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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2017	May 08, 2017
Document and Entity Information
Entity Registrant Name	Verastem, Inc.
Entity Central Index Key	0001526119
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		36,992,418
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 28,179	$ 32,349
Short-term investments	44,392	48,548
Prepaid expenses and other current assets	1,434	398
Total current assets	74,005	81,295
Property and equipment, net	1,271	1,417
Restricted cash	162	162
Other assets	811	755
Total assets	76,249	83,629
Current liabilities:
Accounts payable	8,809	4,095
Accrued expenses	4,424	6,896
Total current liabilities	13,233	10,991
Long-term debt	2,249
Other non-current liabilities	295	341
Total liabilities	15,777	11,332
Stockholders' equity
Preferred stock, $0.0001 par value; 5,000 shares authorized, no shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively	0	0
Common stock, $0.0001 par value; 100,000 shares authorized, 36,992 and 36,992 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively	4	4
Additional paid-in capital	308,801	307,587
Accumulated other comprehensive income	12	29
Accumulated deficit	(248,345)	(235,323)
Total stockholders' equity	60,472	72,297
Total liabilities and stockholders' equity	$ 76,249	$ 83,629

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	36,992,000	36,992,000
Common stock, shares outstanding	36,992,000	36,992,000

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating expenses:
Research and development	$ 8,385	$ 4,179
General and administrative	4,763	4,255
Total operating expenses	13,148	8,434
Loss from operations	(13,148)	(8,434)
Interest income	155	140
Interest expense	(12)
Net loss	$ (13,005)	$ (8,294)
Net loss per share - basic and diluted	$ (0.35)	$ (0.22)
Weighted-average number of common shares used in net loss per share-basic and diluted	36,992	36,975
Net loss	$ (13,005)	$ (8,294)
Unrealized (loss) gain on available-for-sale securities	(17)	92
Comprehensive loss	$ (13,022)	$ (8,202)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating activities
Net loss	$ (13,005)	$ (8,294)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	146	183
Stock-based compensation expense	1,197	1,706
Amortization of deferred financing costs, debt discounts and premiums and discounts on available-for-sale marketable securities	46	(12)
Changes in operating assets and liabilities:
Prepaid expenses, other current assets and other assets	(1,092)	(376)
Accounts payable	4,594	(1,347)
Accrued expenses and other liabilities	(2,538)	(2,613)
Liability classified stock-based compensation awards		(69)
Net cash used in operating activities	(10,652)	(10,822)
Investing activities
Purchase of investments	(6,461)	(36,346)
Maturities of investments	10,557	37,450
Net cash provided by investing activities	4,096	1,104
Financing activities
Proceeds from long-term debt, net	2,386
Cash used to settle restricted stock liability		(5)
Net cash provided by (used in) financing activities	2,386	(5)
Increase (decrease) in cash and cash equivalents	(4,170)	(9,723)
Cash and cash equivalents at beginning of period	32,349	24,870
Cash and cash equivalents at end of period	28,179	$ 15,147
Supplemental disclosure of non-cash investing and financing activities
Deferred financing costs in accounts payable and accrued expenses	$ 140

Summary of significant accounting policies	3 Months Ended
Summary of significant accounting policies	Mar. 31, 2017
Summary of significant accounting policies.
Significant accounting policies	2. Summary of significant accounting policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) for interim financial reporting and as required by Regulation S-X, Rule 10-01. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included. When preparing financial statements in conformity with GAAP, the Company must make estimates and assumptions that affect the reported amounts and related disclosures at the date of the financial statements. Actual results could differ from those estimates. Additionally, operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2017. For further information, refer to the financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the Securities and Exchange Commission (SEC) on March 23, 2017. Recently Issued Accounting Standards Updates In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The Company has not chosen to early adopt this standard and is currently evaluating the impact the adoption will have on its consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. The standard is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The Company has not chosen to early adopt this standard and is currently evaluating the impact the adoption of the standard will have on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the guidance under FASB Accounting Standards Codification (ASC) Topic 840, Leases, resulting in the creation of FASB ASC Topic 842, Leases. ASU 2016-02 requires lessees to recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for both finance and operating leases. The guidance also eliminates the current real estate-specific provisions for all entities. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. The Company has not chosen early adoption for this ASU and is currently evaluating its effect on its consolidated financial statements and related disclosures. Recently Adopted Accounting Standards Updates In January 2017, the FASB issued ASU 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments – Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings. ASU 2017-03 clarifies the SEC staff’s expectations about the extent of disclosures that a registrant is expected to provide regarding the impact that the adoption of ASUs 2014-09 (Revenue from Contracts with Customers), 2016-02 (Leases) and 2016-13 (Measurement of Credit Losses on Financial Instruments) will have on its financial statements. It also conforms SEC guidance on accounting for tax benefits resulting from investments in affordable housing projects to the guidance in ASU 2014-01, Investments -Equity Method and Joint Ventures (Topic 323). The guidance under this ASU was effective upon issuance and did not have a material impact on the Company’s disclosures. In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control. ASU 2016-17 updates ASU 2015-02. Under the amendments, a single decision maker is not required to consider indirect interests held through related parties that are under common control with the single decision maker to be the equivalent of direct interests in their entirety. Instead, a single decision maker is required to include those interests on a proportionate basis consistent with indirect interests held through other related parties. ASU 2016-17 is effective for annual and interim periods beginning after December 15, 2016. The Company adopted this standard effective January 1, 2017. The adoption of this ASU did not have an effect on the Company’s financial statements of disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies the accounting for share-based compensation arrangements, including the accounting for forfeitures, income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The standard was effective for annual and interim periods beginning after December 15, 2016, with early adoption permitted. The Company adopted ASU 2016-09 effective January 1, 2017. Upon adoption, the Company elected to begin accounting for forfeitures as they occur, rather than estimating a forfeiture rate, and recorded an immaterial cumulative-effect adjustment to opening accumulated deficit. Also upon adoption, the Company recognized all previously unrecognized tax benefits, which would have resulted in the recognition of an immaterial cumulative-effect adjustment to opening accumulated deficit; however, these unrecognized tax benefits were recorded as a deferred tax asset, which was fully offset by a valuation allowance. Therefore, the recognition of these benefits had no net cumulative-effect on opening accumulated deficit upon adoption. Significant accounting policies There have been no material changes, other than those described above, to the significant accounting policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the SEC on March 23, 2017.

Fair value of financial instruments

3 Months Ended

Mar. 31, 2017

Fair value of financial instruments

Fair value of financial instruments

3. Fair value of financial instruments

The Company determines the fair value of its financial instruments based upon the fair value hierarchy, which prioritizes valuation inputs based on the observable nature of those inputs. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The hierarchy defines three levels of valuation inputs:

Level 1 inputs	Quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date.
Level 2 inputs	Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 inputs	Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

Items Measured at Fair Value on a Recurring Basis

The following table presents information about the Company’s financial instruments that are measured at fair value on a recurring basis (in thousands):




	March 31, 2017
Description	Total		Level 1		Level 2		Level 3
Financial assets
Cash equivalents	$	26,240	$	21,240	$	5,000	$	—
Short-term investments		44,392		—		44,392		—
Total financial assets	$	70,632	$	21,240	$	49,392	$	—




	December 31, 2016
Description	Total		Level 1		Level 2		Level 3
Financial assets
Cash equivalents	$	30,540	$	20,540	$	10,000	$	—
Short-term investments		48,548		—		48,548		—
Total financial assets	$	79,088	$	20,540	$	58,548	$	—

The Company’s cash equivalents and investments are comprised of U.S. Government money market funds, overnight repurchase agreements collateralized by U.S. Government agency securities or U.S. Treasury securities, and corporate bonds and commercial paper of publicly traded companies. These investments have been initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing third party pricing services or other market observable data. The pricing services utilize industry standard valuation models, including both income and market based approaches and observable market inputs to determine value. These observable market inputs include reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events. The Company validates the prices provided by third party pricing services by reviewing their pricing methods and matrices, obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming that the relevant markets are active. After completing its validation procedures, the Company did not adjust or override any fair value measurements provided by the pricing services as of March 31, 2017 and December 31, 2016.

Fair Value of Financial Instruments

The fair value of the Company’s debt is determined using current applicable rates for similar instruments as of the balance sheet dates and an assessment of the credit rating of the Company. The carrying value of the Company’s debt approximates fair value because the Company’s interest rate yield is near current market rates for comparable debt instruments. The fair value of the Company’s notes payable was determined using Level 3 inputs.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Investments

3 Months Ended

Mar. 31, 2017

Investments

Investments

4. Investments

Cash, cash equivalents and investments consist of the following (in thousands):


	March 31, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Cash and cash equivalents:
Cash and money market accounts	$	23,179	$	—	$	—	$	23,179
Overnight repurchase agreements		5,000		—		—		5,000
Total cash and cash equivalents	$	28,179	$	—	$	—	$	28,179
Investments:
Corporate bonds and commercial paper (due within 1 year)	$	44,380	$	30	$	(18)	$	44,392
Total investments	$	44,380	$	30	$	(18)	$	44,392
Total cash, cash equivalents, and investments	$	72,559	$	30	$	(18)	$	72,571


	December 31, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Cash and cash equivalents:
Cash and money market accounts	$	22,349	$	—	$	—	$	22,349
Overnight repurchase agreements		10,000		—		—		10,000
Total cash and cash equivalents	$	32,349	$	—	$	—	$	32,349
Investments:
Corporate bonds and commercial paper (due within 1 year)	$	48,519	$	53	$	(24)	$	48,548
Total investments	$	48,519	$	53	$	(24)	$	48,548
Total cash, cash equivalents, and investments	$	80,868	$	53	$	(24)	$	80,897

There were no realized gains or losses on investments for the three months ended March 31, 2017 or 2016.

- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References + Details

Accrued expenses

3 Months Ended

Mar. 31, 2017

Accrued expenses

Accrued expenses

5. Accrued expenses

Accrued expenses consist of the following (in thousands):



	March 31, 2017		December 31, 2016
Contract research organization costs	$	2,719	$	3,258
Compensation and related benefits		677		2,505
Professional fees		610		403
Consulting fees		193		527
Deferred rent		179		175
Other		46		28
	$	4,424	$	6,896

Long-term debt

3 Months Ended

Mar. 31, 2017

Debt

Long-term debt

6. Long-term debt

On March 21, 2017 (Closing Date), Verastem, Inc. (Borrower) entered into a term loan facility of up to $25.0 million (Term Loan) with Hercules Capital, Inc., a Maryland corporation (Hercules), the proceeds of which will be used for its ongoing research and development programs and for general corporate purposes. The Term Loan is governed by a loan and security agreement, dated March 21, 2017 (Loan Agreement), which provides for up to four separate advances subject to certain conditions of funding. The first tranche of $2.5 million was drawn on the Closing Date.

The Term Loan will mature on December 1, 2020 (Loan Maturity Date). Each advance accrues interest at a floating per annum rate equal to the greater of either (a) 10.5% or (b) the lesser of (i) 12.75% and (ii) the sum of (x) 10.5% plus (y) (A) the prime rate minus (B) 4.5%. As of March 31, 2017, the interest rate was 10.5%. The Term Loan provides for interest-only payments until November 1, 2018. The interest-only period may be extended to May 1, 2019 if the Borrower obtains minimum cash proceeds of $20.0 million from a sale of equity securities or subordinated debt and/or ongoing commercial partnerships. Thereafter, amortization payments will be payable monthly in twenty-six installments (or, if the period requiring interest-only payments has been extended to May 1, 2019, in twenty installments) of principal and interest (subject to recalculation upon a change in prime rates).

The Term Loan is secured by a lien on substantially all of the assets of the Borrower, other than intellectual property, and contains customary covenants and representations.

The Company assessed all terms and features of the Loan Agreement in order to identify any potential embedded features that would require bifurcation or any beneficial conversion features. As part of this analysis, the Company assessed the economic characteristics and risks of the Loan Agreement, including put and call features. The Company determined that all features of the Loan Agreement were clearly and closely associated with a debt host and did not require bifurcation as a derivative liability, or the fair value of the feature was immaterial to the Company's financial statements. The Company reassesses the features on a quarterly basis to determine if they require separate accounting.

The future principal payments under the Loan Agreement are as follows as of March 31, 2017 (in thousands):


Remainder of 2017	$	—
2018		146
2019		936
2020		1,418
Total	$	2,500

Net loss per share

3 Months Ended

Mar. 31, 2017

Net loss per share

Net loss per share

7. Net loss per share

Basic and diluted net loss per common share is calculated by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for common stock equivalents. The Company’s potentially dilutive shares, which include outstanding stock options, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive.

The following potentially dilutive securities were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect:


	Three months ended
	March 31,
	2017	2016
Outstanding stock options	7,337,655	5,473,372
Outstanding warrants	—	142,857
	7,337,655	5,616,229

Stock-based compensation

3 Months Ended

Mar. 31, 2017

Stock-based compensation

Stock-based compensation

8. Stock‑based compensation

Stock options

A summary of the Company’s stock option activity and related information for the three months ended March 31, 2017 is as follows:


				Weighted-average
		Weighted-average		remaining	Aggregate
		exercise price per		contractual term	intrinsic value
	Shares	share		(years)	(in thousands)
Outstanding at December 31, 2016	5,848,470	$	6.35	8.0	$	62
Granted	1,660,000	$	1.21
Exercised	—	$	—
Forfeited/cancelled	(170,815)	$	2.28
Outstanding at March 31, 2017	7,337,655	$	5.29	8.2	$	2,489
Vested at March 31, 2017	3,625,943	$	7.95	7.2	$	457
Vested and expected to vest at March 31, 2017(1)	7,087,655	$	5.42	8.2	$	2,315

(1)

This represents the number of vested options as of March 31, 2017, plus the number of unvested options expected to vest as of March 31, 2017.

The fair value of each stock option granted during the three months ended March 31, 2017 and 2016 was estimated on the grant date using the Black-Scholes option-pricing model using the following weighted-average assumptions:


	Three months ended March 31,
	2017		2016
Risk-free interest rate	2.06	%	1.90	%
Volatility	79	%	73	%
Dividend yield	—		—
Expected term (years)	6.4		5.8

In June 2016, the Company granted stock options to purchase a total of 500,000 shares of common stock to certain employees that vest only upon the achievement of specified performance conditions. The grant date fair value of these options was approximately $445,000. In October 2016, the Company determined that 50% of performance conditions had been achieved and as a result 250,000 shares vested and the Company recognized stock-based compensation expense of approximately $222,000 for the year ended December 31, 2016. The Company determined that the remaining 50% of the performance conditions were not considered probable of achievement as of March 31, 2017 and as a result, has not recognized any stock-based compensation expense related to the remaining unvested awards.

Restricted stock units

The approximate total fair value of restricted stock units (RSUs) vested during the three months ended March 31, 2016 was $65,000. As of March 31, 2016, all RSUs had vested and there was no remaining unrecognized stock-based compensation expense. There were no RSUs granted during or subsequent to the three months ended March 31, 2016.

During the first quarter of 2013, the Company amended the terms of certain RSUs related to a total of 697,060 shares of common stock to allow for tax withholdings greater than the minimum required statutory withholding amount. As a result of this change in the terms of the awards, the outstanding RSUs were considered to be liability instruments. As a result of this modification, the Company recorded a liability for the fair value of the awards as of each reporting date with the change in fair value recorded through the statement of operations. During the three months ended March 31, 2016, the Company made approximate deposits with the taxing authorities of $5,000 in respect of the tax liability for awards that settled during the period. As of March 31, 2016, the Company had no remaining tax liability related to these awards.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References + Details

Equity offerings	3 Months Ended
Equity offerings	Mar. 31, 2017
Equity offerings.
Equity offerings	9. Equity offerings In March 2017, the Company terminated the at-the-market equity offering program established in December 2013 and established a new at-the-market equity offering program pursuant to which it is able to offer and sell up to $35.0 million of its common stock at then current market prices from time to time through Cantor Fitzgerald & Co., as sales agent. The Company has not commenced sales under this program.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

+ Details

Fair value of financial instruments (Tables)

3 Months Ended

Mar. 31, 2017

Fair value of financial instruments

Schedule of financial instruments measured at fair value on a recurring basis

The following table presents information about the Company’s financial instruments that are measured at fair value on a recurring basis (in thousands):




	March 31, 2017
Description	Total		Level 1		Level 2		Level 3
Financial assets
Cash equivalents	$	26,240	$	21,240	$	5,000	$	—
Short-term investments		44,392		—		44,392		—
Total financial assets	$	70,632	$	21,240	$	49,392	$	—




	December 31, 2016
Description	Total		Level 1		Level 2		Level 3
Financial assets
Cash equivalents	$	30,540	$	20,540	$	10,000	$	—
Short-term investments		48,548		—		48,548		—
Total financial assets	$	79,088	$	20,540	$	58,548	$	—

Investments (Tables)

3 Months Ended

Mar. 31, 2017

Investments

Schedule of cash, cash equivalents and investments

Cash, cash equivalents and investments consist of the following (in thousands):


	March 31, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Cash and cash equivalents:
Cash and money market accounts	$	23,179	$	—	$	—	$	23,179
Overnight repurchase agreements		5,000		—		—		5,000
Total cash and cash equivalents	$	28,179	$	—	$	—	$	28,179
Investments:
Corporate bonds and commercial paper (due within 1 year)	$	44,380	$	30	$	(18)	$	44,392
Total investments	$	44,380	$	30	$	(18)	$	44,392
Total cash, cash equivalents, and investments	$	72,559	$	30	$	(18)	$	72,571


	December 31, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Cash and cash equivalents:
Cash and money market accounts	$	22,349	$	—	$	—	$	22,349
Overnight repurchase agreements		10,000		—		—		10,000
Total cash and cash equivalents	$	32,349	$	—	$	—	$	32,349
Investments:
Corporate bonds and commercial paper (due within 1 year)	$	48,519	$	53	$	(24)	$	48,548
Total investments	$	48,519	$	53	$	(24)	$	48,548
Total cash, cash equivalents, and investments	$	80,868	$	53	$	(24)	$	80,897

Stock-based compensation (Tables)

3 Months Ended

Mar. 31, 2017

Stock-based compensation

Summary of stock option activity and related information


				Weighted-average
		Weighted-average		remaining	Aggregate
		exercise price per		contractual term	intrinsic value
	Shares	share		(years)	(in thousands)
Outstanding at December 31, 2016	5,848,470	$	6.35	8.0	$	62
Granted	1,660,000	$	1.21
Exercised	—	$	—
Forfeited/cancelled	(170,815)	$	2.28
Outstanding at March 31, 2017	7,337,655	$	5.29	8.2	$	2,489
Vested at March 31, 2017	3,625,943	$	7.95	7.2	$	457
Vested and expected to vest at March 31, 2017(1)	7,087,655	$	5.42	8.2	$	2,315

Schedule of assumptions used to estimate fair value of each stock option on grant date


	Three months ended March 31,
	2017		2016
Risk-free interest rate	2.06	%	1.90	%
Volatility	79	%	73	%
Dividend yield	—		—
Expected term (years)	6.4		5.8

Investments (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Dec. 31, 2015
Amortized cost
Cash and cash equivalents, Amortized cost	$ 28,179	$ 15,147	$ 32,349	$ 24,870
Investments, Amortized Cost	44,380		48,519
Total cash, cash equivalents, and investments, Amortized Cost	72,559		80,868
Gross unrealized gains
Gross unrealized gains	30		53
Gross unrealized losses
Gross unrealized losses	(18)		(24)
Fair value
Cash and cash equivalents, Fair value	28,179		32,349
Short-term investments	44,392		48,548
Total cash, cash equivalents, and investments, Fair Value	72,571		80,897
Realized gains or losses
Realized gains or losses on investments	0	$ 0
Cash and money market accounts
Amortized cost
Cash and cash equivalents, Amortized cost	23,179		22,349
Fair value
Cash and cash equivalents, Fair value	23,179		22,349
Overnight repurchase agreements
Amortized cost
Cash and cash equivalents, Amortized cost	5,000		10,000
Fair value
Cash and cash equivalents, Fair value	$ 5,000		$ 10,000
Corporate bonds and commercial paper
Investments
Maximum maturity period, investments	1 year		1 year
Amortized cost
Due within 1 year	$ 44,380		$ 48,519
Gross unrealized gains
Gross unrealized gains	30		53
Gross unrealized losses
Gross unrealized losses	(18)		(24)
Fair value
Due within 1 year	$ 44,392		$ 48,548

Accrued expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Accrued expenses
Contract research organization costs	$ 2,719	$ 3,258
Compensation and related benefits	677	2,505
Professional fees	610	403
Consulting fees	193	527
Deferred rent	179	175
Other	46	28
Accrued expenses	$ 4,424	$ 6,896

Long-term debt (Details) $ in Thousands		3 Months Ended
Long-term debt (Details) $ in Thousands	Mar. 21, 2017 USD ($) item	Mar. 31, 2017 USD ($)
Long-term debt
Amount drawn		$ 2,386
Term loan
Long-term debt
Maximum borrowing capacity	$ 25,000
Number of separate advances \| item	4
Amount drawn	$ 2,500
Interest rate	10.50%	10.50%
Basis spread	(4.50%)
Minimum cash proceeds to extend interest only payment period	$ 20,000
Amortization payments, installments \| item	26
Future principal payments
2018		$ 146
2019		936
2020		1,418
Total		$ 2,500
Term loan \| Interest-only payments extended
Long-term debt
Amortization payments, installments \| item	20
Term loan \| Minimum
Long-term debt
Interest rate	10.50%
Term loan \| Maximum
Long-term debt
Interest rate	12.75%

Stock-based compensation - Stock Options (Details) - USD ($)	1 Months Ended		3 Months Ended		12 Months Ended
	Oct. 31, 2016	Jun. 30, 2016	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Shares
Outstanding at the beginning of the period (in shares)			5,848,470
Granted (in shares)			1,660,000
Forfeited/cancelled (in shares)			(170,815)
Outstanding at the end of the period (in shares)			7,337,655		5,848,470
Vested at the end of the period (in shares)			3,625,943
Vested and expected to vest at end of period (in shares)			7,087,655
Weighted-average exercise price per share
Outstanding at the beginning of the period (in dollars per share)			$ 6.35
Granted (in dollars per share)			1.21
Forfeited/cancelled (in dollars per share)			2.28
Outstanding at the end of the period (in dollars per share)			5.29		$ 6.35
Vested at the end of the period (in dollars per share)			7.95
Vested and expected to vest at end of the period (in dollars per share)			$ 5.42
Weighted-average remaining contractual term
Outstanding at the end of the period					8 years
Vested at the end of the period			7 years 2 months 12 days
Vested and expected to vest at the end of the period			8 years 2 months 12 days
Exercisable at the end of the period			8 years 2 months 12 days
Aggregate intrinsic value
Outstanding at the end of the period (in dollars)			$ 2,489,000		$ 62,000
Vested at the end of the period (in dollars)			457,000
Vested and expected to vest at end of the period (in dollars)			$ 2,315,000
Assumptions used to estimate fair value of each stock-based award on the grant date
Risk-free interest rate (as a percent)			2.06%	1.90%
Volatility (as a percent)			79.00%	73.00%
Expected term			6 years 4 months 24 days	5 years 9 months 18 days
Performance shares
Shares
Granted (in shares)		500,000
Vested at the end of the period (in shares)	250,000
Additional disclosures
Grant date fair value of options		$ 445,000
Percentage of performance conditions achieved	50.00%
Stock-based compensation expense					$ 222,000
Percentage of performance conditions not considered probable of achievement			50.00%

Reduction in force (Details)	1 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended
Reduction in force (Details)	Oct. 31, 2015 USD ($) employee	Mar. 31, 2016 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Reduction in force
Reduction of workforce (as a percent)	50.00%
Number of full time employees \| employee	20
Severance and related costs	$ 1,100,000
Severance paid		$ 521,000	$ 192,000	$ 349,000
Severance and related costs payable			$ 0

Nature of business	3 Months Ended
Nature of business	Mar. 31, 2017
Nature of business
Nature of business	Verastem, Inc. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Nature of business Verastem, Inc. (the Company) is a biopharmaceutical company focused on discovering and developing drugs to improve outcomes for patients with cancer. The Company’s operations to date have been limited to organizing and staffing the Company, business planning, raising capital, identifying and acquiring potential product candidates and undertaking preclinical and clinical studies of its product candidates. The Company is subject to a number of risks similar to other life science companies, including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, inability to obtain marketing approval of product candidates, competitors developing new technological innovations, market acceptance of the Company’s products and protection of proprietary technology. If the Company does not successfully commercialize any of its product candidates, it will be unable to generate product revenue or achieve profitability. As of March 31, 2017, the Company had cash, cash equivalents and investments of $72.6 million and accumulated deficit of $248.3 million. Although the Company has incurred recurring losses and expects to continue to incur losses for the foreseeable future, the Company expects its cash, cash equivalents and investments to be sufficient to fund its current operating plan for at least the next twelve months from the date of issuance of these condensed consolidated financial statements.

Subsequent events	3 Months Ended
Subsequent events	Mar. 31, 2017
Subsequent events.
Subsequent events	11. Subsequent events The Company reviews all activity subsequent to the end of the quarter but prior to issuance of the condensed consolidated financial statements for events that could require disclosure or that could impact the carrying value of assets or liabilities as of the balance sheet date. There are no material subsequent events to the three months ended March 31, 2017.

Nature of business (Details) - USD ($) $ in Thousands	3 Months Ended
Nature of business (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Nature of business
Cash, cash equivalents, and investments	$ 72,571	$ 80,897
Deficit accumulated during the development stage	$ 248,345	$ 235,323
Substantial doubt about the ability to continue as a going concern	false

Equity offerings (Details) $ in Millions	1 Months Ended
Equity offerings (Details) $ in Millions	Mar. 31, 2017 USD ($)
At The Market Equity Offering Program
At-the-market equity offering program
Maximum value of common stock allowed to be sold	$ 35.0

Fair value of financial instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Financial assets
Cash equivalents	$ 28,179	$ 32,349
Short-term investments	44,392	48,548
Recurring basis \| Total
Financial assets
Cash equivalents	26,240	30,540
Short-term investments	44,392	48,548
Total financial assets	70,632	79,088
Level 1 \| Recurring basis
Financial assets
Cash equivalents	21,240	20,540
Total financial assets	21,240	20,540
Level 2 \| Recurring basis
Financial assets
Cash equivalents	5,000	10,000
Short-term investments	44,392	48,548
Total financial assets	$ 49,392	$ 58,548

Net loss per share (Details) - shares	3 Months Ended
Net loss per share (Details) - shares	Mar. 31, 2017	Mar. 31, 2016
Net loss per share
Potentially anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	7,337,655	5,616,229
Outstanding stock options
Net loss per share
Potentially anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)	7,337,655	5,473,372
Outstanding warrants
Net loss per share
Potentially anti-dilutive securities excluded from calculation of diluted net loss per share (in shares)		142,857

Stock-based compensation - Restricted Stock (Details) - USD ($)	3 Months Ended	15 Months Ended
	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2013
Additional disclosures
Cash used to settle tax on restricted stock liability awards	$ 5,000
Restricted Stock Units
Additional disclosures
Fair value of shares vested	65,000
Unrecognized stock-based compensation expense	0
Granted (in shares)		0
Unvested RSUs with amended terms			697,060
Remaining tax liability relating to awards	$ 0