices for physician administered drugs. In addition, this legislation provided authority for limiting the number of drugs that

will be covered in any therapeutic class. Cost reduction initiatives and other provisions of this legislation could decrease the coverage and price that we receive for any approved products. While the Medicare Modernization Act applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction in reimbursement that results from the Medicare Modernization Act may result in a similar reduction in payments from private payors.

In March 2010, then-President Obama signed into law the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively the ACA. Among the provisions of the ACA of potential importance to our business and IPI-549, including, without limitation, our ~~reputation.~~

~~We face exposure~~ability to ~~significant product liability or other claims if~~commercialize and the prices we may obtain for any of our product candidates ~~is alleged to have caused harm. These risks~~and that are ~~inherent~~approved for sale, are the following:

an annual, non-deductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic products;

an increase in the ~~testing, manufacturing~~statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;

expansion of federal healthcare fraud and ~~marketing~~abuse laws, including the False Claims Act and the Anti-Kickback Statute, new government investigative powers and enhanced penalties for noncompliance;

a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices;

extension of ~~human medicinal products. Although~~manufacturers’ Medicaid rebate liability;

expansion of eligibility criteria for Medicaid programs;

expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;

new requirements to report financial arrangements with physicians and teaching hospitals;

a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and

a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted. In August 2011, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2024 unless additional Congressional action is taken. The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we ~~do not currently commercialize~~may obtain for any ~~products, claims could be made against us based on the use~~ of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.

We expect that these healthcare reforms, as well as other healthcare reform measures that may be adopted in ~~clinical trials.~~ the future, may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product and/or the level of reimbursement physicians receive for administering any approved product we might bring to market. Reductions in reimbursement levels may negatively impact the prices we receive or the frequency with which our products are prescribed or administered. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. Since enactment of the ACA, there have been numerous legal challenges and Congressional actions to repeal and replace provisions of the law. In May 2017, the U.S. House of Representatives passed legislation known as the American Health Care Act of 2017. Thereafter, the Senate Republicans introduced and then updated a bill to replace the ACA known as the Better Care Reconciliation Act of 2017. The Senate Republicans also introduced legislation to repeal the ACA without companion legislation to replace it, and a “skinny” version of the Better Care Reconciliation Act of 2017. In addition, the Senate considered proposed healthcare reform legislation known as the Graham-Cassidy bill. None of these measures was passed by the U.S. Senate.

The Trump Administration has also taken executive actions to undermine or delay implementation of the ACA. In January 2017, President Trump signed an Executive Order directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. In October 2017, the President signed a second Executive Order allowing for the use of association health plans and short-term health insurance, which may provide fewer health benefits than the plans sold through the ACA

exchanges. At the same time, the Administration announced that it will discontinue the payment of cost-sharing reduction, or CSR, payments to insurance companies until Congress approves the appropriation of funds for such CSR payments. The loss of the CSR payments is expected to increase premiums on certain policies issued by qualified health plans under the ACA. A bipartisan bill to appropriate funds for CSR payments was introduced in the Senate, but the future of that bill is uncertain.

More recently, with enactment of the Tax Cuts and Jobs Act of 2017, which was signed by the President on December 22, 2017, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, will become effective in 2019. According to the Congressional Budget Office, the repeal of the individual mandate will cause 13 million fewer Americans to be insured in 2027 and premiums in insurance markets may rise. Further, each chamber of the Congress has put forth multiple bills designed to repeal or repeal and replace portions of the ACA. Although none of these measures has been enacted by Congress to date, Congress may consider other legislation to repeal and replace elements of the ACA. The Congress will likely consider other legislation to replace elements of the ACA during the next Congressional session.

We ~~currently~~will continue to evaluate the effect that the ACA and its possible repeal and replacement could have on our business. It is possible that repeal and replacement initiatives, if enacted into law, could ultimately result in fewer individuals having health insurance coverage or in individuals having insurance coverage with less generous benefits. While the timing and scope of any potential future legislation to repeal and replace ACA provisions is highly uncertain in many respects, it is also possible that some of the ACA provisions that generally are not favorable for the research-based pharmaceutical industry could also be repealed along with ACA coverage expansion provisions. Accordingly, such reforms, if enacted, could have an adverse effect on anticipated revenue from product candidates that we may successfully develop and for which we may obtain marketing approval and may affect our overall financial condition and ability to develop commercialize product candidates.

The costs of prescription pharmaceuticals in the United States has also been the subject of considerable discussion in the United States, and members of Congress and the Administration have stated that they will address such costs through new legislative and administrative measures. The pricing of prescription pharmaceuticals is also subject to governmental control outside the United States. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial ~~insurance and will seek to obtain product liability insurance prior to~~that compares the ~~commercial launch of any~~cost effectiveness of our product ~~candidates. Our insurance may not, however, provide adequate coverage against potential liabilities. Furthermore, clinical trial and product liability insurance~~candidates to other available therapies. If reimbursement of our products is ~~becoming increasingly expensive. As a result, we may be unable to maintain current amounts of insurance coverage~~unavailable or ~~obtain additional~~limited in scope or ~~sufficient insurance~~amount, or if pricing is set at a reasonable cost. If we are sued for any injury caused by our product candidates or future products, our liability could exceed our insurance coverage and our total assets, and we would need to divert management attention to our defense. Claims against us, regardless of their merit or potential outcome, may also generate negative publicity or hurtunsatisfactory levels, our ability to ~~recruit investigators~~generate revenues and ~~patients~~become profitable could be impaired. In the European Union, similar political, economic and regulatory developments may affect our ability to profitably commercialize our ~~clinical trials, obtain physician acceptance~~products. In addition to continuing pressure on prices and cost containment measures, legislative developments at the European Union or member state level may result in significant additional requirements or obstacles that may increase our operating costs.

Moreover, legislative and regulatory proposals have also been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical drugs. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our drug candidates, if any, may be. In addition, increased scrutiny by the United States Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us and any future collaborators to more stringent drug labeling and post-marketing testing and other requirements.

Governments outside the United States tend to impose strict price controls, which may adversely affect our revenues, if any.

In some countries, such as the countries of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control and access. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we, or any current or future collaborators, may be required to conduct a clinical trial that compares the cost-effectiveness of our product to other available therapies. If reimbursement of our products is unavailable or ~~expand~~limited in scope or amount, or if pricing is set at unsatisfactory levels, our ~~business.~~

~~We work with hazardous materials that may expose us to liability.~~

~~Our activities involve the controlled storage, use and disposal of hazardous materials, including infectious agents; corrosive, explosive and flammable chemicals; and various radioactive compounds.~~ business could be materially harmed.

We are subject to ~~certain federal,~~U.S. and foreign anti-corruption and anti-money laundering laws with respect to our operations and non-compliance with such laws can subject us to criminal and/or civil liability and harm our business.

We are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, and possibly other state and ~~local~~national anti-bribery and anti-money laundering laws in countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit companies and their employees, agents, third-party intermediaries, joint venture partners and collaborators from authorizing, promising, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector. We may have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities, and other organizations. In addition, we may engage third party intermediaries to promote our clinical research activities abroad and/or to obtain necessary permits, licenses, and other regulatory approvals. We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize or have actual knowledge of such activities.

We cannot assure you that our employees and third-party intermediaries will comply with such anti-corruption laws. Noncompliance with anti-corruption and anti-money laundering laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension and/or debarment from contracting with certain persons, the loss of export privileges, reputational harm, adverse media coverage, and other collateral consequences. If any subpoenas, investigations, or other enforcement actions are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, results of operations, and financial condition could be materially harmed. In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense and compliance costs and other professional fees. In certain cases, enforcement authorities may even cause us to appoint an independent compliance monitor which can result in added costs and administrative burdens.

We are subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws.

Our products and solutions are subject to export control and import laws and regulations, ~~governing~~including the ~~use, manufacture, storage, handling~~U.S. Export Administration Regulations, U.S. Customs regulations, and ~~disposal~~various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls. Exports of our products and solutions outside of the United States must be made in compliance with these ~~hazardous materials. We incur significant costs~~laws and regulations. If we fail to comply with these laws and ~~regulations.~~ regulations, we and certain of our employees could be subject to substantial civil or criminal penalties, including the possible loss of export or import privileges; fines, which may be imposed on us and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managers.

In addition, changes in our products or solutions or changes in applicable export or import laws and regulations may create delays in the introduction, provision, or sale of our products and solutions in international markets, prevent customers from using our products and solutions or, in some cases, prevent the export or import of our products and solutions to certain countries, governments or persons altogether. Any limitation on our ability to export, provide, or sell our products and solutions could adversely affect our business, financial condition and results of operations.

If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.

We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. From time to time and in the future, our operations may involve the use of hazardous and flammable materials, including chemicals and biological materials, and may also produce hazardous waste products. Even if we contract with third parties for the disposal of these materials and waste products, we cannot completely eliminate the risk of ~~accidental~~ contamination or injury resulting from these materials. In the event of ~~an accident, regulatory authorities may curtail~~contamination or injury resulting from the use or disposal of our ~~use of these~~hazardous materials, ~~and~~ we could be held liable for any ~~civil~~resulting damages, ~~that result. These damages may~~and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.

We maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, as well as other work-related injuries, but this insurance may not provide adequate coverage against potential liabilities. However, we do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us.

In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Current or future environmental laws and regulations may impair our research, development or production efforts. In addition, failure to comply with these laws and regulations may result in substantial fines, penalties or other sanctions.

Unfavorable global economic conditions could adversely affect our business, financial ~~resources~~condition or ~~insurance coverage~~results of operations.

Our results of operations could be adversely affected by general conditions in the global economy and ~~may seriously~~in the global financial markets. The 2008 global financial crisis caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn, such as that in 2008, could result in a variety of risks to our business, including weakened demand for our product candidates and our ability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy could strain our suppliers, possibly resulting in supply disruption, or cause delays in payments for our services by third-party payors or our collaborators. Any of the foregoing could harm our ~~business. Additionally, an accident~~business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could ~~damage,~~adversely impact our business.

We rely significantly upon information technology and any failure, inadequacy, interruption or ~~force us to shut down, our operations.~~

~~Security breaches may disrupt our operations and~~security lapse of that technology, including any cyber-security incidents, could harm our ~~operating results.~~

~~Our network~~ability to operate our business effectively.

Despite the implementation of security measures and certain data recovery measures, ~~may not be adequate~~our internal computer systems and those of third parties with which we contract are vulnerable to ~~protect against~~damage from cyber attacks, computer viruses, ~~break-ins~~unauthorized access, sabotage, natural disasters, terrorism, war, telecommunication and ~~similar disruptions from unauthorized tampering~~electrical failures and other disruptions. System failures, accidents or security breaches could cause interruptions in operations for us or those third parties with which we contract, and could result in a material disruption of our ~~computer systems.~~clinical and commercialization activities and business operations, in addition to possibly requiring substantial expenditures of resources to remedy. The ~~misappropriation, theft, sabotage~~loss of clinical trial data could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any ~~other type of~~disruption or security breach ~~with respect~~were to ~~any~~result in a loss of, or damage to, our data or applications, or inappropriate public disclosure of confidential or proprietary information, we could incur liability and ~~confidential information that is electronically stored, including research or clinical data,~~our product development and commercialization efforts could be delayed. Such delay could have a material adverse impact on our business, operating results and financial condition. ~~Additionally, any break-in~~

Our employees may engage in misconduct or ~~trespass~~other improper activities, including non-compliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation.

We are exposed to the risk of ~~our facilities that results~~employee fraud or other misconduct, including intentional failures to comply with FDA regulations or similar regulations of comparable foreign regulatory authorities, provide accurate information to the FDA or comparable foreign regulatory authorities, comply with manufacturing standards we have established, comply with federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced by comparable foreign regulatory authorities, report financial information or data accurately or disclose unauthorized activities to us. Employee misconduct could also involve the improper use of information obtained in the ~~misappropriation, theft, sabotage or any other type~~course of ~~security breach with respect~~clinical trials, which could result in regulatory sanctions and serious harm to our ~~proprietary~~reputation. It is not always possible to identify and ~~confidential information, including research~~deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or ~~clinical data,~~unmanaged risks or ~~that results~~losses or in ~~damage~~protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws, standards or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our ~~research and development equipment and assets,~~rights, those actions could have a ~~material adverse~~significant impact on our business ~~operating~~and results ~~and financial condition.~~

of operations, including the imposition of significant fines or other sanctions.

Risks Related to ~~Intellectual Property~~

Employee Matters and Managing Potential Future Growth

If we are not able to retain key personnel and advisors, we may not be able to operate our business successfully.

Retaining qualified scientific and business personnel is also critical to our success. Our ~~success depends substantially upon~~industry has experienced a high rate of turnover of management personnel in recent years. If we lose one or more of our executive officers or other key employees, our ability to ~~obtain and maintain intellectual property protection for~~implement our ~~product candidates.~~

~~We own or hold exclusive licenses to a number of U.S. and foreign patents and patent applications directed to~~business strategy successfully could be seriously harmed. This competition is particularly intense near our ~~product candidates. Our success depends on our ability to obtain patent protection both~~headquarters in the United States and in other countries for our product candidates, their methods of manufacture and their methods of use. Our ability to protect our product candidates from unauthorized or infringing use by third parties depends substantially on our ability to obtain and enforce our patents.

Due to evolving legal standards relating to the patentability, validity and enforceability of patents covering pharmaceutical inventions and molecular diagnostics and the claim scope of these patents, our ability to obtain and enforce patents that may issue from any pending or future patent applications is uncertain and involves complex legal, scientific and factual questions. The standards that the United States Patent and Trademark Office, or PTO, and its foreign counterparts use to grant patents are not always applied predictably or uniformly and are subject to change. To date, no consistent policy has emerged regarding the breadth of claims allowed in pharmaceutical or molecular diagnostics patents. Thus, we cannot guarantee that any patents will issue from any pending or future patent applications owned by or licensed to us. Even if patents do issue, we cannot guarantee that the claims of these patents will be held valid or enforceable by a court of law, will provide us with any significant protection against competitive products or will afford us a commercial advantage over competitive products.

The U.S. Congress passed the Leahy-Smith America Invents Act, or the America Invents Act, which became effective in March 2013. The America Invents Act reforms United States patent law in part by changing the standard for patent approval for certain patents from a “first to invent” standard to a “first to file” standard and developing a post-grant review system. This new law changes United States patent law in a way that may severely weaken our ability to obtain patent protection in the United States. Additionally, recent judicial decisions establishing new case law and a reinterpretation of past case law, as well as regulatory initiatives, may make it more difficult for us to protect our intellectual property.

If we do not obtain adequate intellectual property protection for our products in the United States, competitors could duplicate them without repeating the extensive testing that we will have been required to undertake to obtain approval by the FDA. Regardless of any patent protection, under the current statutory framework, the FDA is prohibited by law from approving any generic version of any of our products for up to five years after it has approved our product. Upon the expiration of that period, or if that time period is altered, the FDA could approve a generic version of our product unless we have patent protection sufficient for us to block that generic version. Without sufficient patent protection, the applicant for a generic version of our product would only be required to conduct a relatively inexpensive study to show that its product is bioequivalent to our product and would not have to repeat the studies that we conducted to demonstrate that the product is safe and effective.

In the absence of adequate patent protection in other countries, competitors may similarly be able to obtain regulatory approval in those countries for products that duplicate our products. The laws of some foreign jurisdictions do not protect intellectual property rights to the same extent as in the United States. Many companies have encountered significant difficulties in protecting and defending such rights in foreign jurisdictions. Some of our development efforts may be performed in China, India and other countries outside of the United States through third-party contractors.Cambridge, Massachusetts. We may not be able to ~~monitor~~attract or retain these personnel

on acceptable terms given the competition among numerous pharmaceutical and ~~assess intellectual property developed by these contractors effectively; therefore,~~biotechnology companies for similar personnel. In addition, as a result of our restructurings throughout 2016, we may ~~not be able to appropriately protect this intellectual property~~face additional challenges in retaining our existing senior management and ~~could lose valuable intellectual property rights. In addition, the legal protection afforded to inventors and owners of intellectual property in countries outside of the United States may not be~~key employees for our company as ~~protective of intellectual property rights as~~our business needs change.

We also experience competition in the ~~United States,~~hiring of scientific personnel from universities and ~~we may, therefore, be unable to acquire and protect intellectual property developed by these contractors to the same extent as if these development activities were~~

~~being conducted in the United States. If we encounter difficulties in protecting our intellectual property rights in foreign jurisdictions, our business prospects could be substantially harmed.~~

research institutions. In addition, we rely on ~~intellectual property assignment agreements~~consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development strategy. Our consultants and advisors may be employed by other entities, have commitments under consulting or advisory contracts with ~~our~~third parties that limit their availability to us, or both.

We may undertake strategic alliance partners, vendors, employees, consultants, clinical investigators, scientific advisors and other collaborators to grant us ownership of new intellectual property that is developed by them. These agreements may not resultacquisitions in the ~~effective assignment to us of that intellectual property. As a result, our ownership of key intellectual property could be compromised.~~

~~Patent interference, opposition or similar proceedings relating to our intellectual property portfolio are costly,~~future, and ~~an unfavorable outcome could prevent us~~any difficulties from ~~commercializing our product candidates.~~

Patent applications in the United States are maintained in confidence for up to 18 months after their filing. In some cases, however, patent applications remain confidential in the PTO for the entire time prior to issuance as a U.S. patent. Similarly, publication of discoveries in the scientific or patent literature often lags behind actual discoveries. Consequently, we cannot be certain that we were the first to invent, or the first to file patent applications on, ourintegrating acquired businesses, products, product candidates or their therapeutic use. In the event that a third party has also filed a U.S. patent application relating to our product candidates or a similar invention, we may have to participate in interference or derivation proceedings declared by the PTO or the third party to determine priority of invention in the United States. An adverse decision in an interference or derivation proceeding may result in the loss of rights under a patent or patent application. In addition, the cost of interference proceedingsand technologies could ~~be substantial.~~

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

The PTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process. There are situations in which non-compliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If we fail to comply with these requirements, competitors might be able to enter the market earlier than would otherwise have been the case, which could decrease our revenue from that product.

~~Claims by third parties of intellectual property infringement are costly and distracting, and could deprive us of valuable rights we need to develop or commercialize our product candidates.~~

Our commercial success will depend on whether there are third-party patents or other intellectual property relevant to our potential products that may block or hinder our ability to develop and commercialize our product candidates. We may not have identified all U.S. and foreign patents or published applications that may adversely affect our business ~~either by blocking~~and our ~~ability to manufacture or commercialize our drugs or by covering similar technologies that adversely affect the applicable market. In addition, we~~stock price.

We may undertake research and development with respect to product candidates, even when we are aware of third-party patents that may be relevant to such product candidates, on the basis that we may challenge or license such patents. There are no assurances that such licenses will be available on commercially reasonable terms, or at all. If such licenses are not available, we may become subject to patent litigation and, while we cannot predict the outcome of any litigation, it may be expensive and time consuming. If we are unsuccessful in litigation concerning patents owned by third parties, we may be precluded from selling our products.

While we are not currently aware of any litigation or third-party claims of intellectual property infringement related to our product candidates, the biopharmaceutical industry is characterized by extensive litigation regarding patents and other intellectual property rights. Other parties may obtain patents and claim that the use of our technologies infringes these patents or that we are employing their proprietary technology without

~~authorization. We could incur substantial costs and diversion of management and technical personnel in defending against any claims that the manufacture and sale of our potential~~acquire additional businesses, products, or use of our technologies infringes any patents, or defending against any claim that we are employing any proprietary technology without authorization. The outcome of patent litigation is subject to uncertainties that cannot be adequately quantified in advance, including the demeanor and credibility of witnesses and the identity of the adverse party, especially in pharmaceutical patent cases that may turn on the testimony of experts as to technical facts upon which experts may reasonably disagree. In the event of a successful claim of infringement against us, we may be required to:

~~pay substantial damages;~~

~~stop developing, manufacturing and/or commercializing the infringing~~ product candidates, or ~~approved products;~~

~~develop non-infringing product candidates,~~ technologies ~~and methods; and~~

~~obtain one~~that complement or ~~more licenses from other parties, which could result in~~augment our ~~paying substantial royalties or the granting of cross-licenses to our technologies.~~

If any of the foregoing were to occur, we may be unable to commercialize the affected products, or we may elect to cease certain of our business operations, either of which could severely harm our business.

We may undertake infringement or other legal proceedings against third parties, causing us to spend substantial resources on litigation and exposing our own intellectual property portfolio to challenge.

Competitors may infringe our patents. To prevent infringement or unauthorized use, we may need to file infringement suits, which are expensive and time-consuming. In an infringement proceeding, a court may decide that one or more of our patents is invalid, unenforceable, or both. Even if the validity of our patents is upheld, a court may refuse to stop the other party from using the technology at issue on the ground that the other party’s activities are not covered by our patents. In this case, third parties may be able to use our patented technology without paying licensing fees or royalties. Policing unauthorized use of our intellectual property is difficult, and we may not be able to prevent misappropriation of our proprietary rights, particularly in countries where the laws may not protect such rights as fully as in the United States. In addition, third parties may affirmatively challenge our rights to, or the scope or validity of, our patent rights.

~~Confidentiality agreements may not adequately prevent disclosure of trade secrets and other proprietary information.~~

To protect our proprietary technology, we rely in part on confidentiality agreements with our vendors, strategic alliance partners, employees, consultants, scientific advisors, clinical investigators and other collaborators. We generally require each of these individuals and entities to execute a confidentiality agreement at the commencement of a relationship with us. These agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure or misuse of confidential information or other breaches of the agreements.

In addition, we may rely on trade secrets to protect our technology, especially where we do not believe patent protection is appropriate or obtainable. Trade secrets are, however, difficult to protect. Others may independently discover our trade secrets and proprietary information, and in such case we could not assert any trade secret rights against such party. Enforcing a claim that a party illegally obtained and is using our trade secrets is difficult, expensive and time consuming, and the outcome is unpredictable. In addition, courts outside of the United States may be less willing to protect trade secrets. Costly and time-consuming litigation could be necessary to seek to enforce and determine the scope of our proprietary rights and could result in a diversion of management’s attention, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

~~If we fail to obtain necessary or useful licenses to intellectual property, we could encounter substantial delays in the research, development and commercialization of our product candidates.~~

~~We may decide to license third-party technology that we deem necessary or useful for our~~existing business. We may not be able to ~~obtain these licenses at~~integrate any acquired businesses, products, product candidates or technologies successfully or operate any acquired business profitably. Integrating any newly acquired business, product, product candidate, or technology could be expensive and time-consuming. Integration efforts often place a ~~reasonable cost,~~significant strain on managerial, operational and financial resources and could prove to be more difficult or ~~at all.~~expensive than we expect. The diversion of the attention of our management to, and any delay or difficulties encountered in connection with, any future acquisitions we may consummate could result in the disruption of our ongoing business or inconsistencies in standards, controls, procedures and policies that could adversely affect our ability to maintain relationships with customers, suppliers, collaborators, employees and others with whom we have business dealings. We may need to raise additional funds through public or private debt or equity financings to acquire any businesses, products, product candidates, or technologies which may result in, among other things, dilution for stockholders or the incurrence of indebtedness.

As part of our efforts to acquire businesses, products, product candidates and technologies or to enter into other significant transactions, we conduct business, legal and financial due diligence in an effort to identify and evaluate material risks involved in the transaction. We will also need to make certain assumptions regarding acquired product candidates, including, among other things, development costs, the likelihood of receiving regulatory approval and the market for such product candidates. If we doare unsuccessful in identifying or evaluating all such risks or our assumptions prove to be incorrect, we might not obtain necessary licenses, we could encounter substantial delays in developing and commercializing our product candidates while we attempt to develop alternative technologies, methods and product candidates, which we may not be able to accomplish. Furthermore, ifrealize some or all of the intended benefits of the transaction. If we fail to ~~comply~~realize intended benefits from acquisitions we may consummate in the future, our business and financial results could be adversely affected.

In addition, we will likely incur significant expenses in connection with our ~~obligations under~~efforts, if any, to consummate acquisitions. These expenses may include fees and expenses for investment bankers, attorneys, accountants and other advisers in connection with our ~~third-party license agreements, we~~efforts and could ~~lose license rights that are important to our business. For example,~~be incurred whether or not an acquisition is consummated. Even if we ~~fail~~consummate a particular acquisition, we may incur as part of such acquisition substantial closure costs associated with, among other things, elimination of duplicate operations and facilities. In such case, the incurrence of these costs could adversely affect our financial results for particular quarterly or annual periods.

Risks Related to use diligent efforts to develop and commercialize products licensed under our amended and restated development and license agreement with Takeda, we could lose our license rights under that agreement, including rights to duvelisib.

~~Risks Associated with~~ Our Common Stock

Our common stock may have a volatile trading price and low trading volume.

The market price of our common stock has been and ~~could~~we expect it to continue to be subject to significant fluctuations. Some of the factors that may cause the market price of our common stock to fluctuate include:

the results of our current and any future clinical trials of ~~our product candidates;~~

IPI-549;

~~the results of preclinical studies and planned clinical trials of our discovery-stage programs;~~

~~product portfolio decisions resulting in the delay or termination of our product development programs;~~

future sales of, and the trading volume in, our common stock;

announcements of strategic transactions relating to our programs or our company;

our entry into key agreements, including those related to the acquisition or in-licensing of new programs, or the termination of key agreements, including ~~our collaboration and license agreement with AbbVie~~the Takeda Agreement or ~~our amended and restated development and license agreement with Takeda;~~

the Verastem Agreement;

the results and timing of regulatory reviews relating to the approval of ~~our product candidates;~~

IPI-549;

the initiation of, material developments in, or conclusion of litigation, including but not limited to litigation to enforce or defend any of our intellectual property rights or to defend product liability claims;

the failure of ~~any of our product candidates,~~IPI-549, if approved, to achieve commercial success;

the results of clinical trials conducted by others on drugs that would compete with ~~our product candidates;~~

IPI-549;

the regulatory approval of drugs that would compete with ~~our product candidates;~~

IPI-549;

issues in manufacturing ~~our product candidates or any approved products;~~

IPI-549;

the loss of executive officers or other key employees;

changes in estimates or recommendations, or publication of inaccurate or unfavorable research about our business, by securities analysts who cover our common stock;

future financings through the issuance of equity or debt securities or otherwise;

healthcare reform measures, including changes in the structure of healthcare payment systems;

our cash position and period-to-period fluctuations in our financial results; and

general and industry-specific economic and/or capital market conditions.

Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of our common stock.

In the past, when the market price of a stock has been volatile, as our stock price may be, holders of that stock have occasionally brought securities class action litigation against the company that issued the stock. If any of our stockholders were to bring a lawsuit of this type against us, even if the lawsuit is without merit, negative publicity could be generated, and we could incur substantial costs defending the lawsuit. A stockholder lawsuit could also divert the time and attention of our management.

If we fail to meet the requirements for continued listing on the Nasdaq Global Select Market, our common stock could be delisted from trading, which would decrease the liquidity of our common stock and our ability to raise additional capital.

Our common stock is currently listed for quotation on the Nasdaq Global Select Market. We are required to meet specified requirements in order to maintain our listing on the Nasdaq Global Select Market, including, among other things, a minimum bid price of $1.00 per share. If our bid price falls below $1.00 per share for 30 consecutive business days, we will receive a deficiency notice from Nasdaq advising us that we have 180 days to regain compliance by maintaining a minimum bid price of at least $1.00 for a minimum of ten consecutive business days. Under certain circumstances, Nasdaq could require that the minimum bid price exceed $1.00 for more than ten consecutive days before determining that a company complies.

If we fail to satisfy the Nasdaq Global Select Market’s continued listing requirements, we may transfer to the Nasdaq Capital Market, which generally has lower financial requirements for initial listing, to avoid delisting, or, if we fail to meet its listing requirements, the OTC Bulletin Board. A transfer of our listing to the Nasdaq Capital Market or having our common stock trade on the OTC Bulletin Board could adversely affect the liquidity of our common stock. Any such event could make it more difficult to dispose of, or obtain accurate quotations for the price of, our common stock, and there also would likely be a reduction in our coverage by securities analysts and the news media, which could cause the price of our common stock to decline further. We may also face other material adverse consequences in such event, such as negative publicity, a decreased ability to obtain additional financing, diminished investor and/or employee confidence, and the loss of business development opportunities, some or all of which may contribute to a further decline in our stock price.

The estimates and judgments we make, or the assumptions on which we rely, in preparing our consolidated financial statements could prove inaccurate.

If we are not able to maintain effective internal control under Section 404 of the Sarbanes-Oxley Act, our business and stock price could be adversely affected.

Section 404 of the Sarbanes-Oxley Act of 2002 requires us, on an annual basis, to review and evaluate our internal control and requires our independent auditors to attest to the effectiveness of our internal control over financial reporting. Any failure by us to maintain the effectiveness of our internal control in accordance with the requirements of Section 404 of the Sarbanes-Oxley Act, which could be impacted by our restructuring or employee turnover, as such requirements exist today or may be modified, supplemented or amended in the future, could have a material adverse effect on our business, operating results and stock price.

We might not be able to utilize a significant portion of our net operating loss carryforwards and research and development tax credit carryforwards.

We have incurred significant net losses since our inception and cannot guarantee when, if ever, we will become profitable. To the extent that we continue to generate federal and state taxable losses, unused net operating loss and tax credit carryforwards will carry forward to offset future taxable income, subject to applicable limitations on the use of those losses. Losses incurred in taxable years ending on or before December 31, 2017, are eligible to be carried forward for up to 20 years, and to be deducted in full against income for the years to which they may be carried. Losses incurred in taxable years ending after December 31, 2017, are eligible to be carried forward indefinitely, but may offset no more than 80% of the taxable income for the years to which they are carried (computed without regard to the deduction for carryovers of net operating losses). Net operating loss carryovers from periods ending on or before December 31, 2017, and tax credit carryovers from all periods could expire unused and be unavailable to offset future income tax liabilities.

In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss and credit carryovers to reduce its tax liability for post-change periods may be limited. We may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control. In addition, we have not conducted a detailed study to document whether our historical activities qualify to support the research and development credits currently claimed as a carryover. A detailed study could result in adjustment to our research and development credit carryovers. If we determine that an ownership change has occurred and our ability to use our historical net operating loss and tax credit carryovers is materially limited, or if our research and development carryforwards are adjusted, our use of those attributes to offset future income tax liabilities would be limited.

The recently passed comprehensive tax reform bill could adversely affect our business and financial condition.

On December 22, 2017, President Trump signed into law new legislation that significantly revised the Internal Revenue Code of 1986, as amended. The newly enacted federal income tax law, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of adjusted earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, one time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, elimination of U.S. tax on foreign earnings (subject to certain important exceptions), immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits. Notwithstanding the reduction in the corporate income tax rate, the overall impact of the new federal tax law is uncertain and our business and financial condition could be adversely affected. In addition, it is uncertain how various states will respond to the newly enacted federal tax law. The impact of this tax reform on holders of our common stock is also uncertain and could be adverse. We urge our stockholders to consult with their legal and tax advisors with respect to this legislation and the potential tax consequences of investing in or holding our common stock.

Our effective tax rate may fluctuate, and we may incur obligations in tax jurisdictions in excess of accrued amounts.

Our effective tax rate may be different than experienced in the past due to numerous factors, including passage of the newly enacted federal income tax law, changes in the mix of our profitability apportioned to tax jurisdictions in which we may operate, the results of examinations and audits of our tax filings, our inability to secure or sustain acceptable agreements with tax authorities, changes in accounting for income taxes and changes in tax laws. Any of these factors could cause us to experience an effective tax rate significantly different from previous periods or our current expectations and may result in tax obligations in excess of amounts accrued in our financial statements.

We do not anticipate paying cash dividends, so you must rely on stock price appreciation for any return on your investment.

We anticipate retaining any future earnings for reinvestment in the infrastructure and personnel necessary to support our ~~research~~development and ~~development programs.~~potential commercialization efforts. Therefore, we do not anticipate paying cash dividends in the future. As a result, only appreciation of the price of our common stock will provide a return to stockholders. Investors seeking cash dividends should not invest in our common stock.

~~Anti-takeover provisions in our organizational documents and Delaware law may make an acquisition of us difficult.~~

We are incorporated in Delaware. Anti-takeover provisions of Delaware law and our organizational documents may make a change in control more difficult. Also, under Delaware law, our board of directors may adopt additional anti-takeover measures. For example, our charter authorizes our board of directors to issue up to 1,000,000 shares of undesignated preferred stock and to determine the terms of those shares of stock without any further action by our stockholders. If our board of directors exercises this power, it could be more difficult for a third party to acquire a majority of our outstanding voting stock. Our charter and bylaws also contain provisions limiting the ability of stockholders to call special meetings of stockholders.

Our stock incentive plan generally permits our board of directors to provide for acceleration of vesting of options granted under that plan in the event of certain transactions that result in a change of control. If our board of directors uses its authority to accelerate vesting of options, this action could make an acquisition more costly, and it could prevent an acquisition from going forward.

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law statute, which generally prohibits a person who owns in excess of 15% of our outstanding voting stock from engaging in a transaction with us for a period of three years after the date on which such person acquired in excess of 15% of our outstanding voting common stock, unless the transaction is approved by our board of directors and holders of at least two-thirds of our outstanding voting stock, excluding shares held by such person. The prohibition against such transactions does not apply if, among other things, prior to the time that such person became an interested stockholder, our board of directors approved the transaction in which such person acquired 15% or more of our outstanding voting stock. The existence of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our common stock.

Our executive officers, directors and major shareholders may be able to exert significant control over the company, which may make an acquisition of us difficult.

To our knowledge, based on the number of shares of our common stock outstanding on ~~December 31, 2014,~~March 1, 2018, stockholders ~~holding~~beneficially owning 5% or more of our common stock, as well as our executive officers, directors, and their respective affiliates, beneficially owned in the aggregate approximately ~~55%~~29% of our common stock. These stockholders have the ability to influence our company through this ownership position. For example, as a result of this concentration of ownership, these stockholders, if acting together, may have the ability to affect the outcome of matters submitted to our stockholders for approval, including the election and removal of directors, changes to our equity compensation plans and any merger or similar transaction. This concentration of ownership may, therefore, harm the market price of our common stock by:

delaying, deferring or preventing a change in control of Infinity;

impeding a merger, consolidation, takeover or other business combination involving Infinity; or

discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of Infinity.

Anti-takeover provisions in our organizational documents and Delaware law may make an acquisition of us difficult.

We are incorporated in Delaware. Anti-takeover provisions of Delaware law and our organizational documents may make a change in control more difficult. Also, under Delaware law, our Board of Directors may adopt additional anti-takeover measures. For example, our charter authorizes our Board of Directors to issue up to 1,000,000 shares of undesignated preferred stock and to determine the terms of those shares of stock without any further action by our stockholders. If our Board of Directors exercises this power, it could be more difficult for a third party to acquire a majority of our outstanding voting stock. Our charter and bylaws also contain provisions limiting the ability of stockholders to call special meetings of stockholders.

Our stock incentive plan generally permits our Board of Directors to provide for acceleration of vesting of options granted under that plan in the event of certain transactions that result in a change of control. If our Board of Directors uses its authority to accelerate vesting of options, this action could make an acquisition more costly, and it could prevent an acquisition from going forward.

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law statute, which generally prohibits a person who owns in excess of 15% of our outstanding voting stock from engaging in a transaction with us for a period of three years after the date on which such person acquired in excess of 15% of our outstanding voting common stock, unless the transaction is approved by our Board of Directors and holders of at least two-thirds of our outstanding voting stock, excluding shares held by such person. The prohibition against such transactions does not apply if, among other things, prior to the time that such person became an interested stockholder, our Board of Directors approved the transaction in which such person acquired 15% or more of our outstanding voting stock. The existence of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our common stock.

Our investments are subject to risks that may cause losses and affect the liquidity of these investments.

As of December 31, 2017, we had $57.6 million in cash and cash equivalents. We historically have invested these amounts in money market funds, corporate obligations, U.S. government-sponsored enterprise obligations, U.S. Treasury securities and mortgage-backed securities meeting the criteria of our investment policy, which prioritizes the preservation of our capital. Corporate obligations may include obligations issued by corporations in countries other than the United States, including some issues that have not been guaranteed by governments and government agencies. Our investments are subject to general credit, liquidity, market and interest rate risks and instability in the global financial markets. We may realize losses in the fair value of these investments or a complete loss of these investments. In addition, should our investments cease paying or reduce the amount of interest paid to us, our interest income would suffer. These market risks associated with our investment portfolio may have a material adverse effect on our financial results and the availability of cash to fund our operations.

~~Item 1B.~~

~~Unresolved Staff Comments~~

Item 1B. Unresolved Staff Comments

None.

~~Item 2.~~

~~Properties~~

We currently lease, under two lease agreements, an aggregate of approximately 116,000 square feet of laboratory and office space among three buildings located at 780, 784 and 790 Memorial Drive in Cambridge, Massachusetts.

Item 2. Properties

On September ~~25, 2014,~~1, 2017, we entered into a ~~new~~ lease covering ~~61,000~~6,091 square feet of office space located at 784 Memorial Drive. Due to our involvement in the renovation of the building, we are deemed for accounting purposes the owner of the building during the construction period (see note 11 of the consolidated financial statements). On November 6, 2014, we entered into a lease extension covering 54,861 square feet of laboratory and office space at 780 and 790 Memorial Drive. EachThe lease expires on ~~March~~August 31, ~~2025, and each contains two separate five-year options to extend its term to 2035.~~

2019.

~~Item 3.~~

~~Legal Proceedings~~

Item 3. Legal Proceedings

We are not a party to any material legal proceedings.

~~Item 4.~~

~~Mine Safety Disclosures~~

Item 4. Mine Safety Disclosures

Not applicable.

PART II

~~Item 5.~~

~~Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities~~

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our common stock is traded on the ~~NASDAQ~~Nasdaq Global Select Market under the symbol “INFI.” ~~Prior to January 3, 2011, our common stock was traded on the NASDAQ Global Market.~~ The following table sets forth the range of high and low sales prices for our common stock for the quarterly periods indicated, as reported by ~~NASDAQ.~~Nasdaq. Such quotations represent inter-dealer prices without retail mark up, mark down or commission and may not necessarily represent actual transactions.

   2014    2013
   High    Low    High    Low
First quarter
   $ 16.70       $ 11.30       $ 50.51       $ 32.13
Second quarter
   13.25       8.40       50.40       16.07
Third quarter
   16.93       8.80       23.68       15.45
Fourth quarter
   18.25       11.90       18.35       11.57



	2017				2016
	High		Low		High		Low
First quarter	$	3.84	$	1.32	$	8.16	$	4.75
Second quarter	3.60		1.56		6.63		1.24
Third quarter	1.66		0.93		1.80		1.24
Fourth quarter	3.75		1.20		1.65		0.84

Holders

As of ~~February~~March 1, ~~2015,~~2018, there were 5249 holders of record of our common stock.

Dividends

We have never paid cash dividends on our common stock, and we do not expect to pay any cash dividends in the foreseeable future.

Comparative Stock Performance Graph

The information included under the heading “Comparative Stock Performance Graph” included in this Item 5 of Part II of this Annual Report on Form 10-K shall not be deemed to be “soliciting material” or subject to Regulation 14A or 14C, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

The graph below shows a comparison of cumulative total stockholder returns from December 31, ~~2009~~2012 through December 31, ~~2014~~2017 for our common stock, the ~~NASDAQ~~Nasdaq Stock Market (U.S.) Index and the ~~NASDAQ~~Nasdaq Biotechnology Index. The graph assumes that $100 was invested in our common stock and in each index on December 31, ~~2009,~~2012, and that all dividends were reinvested. No cash dividends have been declared or paid on our common stock.

The stockholder returns shown on the graph below are not necessarily indicative of future performance, and we will not make or endorse any predictions as to future stockholder returns.

~~Comparison of 5-Year Cumulative Total Return~~

~~among Infinity Pharmaceuticals, Inc.,~~

~~the NASDAQ Biotechnology Index,~~

~~and NASDAQ Stock Market (U.S.) Index~~

Item 6. Selected Financial Data

~~Item 6.~~

~~Selected Financial Data~~

The following financial data should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this report. Amounts below are in thousands, except for shares and per share amounts.

   Year Ended December 31,
   2014 2013 2012 2011 2010
Statement of Operations Data:

Collaboration revenue
   $ 164,995    $ —      $ 47,114    $ 92,773    $ 71,331
Operating expenses:

Research and development
   143,633    99,760    118,595    108,582    99,232
General and administrative
   29,285    27,916    27,882    22,719    21,070
Total operating expenses
   172,918    127,676    146,477    131,301    120,302
Gain on termination of Purdue entities alliance
   —      —      46,555    —      —
Loss from operations
   (7,923 ) (127,676 ) (52,808 ) (38,528 ) (48,971 )
Interest income (expense), net
   (9,310 ) 896    (1,349 ) (1,514 ) (1,447 )
Income from Therapeutic Discovery Grants
   —      —      —      —      734
Income from Massachusetts tax incentive award
   —      —      193    —      —
Loss before income taxes
   (17,233 ) (126,780 ) (53,964 ) (40,042 ) (49,684 )
Income tax
   (183 ) —      —      —      700
Net loss
   $ (17,416 ) $ (126,780 ) $ (53,964 ) $ (40,042 ) $ (48,984 )
Basic and diluted loss per common share
   $ (0.36 ) $ (2.64 ) $ (1.70 ) $ (1.50 ) $ (1.86 )
Basic and diluted weighted average number of common shares outstanding
   48,561,653    47,936,001    31,711,264    26,620,278    26,321,398

   As of December 31,
   2014 2013 2012 2011 2010
Selected Balance Sheet Data:

Cash, cash equivalents and available-for-sale securities, including long-term
   $ 333,245    $ 214,468    $ 326,635    $ 115,937    $ 100,959
Working capital
   289,691    202,735    311,086    88,995    75,378
Total assets
   369,144    230,710    335,660    124,490    124,566
Long-term debt due to Purdue entities, net of debt discount(1)
   —      —      —      37,553    —
Due to Takeda, less current portion(2)
   —      6,456    6,252    —      —
Construction liability(3)
   15,456    —      —      —      —
Accumulated deficit
   (467,212 ) (449,796 ) (323,016 ) (269,052 ) (229,010 )
Total stockholders’ equity
   209,472    201,275    310,205    15,433    49,484

~~(1)~~

In November 2011, we borrowed $50 million under a line of credit agreement with Purdue and its independent associated entity, Purdue Pharma L.P., or PPLP. We reduced the long-term debt on our balance sheet with a debt discount. On September 7, 2012, upon completion of the sale and issuance of common stock to PPLP under the 2012 securities purchase agreement, the line of credit agreement with PPLP terminated in its entirety. See note 12 of the consolidated financial statements.

~~(2)~~

During the year ended December 31, 2012, we recorded $14.4 million in research and development expense related to the fair value of a release payment of $15 million, payable in installments, pursuant to the amended and restated agreement with Takeda Pharmaceuticals Company Limited, or Takeda. We paid $1.7

million and $6.7 million of this $15 million release payment during the years ended December 31, 2012 and December 31, 2014, respectively, and recorded the remaining balance as a liability. As of December 31, 2014, we have a balance of $6.7 million in Due to Takeda, current.
~~(3)~~ In September 2014, we entered into a lease agreement with BHX, LLC, as trustee of 784 Realty Trust, for the lease of office space at 784 Memorial Drive, Cambridge, Massachusetts. See note 11 of the consolidated financial statements. Upon lease commencement, building construction was initiated and we are involved in the construction project. We are deemed for accounting purposes to be the owner of the building during the construction period. As of December 31, 2014, we recorded building and accumulated construction costs of approximately $16.0 million and a construction liability of approximately $15.5 million. See note 11 of the consolidated financial statements.

We expect to ~~as the AbbVie Agreement. Under the AbbVie Agreement, we will collaborate with AbbVie~~continue to ~~develop and commercialize products containing duvelisib, which we refer~~spend significant resources to as Duvelisib Products, in oncology indications. Under the terms of the AbbVie Agreement, we have granted to AbbVie licenses under applicable patents, patent applications, know-how and trademarks to develop, commercialize and manufacture Duvelisib Products in oncology indications. These licenses are generally co-exclusive with rights we retain, except that we have granted AbbVie exclusive licenses to commercialize Duvelisib Products outside the United States. We and AbbVie retain the rights to perform our respective obligations and exercise our respective rights under the AbbVie Agreement, and we and AbbVie may each grant sublicenses to affiliates or third parties.

~~Under the AbbVie Agreement, we and AbbVie have created a governance structure, including committees and working groups to manage~~fund the development ~~manufacturing~~ and potential commercialization ~~responsibilities for Duvelisib Products. Generally, we~~of IPI-549, and ~~AbbVie must mutually agree on decisions, although in specified circumstances either we or AbbVie would be able to break a deadlock.~~

We and AbbVie share oversight of development and have each agreed to use diligent efforts, as defined in the AbbVie Agreement, to carry out our development activities under an agreed upon development plan. We have primary responsibility for the conduct of development of Duvelisib Products, unless otherwise agreed, and AbbVie has responsibility for the conduct of certain contemplated combination clinical studies, which we refer to as the AbbVie Studies. We have the responsibility to manufacture Duvelisib Products until we transition manufacturing responsibility to AbbVie, which we expect to ~~occur~~incur significant operating losses for the foreseeable future. We expect to incur substantial operating losses over the next several years as ~~promptly as practicable while ensuring continuity of supply. Excluding the AbbVie Studies, we are responsible for all costs to develop~~our clinical trial and ~~manufacture Duvelisib Products up to a maximum amount of $667 million after which we will share Duvelisib Product development~~drug manufacturing activities increase. In addition, in connection with seeking and ~~manufacturing costs equally with AbbVie. The development and manufacturing costs of the AbbVie Studies will be shared equally.~~

We and AbbVie share operational responsibility and decision making authority for commercialization of Duvelisib Products in the United States. Specifically, we have the primary responsibility for advertising, distribution, and booking sales, and we share certain other commercialization functions with AbbVie. Assumingpossibly obtaining regulatory approval ~~we and AbbVie are obligated to each provide half~~ of the sales representative effort to promote Duvelisib Products in the United States. Outside the United States, AbbVie has, with limited exceptions, operational responsibility and decision making authority to commercialize Duvelisib Products. We and AbbVie will share the costany of manufacturing and supply for commercialization of Duvelisib Products in the United States, and AbbVie will bear the cost of manufacturing and supply for commercialization of Duvelisib Products outside the United States.

AbbVie has paid us a non-refundable $275 million upfront payment and has agreed to pay us up to $530 million in potential future milestone payments comprised of $130 million associated with the completion of enrollment of either DYNAMO or DUO, whichour product candidates, we expect to ~~occur in 2015, up to $275 million associated with the achievement of specified regulatory filing and approval milestones, and up to $125 million associated with the achievement of specified~~incur significant commercialization milestones. Under the terms of the AbbVie Agreement, we and AbbVie will equally share commercial profits or losses of Duvelisib Products in the United States, including sharing equally the existing royalty obligations to Mundipharma International Corporation Limited, or Mundipharma, and Purdue Pharmaceutical Products L.P., or Purdue,expenses for product sales, of Duvelisib Products in the United States, as well as sharing equally the existing U.S. milestone payment obligations to Takeda Pharmaceutical Company Limited, or Takeda. Additionally, AbbVie has agreed to pay us tiered royalties on net sales of Duvelisib Products outside the United States ranging from 23.5% to 30.5%, depending on annual net sales of Duvelisib Products by AbbVie, its affiliates and its sublicensees. We are responsible for the existing royalty

obligations to Mundipharma and Purdue outside the United States and to Takeda worldwide, and AbbVie has agreed to reimburse us for our existing Duvelisib Product milestone payment obligations to Takeda outside the United States. The tiered royalty from AbbVie is subject to a reduction of 4% at each tier if our royalties to Mundipharma and Purdue are reduced according to the terms of our agreements with Mundipharma and Purdue. This tiered royalty can further be reduced based on specified factors, including patent expiry, generic entry, and royalties paid to third parties with blocking intellectual property. These royalties are payable on a product-by-product and country-by-country basis until AbbVie ceases selling the product in the country.

Subject to limited exceptions, we have agreed that we and our affiliates will not commercialize, or assist others in commercializing, in oncology indications any product that is a PI3K delta, gamma inhibitor that meets certain agreed-to criteria, other than Duvelisib Products, and AbbVie has agreed to similar restrictions. Registration-directed clinical trials and commercialization of Duvelisib Products for uses outside of oncology indications would require our and AbbVie’s mutual consent.

~~The AbbVie Agreement will remain in effect until all development,~~marketing, manufacturing and ~~commercialization of Duvelisib Products cease, unless terminated earlier. Either~~distribution. As a result, we or AbbVie may terminate the AbbVie Agreement if the other party is subject to certain insolvency proceedings or if the other party materially breaches the AbbVie Agreement and the breach remains uncured for a specified period, which may be extended in certain circumstances. However, we may terminate the AbbVie Agreement only on a country by country basis in the event AbbVie is not using diligent efforts to obtain regulatory approval or to commercialize Duvelisib Products in a country outside the United States. AbbVie mayexpect that our accumulated deficit will also terminate the AbbVie Agreement for convenience after a specified notice period. In the event there is a material uncured breach by either us or AbbVie of development or commercialization obligations, the non-breaching party may also have the right to assume and conduct such applicable development or commercialization obligations. If AbbVie or any of its affiliates or sublicensees challenges the patents we have licensed to AbbVie, we can terminate the AbbVie Agreement if the challenge is not withdrawn after a specified notice period.

If the AbbVie Agreement is terminated, we would receive all rights to the regulatory filings related to duvelisib upon our request, our license to AbbVie would terminate, and AbbVie would grant us a perpetual, irrevocable license to develop, manufacture and commercialize products containing duvelisib, excluding any compound which is covered by patent rights controlled by AbbVie or its affiliates. This license would be royalty free, unless the AbbVie Agreement is terminated for material breach, in which case, depending on the breaching party and the timing of the material breach, a royalty rate may be payable by us ranging from a low single-digit percentage to a low double-digit percentage of net sales, and, in some cases, subject to a payment cap.

~~If the AbbVie Agreement is terminated, there are certain wind-down obligations to ensure a smooth transition of the responsibilities of the parties.~~

~~Takeda~~

In July 2010, we entered into a development and license agreement with Intellikine, Inc., or Intellikine, under which we obtained rights to discover, develop and commercialize pharmaceutical products targeting the delta and/or gamma isoforms of PI3K, including duvelisib, and we paid Intellikine a $13.5 million upfront license fee. In January 2012, Intellikine was acquired by Takeda, acting through its Millennium business unit. We refer to our PI3K program licensor as Takeda. In December 2012, we amended and restated our development and license agreement with Takeda.

Under the terms of the amended and restated agreement, we retained worldwide development rights and in exchange for an agreement to pay Takeda $15 million in installments, we regained commercialization rights for products arising from the agreement for all therapeutic indications and are solely responsible for research conducted under the agreement.

In addition to developing duvelisib, we are seeking to identify additional novel inhibitors of PI3K-delta and/or PI3K-gamma for future development. We are obligated to pay to Takeda up to $5 million in remaining success-based milestone payments for the development of a second product candidate and up to $450 million in

success-based milestones for the approval and commercialization of two distinct products. In February 2014, we paid Takeda a $10 million milestone payment in connection with the initiation of our Phase 3 study of duvelisib in patients with relapsed or refractory CLL. In addition, we are obligated to pay Takeda tiered royalties on worldwide net sales ranging from 7% to 11% upon successful commercialization of products described in the agreement. Such royalties are payable until the later to occur of the expiration of specified patent rights and the expiration of non-patent regulatory exclusivities in a country, subject to reduction of the royalties, and, in certain circumstances, limits on the number of products subject to a royalty obligation.

The amended and restated agreement expires on the later of the expiration of certain patents and the expiration of the royalty payment terms for the products, unless earlier terminated. Either party may terminate the agreement on 75 days’ prior written notice if the other party materially breaches the agreement and fails to cure such breach within the applicable notice period, provided that the notice period is reduced to 30 days where the alleged breach is non-payment. Takeda may also terminate the agreement if we are not diligent in developing or commercializing the licensed products and do not, within three months after notice from Takeda, demonstrate to Takeda’s reasonable satisfaction that we have not failed to be diligent. The foregoing periods are subject to extension in certain circumstances. Additionally, Takeda may terminate the agreement upon 30 days’ prior written notice if we or a related party bring an action challenging the validity of any of the licensed patents, provided that we have not withdrawn such action before the end of the 30-day notice period. We may terminate the agreement at any time upon 180 days’ prior written notice. The agreement also provides for customary reciprocal indemnification obligations of the parties.

On July 29, 2014, we entered into an amendment to our amended and restated development and license agreement with Takeda. Under the terms of the Amendment, we paid to Takeda a one-time upfront payment of $5 million in exchange for the option to terminate our royalty obligations to Takeda under the amended and restated development and license agreement solely with respect to worldwide net sales in oncology indications of products containing or comprised of duvelisib. The option may be exercised by payment to Takeda of a fee of $52.5 million on or before March 31, 2015. If the option is not exercised, our royalty obligations to Takeda will remain unchanged.

~~Mundipharma and Purdue~~

On July 17, 2012, we terminated our strategic alliance with Mundipharma and Purdue and we entered into termination and revised relationship agreements with each of those entities, which we refer to as the 2012 Termination Agreements. The strategic alliance was previously governed by strategic alliance agreements that we entered into with each of Mundipharma and Purdue in November 2008. The strategic alliance agreement with Purdue was focused on the development and commercialization in the United States of products targeting FAAH. The strategic alliance agreement with Mundipharma was focused on the development and commercialization outside the United States of all products and product candidates that inhibit or target the Hedgehog pathway, FAAH, PI3K and product candidates arising out of our early discovery projects in all disease fields.

~~Under the terms of the 2012 Termination Agreements:~~

increase significantly.

~~We have no further obligation to provide research and development services to Mundipharma and Purdue as of July 17, 2012.~~

Mundipharma and Purdue have no further obligation to provide research and development funding to us. Under the strategic alliance, Mundipharma was obligated to reimburse us for research and development expenses we incurred, up to an annual aggregate cap for each strategic alliance program other than FAAH. We did not record a liability for amounts previously funded by Purdue and Mundipharma as this relationship was not considered a financing arrangement.

We are obligated to pay Mundipharma and Purdue a 4% royalty in the aggregate, subject to reduction as described below, on worldwide net sales of products that were covered by the alliance until such time as they have recovered approximately $260 million, representing the research and development funding paid to us for research and development services performed by us through the termination of the strategic alliance. After this cost recovery, our royalty obligations to Mundipharma and Purdue will be reduced to a 1% royalty on net sales in the United States of products that were previously subject to the strategic alliance. All payments are contingent upon the successful commercialization of products that were subject to the alliance, which products require significant further development. As such, there is significant uncertainty about whether any such products will ever be approved or commercialized. If no products are commercialized, no payments will be due by us to Mundipharma and Purdue; therefore, no amounts have been accrued.

Royalties are payable under these agreements until the later to occur of the last-to-expire of specified patent rights and the expiration of non-patent regulatory exclusivities in a country, provided that if royalties are payable solely on the basis of non-patent regulatory exclusivity, each of the royalty rates is reduced by 50%. In addition, royalties payable under these agreements after Mundipharma and Purdue have recovered all research and development expenses paid to us are subject to reduction on account of third-party royalty payments or patent litigation damages or settlements which might be required to be paid by us if litigation were to arise, with any such reductions capped at 50% of the amounts otherwise payable during the applicable royalty payment period.

On February 24, 2014, we entered into a facility agreement with affiliates of Deerfield Management Company, L.P., or Deerfield, pursuant to which, Deerfield agreed to loan us up to $100 million, subject to the terms and conditions set forth in the facility agreement. On September 22, 2014, we amended the facility agreement with Deerfield such that the maximum principal amount that we may draw down is reduced to $50 million. We refer to the facility agreement with Deerfield, as amended, as the Facility Agreement. Under the terms of the Facility Agreement, we had the right to draw down on the Facility Agreement in $25 million minimum disbursements, which we refer to as the Loan Commitment, at any time during a pre-specified draw period. The draw period has expired without us having drawn down on the Facility Agreement. On February 27, 2015, or upon the earlier termination of the facility, we are required to pay a fee equal to $1.5 million representing 3% of the total amount not drawn under the facility. In connection with the execution of the Facility Agreement, we issued to Deerfield warrants to purchase an aggregate of 1,000,000 shares of common stock at an exercise price of $13.83 per share. The warrants have dividend rights to the same extent as if the warrants were exercised into shares of common stock. The warrants expire on the seventh anniversary of their issuance and contain certain limitations that prevent the holder from acquiring shares upon exercise of a warrant that would result in the number of shares beneficially owned by it exceeding 9.985% of the total number of shares of common stock then issued and outstanding.

compensation of personnel associated with research and development activities;

clinical testing costs, including payments made to contract research organizations;

costs of comparator and combination drugs used in clinical studies;

costs of purchasing laboratory supplies and materials;

costs of manufacturing product candidates for preclinical testing and clinical studies;

costs associated with the licensing of research and development programs;

preclinical testing costs, including costs of toxicology studies;

fees paid to external consultants;

fees paid to professional service providers for independent monitoring and analysis of our clinical trials;

costs for collaboration partners to perform research activities, including development milestones for which a payment is due when achieved;

depreciation of equipment; and

allocated costs of facilities.

the consideration is commensurate with either (1) our performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from our performance to achieve the milestone,

the consideration relates solely to past performance, and

the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement.

$~~159.1~~6.0 million of revenue related to ~~license revenue recognized as part~~the achievement by Verastem of the ~~$275 million upfront~~successful completion of the DUO clinical study of duvelisib and our receipt of the associated payment ~~received from~~under our ~~collaboration~~ agreement with ~~AbbVie; and~~

Verastem.

$~~5.9~~18.7 million of revenue related to development and committee services we performed under our collaboration agreement with AbbVie.

We recognized license revenue upon execution of the arrangement. Revenue related to development services and committee services are being recognized using the proportionate performance method as services are provided over the estimated service period of approximately five years. We have recorded the remaining amount of $110 million related to development and committee services as deferred revenue as of December 31, 2014.

The development, regulatory and commercialization milestones represent non-fundable amounts that would be paid by AbbVie to us if certain milestones are achieved in the future. We have elected to apply the milestones method of revenue recognition to these milestones. We have determined that all milestones, except for the first milestone, if achieved, are substantive as they relate solely to past performance, are commensurate with estimated enhancement of value associated with the achievement of each milestone as a result of our performance, which are reasonable relative to other deliverables and terms of the arrangement, and are unrelated to the delivery of any further elements under the arrangement. The first milestone, which we have determined not to be substantive based on risk and effort involved, will be recognized using the same method as the upfront payment when achieved.

~~We did not recognize revenue during the year ended December 31, 2013 as our strategic alliance with Mundipharma and Purdue terminated in 2012.~~

$4575.2 million related to ~~reimbursed research~~license revenue recognized as part of the $130 million enrollment milestone payment received from our collaboration agreement with AbbVie; and

$33.9 million of revenue related to development and committee services we performed under our ~~strategic alliance entered into with Mundipharma and Purdue in November 2008; and~~

~~$2.1 million related to the amortization of the deferred revenue associated with the grant of rights and licenses under our strategic alliance with Mundipharma and Purdue.~~

~~We expect to recognize revenue related to license and development and committee services we perform under our~~ collaboration agreement with AbbVie.

$10.0 million milestone payment for the initiation of DUO, our first phase 3 study with a PI3K inhibitor, and $5.0 million option fee payment to Takeda in connection with the 2014 Takeda Amendment; and

~~$9.2 million increase in compensation expense primarily due to an increase in contingent cash compensation and hiring of new personnel.~~

~~These increases were partially offset by a decrease of $5.8 million in clinical development expenses due to the conclusion of our development of our Hsp90 inhibitor program.~~

The decrease in research and development expense for the year ended December 31, ~~2013~~2017 compared to the year ended December 31, ~~2012~~2016 was primarily attributable to:



Delaware		33-0655706
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)



Common Stock, ~~$.001~~$0.001 par value		~~NASDAQ~~Nasdaq Global Select Market
(Title of each class)		(Name of each exchange on which listed)



Large accelerated filer x¨	Accelerated filer ¨ý	Non-accelerated filer ¨	Smaller reporting company ¨
	Emerging growth company ¨
		(Do not check if a smaller reporting company)



				Page No.
Part I


Item 1:		Business			1	3
Item 1A:		Risk Factors			24	32
Item 1B:		Unresolved Staff Comments			43	62
Item 2:		Properties			43	63
Item 3:		Legal Proceedings			43	63
Item 4:		Mine Safety Disclosures	63
			43

Part II


Item 5:		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			44	63
Item 6:		Selected Financial Data			46	65
Item 7:		Management’s Discussion and Analysis of Financial Condition and Results of Operations			48	66
Item 7A:		Quantitative and Qualitative Disclosures about Market Risk			64	75
Item 8:		Financial Statements and Supplementary Data			65	76
Item 9:		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			94	101
Item 9A:		Controls and Procedures			94	101
Item 9B:		Other Information	103
			96

Part III


Item 10:		Directors, Executive Officers and Corporate Governance			97	104
Item 11:		Executive Compensation			97	104
Item 12:		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			97	104
Item 13:		Certain Relationships and Related Transactions, and Director Independence			97	104
Item 14:		Principal Accounting Fees and Services	104
			97

Part IV


Item 15:		Exhibits, Financial Statement Schedules			98	104
Item 16:	Form 10-K Summary	108
Signatures				99	105



Name	Age		Position
Adelene Q. Perkins	58		~~Position~~
~~Adelene Q. Perkins~~		55		~~President and~~ Chief Executive Officer
~~Julian Adams, Ph.D.~~		60		~~President of Research & Development~~
Lawrence E. Bloch, M.D., J.D.		49		~~Executive Vice President, Chief Financial Officer and Chief Business Officer~~
~~Vito J. Palombella, Ph.D.~~		52		~~Executive~~President and Treasurer
Jeffery L. Kutok, M.D., Ph.D.	51		Senior Vice President, Chief Scientific Officer
~~David~~Seth A. ~~Roth, M.D.~~ Tasker, J.D.	39		52		~~Executive~~ Vice President, ~~Chief Medical Officer~~General Counsel and Secretary

x

ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	2014				2013
	High		Low		High		Low
First quarter	$	16.70	$	11.30	$	50.51	$	32.13
Second quarter		13.25		8.40		50.40		16.07
Third quarter		16.93		8.80		23.68		15.45
Fourth quarter		18.25		11.90		18.35		11.57


	Year Ended December 31,
	2014			2013			2012			2011			2010
Statement of Operations Data:
Collaboration revenue	$	164,995		$	—		$	47,114		$	92,773		$	71,331

Operating expenses:
Research and development		143,633			99,760			118,595			108,582			99,232
General and administrative		29,285			27,916			27,882			22,719			21,070
Total operating expenses		172,918			127,676			146,477			131,301			120,302
Gain on termination of Purdue entities alliance		—			—			46,555			—			—
Loss from operations		(7,923	)		(127,676	)		(52,808	)		(38,528	)		(48,971	)
Interest income (expense), net		(9,310	)		896			(1,349	)		(1,514	)		(1,447	)
Income from Therapeutic Discovery Grants		—			—			—			—			734
Income from Massachusetts tax incentive award		—			—			193			—			—
Loss before income taxes		(17,233	)		(126,780	)		(53,964	)		(40,042	)		(49,684	)
Income tax		(183	)		—			—			—			700
Net loss	$	(17,416	)	$	(126,780	)	$	(53,964	)	$	(40,042	)	$	(48,984	)
Basic and diluted loss per common share	$	(0.36	)	$	(2.64	)	$	(1.70	)	$	(1.50	)	$	(1.86	)
Basic and diluted weighted average number of common shares outstanding		48,561,653			47,936,001			31,711,264			26,620,278			26,321,398


	As of December 31,
	2014			2013			2012			2011			2010
Selected Balance Sheet Data:
Cash, cash equivalents and available-for-sale securities, including long-term	$	333,245		$	214,468		$	326,635		$	115,937		$	100,959
Working capital		289,691			202,735			311,086			88,995			75,378
Total assets		369,144			230,710			335,660			124,490			124,566
Long-term debt due to Purdue entities, net of debt discount(1)		—			—			—			37,553			—
Due to Takeda, less current portion(2)		—			6,456			6,252			—			—
Construction liability(3)		15,456			—			—			—			—
Accumulated deficit		(467,212	)		(449,796	)		(323,016	)		(269,052	)		(229,010	)
Total stockholders’ equity		209,472			201,275			310,205			15,433			49,484


	2014			% Change			2013			% Change			2012
Collaboration revenue	$	164,995			—		$	—			(100	)%	$	47,114
Research and development expense		(143,633	)		44	%		(99,760	)		(16	)%		(118,595	)
General and administrative expense		(29,285	)		5	%		(27,916	)		0	%		(27,882	)
Gain on termination of Purdue entities alliance		—			—			—			(100	)%		46,555
Interest expense		(9,649	)		—			—			(100	)%		(1,908	)
Interest and investment income		339			(62	)%		896			60	%		559
Income from Massachusetts incentive tax award		—			—			—			(100	)%		193
Income taxes		(183	)		—			—			—			—


Program	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2012		January 1, 2006 to December 31, 2014
	(in millions)
PI3K Inhibitor(1)	$	120.8	$	71.7	$	48.8	$	282.8
Hsp90 inhibitor		1.6		12.1		21.3		137.7
Hedgehog pathway inhibitor		0.1		1.2		34.0		164.1


	December 31, 2014		December 31, 2013
	(in thousands)
Cash, cash equivalents and available-for-sale securities	$	333,245	$	214,468
Working capital		289,691		202,735



	December 31, 2017		December 31, 2016
	(in thousands)
Cash, cash equivalents and available-for-sale securities	$	57,609	$	92,064
Working capital	46,791		77,797



	Amounts accrued at December 31, 2016		Charges incurred during the year ended December 31, 2017		Amounts paid during the year ended December 31, 2017		Less non-cash charges during the year ended December 31, 2017		Amounts accrued at December 31, 2017
			(in thousands)
Employee severance, benefits and related costs for work force reduction	$	6,892	$	—	$	6,627	$	265	$	—
Contract termination, prepaid expense write-offs and other related costs	28		15		43		—		—
Total restructuring	$	6,920	$	15	$	6,670	$	265	$	—


	Payments Due by Period
	(in thousands)
Contractual Obligations	Total		2015		2016		2017		2018		2019		2020 and beyond
Due to Takeda	$	6,667	$	6,667	$	—	$	—	$	—	$	—	$	—
784 facility lease		21,485		1,362		2,044		2,044		2,044		2,044		11,947
780/790 facility lease		37,335		2,792		3,556		3,470		3,516		3,840		20,161
Software contract obligations		1,302		892		380		30		—		—		—

Total contractual cash obligations	$	66,789	$	11,713	$	5,980	$	5,544	$	5,560	$	5,884	$	32,108


	December 31,
	2014			2013
Assets
Current assets:
Cash and cash equivalents	$	307,405		$	68,114
Available-for-sale securities		25,321			145,772
Loan commitment asset, net (note 9)		647			—
Prepaid expenses and other current assets		11,195			11,055

Total current assets		344,568			224,941
Property and equipment, net		18,970			4,010
Long-term available-for-sale securities		519			582
Restricted cash		1,680			1,130
Long-term receivable (note 11)		3,006			—
Other assets		401			47

Total assets	$	369,144		$	230,710

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	5,947		$	6,375
Accrued expenses		17,768			9,164
Due to Takeda, current		6,667			6,667
Deferred revenue, current		24,495			—

Total current liabilities		54,877			22,206
Due to Takeda, less current portion		—			6,456
Deferred revenue, less current portion		85,510			—
Deferred rent (note 11)		3,375			458
Construction liability (note 11)		15,456			—
Other liabilities		454			315

Total liabilities		159,672			29,435
Commitments and contingencies (note 11)
Stockholders’ equity:
Preferred Stock, $.001 par value; 1,000,000 shares authorized, no shares issued and outstanding at December 31, 2014 and 2013		—			—
Common Stock, $.001 par value; 100,000,000 shares authorized, 48,878,828 and 48,227,838 shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively		49			48
Additional paid-in capital		676,521			650,867
Accumulated deficit		(467,212	)		(449,796	)
Accumulated other comprehensive income		114			156

Total stockholders’ equity		209,472			201,275

Total liabilities and stockholders’ equity	$	369,144		$	230,710


	Years Ended December 31,
	2014			2013			2012
Collaboration revenue	$	164,995		$	—		$	47,114

Operating expenses:
Research and development		143,633			99,760			118,595
General and administrative		29,285			27,916			27,882

Total operating expenses		172,918			127,676			146,477
Gain on termination of Purdue entities alliance		—			—			46,555

Loss from operations		(7,923	)		(127,676	)		(52,808	)

Other income (expense):
Interest expense		(9,649	)		—			(1,908	)
Income from Massachusetts tax incentive award		—			—			193
Investment and other income		339			896			559

Total other income (expense)		(9,310	)		896			(1,156	)

Loss before income taxes		(17,233	)		(126,780	)		(53,964	)
Income tax		(183	)		—			—

Net loss	$	(17,416	)	$	(126,780	)	$	(53,964	)

Basic and diluted loss per common share	$	(0.36	)	$	(2.64	)	$	(1.70	)

Basic and diluted weighted average number of common shares outstanding		48,561,653			47,936,001			31,711,264

Other comprehensive income (loss):
Net unrealized holding gains (losses) on available-for-sale securities arising during the period	$	(42	)	$	22		$	112

Comprehensive loss	$	(17,458	)	$	(126,758	)	$	(53,852	)


	Common Stock				Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
	Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
Balance at December 31, 2011		26,721,739	$	27	$	284,436	$	(269,052	)	$	22	$	15,433

Exercise of stock options		2,632,097		3		21,583							21,586
Exercise of warrants		29,958
Issuance of common stock in connection with public offering		12,646,461		13		244,779							244,792
Issuance of common stock to Purdue entities		5,416,565		5		74,430							74,435
Stock-based compensation expense						7,117							7,117
401(k) plan match issued in common stock		52,437				694							694
Unrealized gain on marketable securities											112		112
Net loss								(53,964	)				(53,964	)

Balance at December 31, 2012		47,499,257	$	48	$	633,039	$	(323,016	)	$	134	$	310,205

Exercise of stock options		634,420				5,299							5,299
Exercise of warrants		32,248
Stock-based compensation expense						11,495							11,495
401(k) plan match issued in common stock		30,010				660							660
Issuance of common stock related to employee stock purchase plan		31,903				374							374
Unrealized gain on marketable securities											22		22
Net loss								(126,780	)				(126,780	)

Balance at December 31, 2013		48,227,838	$	48	$	650,867	$	(449,796	)	$	156	$	201,275



~~Laboratory equipment~~		~~5 years~~
Computer equipment and software		3 to 5 years
Leasehold improvements		Shorter of lease term or useful life of asset
Building and building improvements		10 to 50 years, less estimated residual value at the end of the financing obligation term
Furniture and fixtures		7 to 10 years


	At December 31,
	2014		2013		2012
Stock options		6,577,296		6,083,318		5,574,527
Warrants		1,000,000		—		50,569


	Year Ended December 31,
	2014		2013		2012
	(in thousands)
Research and development	$	7,502	$	6,213	$	3,177
General and administrative		5,086		5,942		4,634



	Restricted Stock		Weighted-Average Grant-Date Fair Value
Unvested at January 1, 2017	797,111		$	1.43
Granted	—		—
Vested	(190,989	)	1.54
Canceled	(606,122	)	1.40
Unvested at December 31, 2017	—		$	—


	Stock Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (years)		Aggregate Intrinsic Value (in millions)
Outstanding at January 1, 2014		6,083,318		$	14.04
Granted		1,576,734			12.60
Exercised		(523,954	)		7.41
Forfeited		(558,802	)		19.53

Outstanding at December 31, 2014		6,577,296		$	13.76		6.3	$	37.5

Vested or expected to vest at December 31, 2014		6,274,310		$	13.59		6.1	$	36.5

Exercisable at December 31, 2014		4,704,549		$	12.08		5.3	$	31.1



	Stock Options		Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in millions)
Outstanding at January 1, 2017	6,067,945		$	12.06
Granted	4,796,500		1.61
Exercised	—		—
Forfeited	(3,403,723	)	10.57
Outstanding at December 31, 2017	7,460,722		$	6.02	7.2	$	2.0
Exercisable at December 31, 2017	3,028,913		$	11.53	4.8	$	0.2


	December 31, 2014			December 31, 2013
Risk-free interest rate		0.3	%		0.3	%
Expected annual dividend yield		—			—
Expected stock price volatility		66.7	%		91.5	%
Expected term of options		1.25 years			1.25 years


	December 31, 2014
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
Cash and cash equivalents due in 90 days or less	$	307,405	$	—	$	—		$	307,405

Available-for-sale securities:
Corporate obligations due in one year or less		21,324		6		(1	)		21,329
Mortgage-backed securities due after ten years		412		107		—			519
U.S. government-sponsored enterprise obligations due in one year or less		3,990		2		—			3,992

Total available-for-sale securities		25,726		115		(1	)		25,840

Total cash, cash equivalents and available-for-sale securities	$	333,131	$	115	$	(1	)	$	333,245


	Level 1		Level 2
	(in thousands)
Assets:
Cash and cash equivalents	$	256,559	$	50,846
Corporate obligations (including commercial paper)		—		21,329
Mortgage-backed securities		—		519
U.S. government-sponsored enterprise obligations		—		3,992

Total	$	256,559	$	76,686


	Quarter Ended March 31, 2014			Quarter Ended June 30, 2014			Quarter Ended September 30, 2014			Quarter Ended December 31, 2014
	(in thousands, except shares and per share amounts)
Collaboration revenue	$	—		$	—		$	160,639		$	4,356
Operating expenses:
Research and development		34,491			28,165			44,895			36,082
General and administrative		6,804			7,057			8,042			7,382

Total operating expenses		41,295			35,222			52,937			43,464

Income (loss) from operations		(41,295	)		(35,222	)		107,702			(39,108	)
Other income (expenses):
Interest expense		(1,139	)		(2,938	)		(4,537	)		(1,035	)
Interest and investment income		168			136			52			(17	)

Total other income (expense)		(971	)		(2,802	)		(4,485	)		(1,052	)

Loss before income taxes		(42,266	)		(38,024	)		103,217			(40,160	)
Income tax		—			—			—			(183	)

Net income (loss)	$	(42,266	)	$	(38,024	)	$	103,217		$	(40,343	)

Income (loss) per common share:
Basic	$	(0.87	)	$	(0.78	)	$	2.08		$	(0.83	)

Diluted	$	(0.87	)	$	(0.78	)	$	2.03		$	(0.83	)

Weighted average number of common shares outstanding:
Basic		48,348,767			48,543,853			48,632,888			48,788,917

Diluted		48,348,767			48,543,853			49,735,303			48,788,917


	Quarter Ended March 31, 2013			Quarter Ended June 30, 2013			Quarter Ended September 30, 2013			Quarter Ended December 31, 2013
	(in thousands, except shares and per share amounts)
Operating expenses:
Research and development	$	20,231		$	26,080		$	26,857		$	26,592
General and administrative		7,430			6,675			7,319			6,492

Total operating expenses		27,661			32,755			34,176			33,084

Loss from operations		(27,661	)		(32,755	)		(34,176	)		(33,084	)
Other income:
Interest and investment income		335			164			238			159

Total other income		335			164			238			159

Net loss	$	(27,326	)	$	(32,591	)	$	(33,938	)	$	(32,925	)

Basic and diluted net loss per common share	$	(0.57	)	$	(0.68	)	$	(0.71	)	$	(0.68	)

Basic and diluted weighted average number of common shares outstanding		47,620,147			47,915,726			48,052,939			48,114,922



	Quarter Ended March 31, 2017			Quarter Ended June 30, 2017			Quarter Ended September 30, 2017			Quarter Ended December 31, 2017
	(in thousands, except shares and per share amounts)
Collaboration revenue	$	—		$	—		$	6,000		$	—
Operating expenses:
Research and development	4,039			3,901			9,338			3,552
General and administrative	6,437			6,205			4,505			4,468
Total operating expenses	10,476			10,106			13,843			8,020
Loss from operations	(10,476		)	(10,106		)	(7,843		)	(8,020		)
Other income (expenses):
Interest expense	(302		)	(300		)	(287		)	(121		)
Other expense (note 7)	—			(6,882		)	—			—
Investment and other income	303			334			1,026			124
Total other income (expense)	1			(6,848		)	739			3
Loss before income taxes	(10,475		)	(16,954		)	(7,104		)	(8,017		)
Income taxes benefit	—			—			—			720
Net loss	$	(10,475	)	$	(16,954	)	$	(7,104	)	$	(7,297	)
Basic and diluted loss per common share:	$	(0.21	)	$	(0.34	)	$	(0.14	)	$	(0.14	)
Basic and diluted weighted average number of common shares outstanding:	50,423,353			50,455,832			50,635,828			50,721,658

	Quarter Ended March 31, 2016			Quarter Ended June 30, 2016			Quarter Ended September 30, 2016			Quarter Ended December 31, 2016
	(in thousands, except shares and per share amounts)
Collaboration revenue	$	9,256		$	9,467		$	—		$	—
Operating expenses:
Research and development	39,188			52,947			12,814			14,662
General and administrative	10,836			15,692			7,120			8,571
Total operating expenses	50,024			68,639			19,934			23,233
Gain on AbbVie Opt-Out (note 12)	—			112,216			—			—
Income (loss) from operations	(40,768		)	53,044			(19,934		)	(23,233		)
Other income (expenses):
Interest expense	(309		)	(307		)	(305		)	(304		)
Interest and investment income (loss)	413			254			741			607
Total other income (expense)	104			(53		)	436			303
Net income (loss)	$	(40,664	)	$	52,991		$	(19,498	)	$	(22,930	)
Income (loss) per common share:
Basic	$	(0.82	)	$	1.05		$	(0.39	)	$	(0.46	)
Diluted	$	(0.82	)	$	1.05		$	(0.39	)	$	(0.46	)
Weighted average number of common shares outstanding:
Basic	49,339,888			49,437,062			49,583,776			50,099,153
Diluted	49,339,888			49,439,537			49,583,776			50,099,153




	Page number
Report of Independent Registered Public Accounting Firm ~~on Financial Statements~~		65	76
Consolidated Balance Sheets at December 31, ~~2014~~2017 and ~~2013~~2016		66	77
Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, ~~2014, 2013~~2017, 2016 and ~~2012~~2015		67	78
Consolidated Statements of Cash Flows for the years ended December 31, ~~2014, 2013~~2017, 2016 and ~~2012~~2015		68	79
Consolidated Statements of Stockholders’ Equity for the years ended December 31, ~~2014, 2013~~2017, 2016 and ~~2012~~2015		69	80
Notes to Consolidated Financial Statements		71	81



		Incorporated by Reference
Exhibit No.	Description	Form	SEC Filing date	Exhibit Number	Filed with this 10-K
3.1	Restated Certificate of Incorporation of the Registrant.	10-Q	8/9/2007	3.1
3.2	Amended and Restated Bylaws of the Registrant.	8-K	3/17/2009	3.1
4.1	Form of Common Stock Certificate.	10-K	3/14/2008	4.1
Collaboration Agreements
10.1†	Amended and Restated Development and License Agreement, dated as of December 24, 2012, by and between the Registrant and Intellikine, LLC.	10-K	3/5/2013	10.4
10.2	Amendment to Amended and Restated Development and License Agreement, dated as of July 29, 2014, by and between Infinity Pharmaceuticals, Inc. and Intellikine LLC.	10-Q	11/10/2014	10.1
10.3	Amendment No. 2 to Amended and Restated Development and License Agreement, dated as of September 27, 2016, by and between Infinity Pharmaceuticals, Inc. and Intellikine LLC.	10-Q	11/9/2016	10.1
10.4	Third Amendment to Amended and Restated Development and License Agreement, dated July 26, 2017, by and between the Registrant and Intellikine LLC.	10-Q	11/7/2017	10.1
10.5	Convertible Promissory Note, dated July 26, 2017, by and between Registrant and Intellikine LLC.	10-Q	11/7/2017	10.2
10.6†	Amended and Restated License Agreement, dated as of November 1, 2016, by and between the Registrant and Verastem, Inc.	10-K	3/14/2017	10.4
10.7	Termination and Revised Relationship Agreement, dated as of July 17, 2012, between the Registrant and Mundipharma International Corporation Limited.	8-K	7/19/2012	10.2
10.8	Termination and Revised Relationship Agreement, dated as of July 17, 2012, between the Registrant and Purdue Pharmaceutical Products L.P.	8-K	7/19/2012	10.3
Financing Agreements
10.9	Form of Warrant to Purchase Common Stock of Infinity Pharmaceuticals, Inc., issued to the Deerfield Entities, together with a schedule of holders and amounts (issued February 24, 2014).	10-Q	5/6/2014	10.2
Leases
10.10	Lease Agreement, dated as of September 25, 2014, between Infinity Pharmaceuticals, Inc. and BHX, LLC, as trustee of 784 Realty Trust.	10-Q	11/10/2014	10.4
10.11	Amendment to Lease, dated as of March 27, 2017, between Infinity Pharmaceuticals, Inc. and BHX, LLC as trustee of 784 Realty Trust.	8-K	3/29/2017	10.1
10.12	Second Amendment of Lease, dated as of May 18, 2017, between Infinity Pharmaceuticals, Inc. and BHX, LLC as trustee of 784 Realty Trust.	8-K	5/22/2017	10.1
10.13	Third Amendment of Lease, dated as of May 31, 2017, between Infinity Pharmaceuticals, Inc. and BHX, LLC as trustee of 784 Realty Trust.	8-K	6/2/2017	10.1


~~Signature~~	~~Title~~	~~Date~~

~~/s/ ADELENE~~ ~~Q. PERKINS~~ ~~Adelene Q. Perkins~~	~~President, Chief Executive Officer; Chair of the Board of Directors~~	~~February 24, 2015~~
	~~(Principal Executive Officer)~~

~~/s/ LAWRENCE~~ ~~E. BLOCH, M.D., J.D.~~ ~~Lawrence E. Bloch, M.D., J.D.~~	~~Executive Vice President, Chief Financial Officer and~~ ~~Chief Business Officer; Secretary and Treasurer~~	~~February 24, 2015~~
	~~(Principal Financial Officer, Principal Accounting Officer)~~

~~/s/ JOSÉ~~ B~~ASELGA, M.D., P~~H~~.D.~~ ~~José Baselga, M.D., Ph.D.~~	~~Director~~	~~February 23, 2015~~

~~/s/ JEFFREY~~ B~~ERKOWITZ, J.D.~~ ~~Jeffrey Berkowitz, J.D.~~	~~Director~~	~~February 18, 2015~~

~~/s/ ANTHONY~~ ~~B. EVNIN, P~~H~~.D.~~ ~~Anthony B. Evnin, Ph.D.~~	~~Director~~	~~February 24, 2015~~

~~/s/ GWEN~~ ~~A. FYFE, M.D.~~ ~~Gwen A. Fyfe, M.D.~~	~~Director~~	~~February 18, 2015~~

~~/s/ ERIC~~ ~~S. LANDER, P~~H~~.D.~~	~~Director~~	~~February 18, 2015~~
~~Eric S. Lander, Ph.D.~~

~~/s/ NORMAN~~ ~~C. SELBY~~	~~Director~~	~~February 24, 2015~~
~~Norman C. Selby~~

~~/s/ I~~AN ~~F. SMITH~~ ~~Ian F. Smith~~	~~Director~~	~~February 24, 2015~~

~~/s/ MICHAEL~~ ~~C. VENUTI, P~~H~~.D.~~ ~~Michael C. Venuti, Ph.D.~~	~~Director~~	~~February 24, 2015~~



	INFINITY PHARMACEUTICALS, INC.

Date: March 15, 2018	By:	/s/ ADELENE Q. PERKINS
		Adelene Q. Perkins Chief Executive Officer (Principal Executive Officer)