Verastem, Inc.

Current report

As required under Accounting Standards Update 2014-15,Presentation of Financial Statements-Going Concern(ASC 205-40), we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet our future financial obligations as they become due within one year after the date the condensed consolidated financial statements are issued. We believe that we may have sufficient funds to meet its obligations within the next 12 months from the issuance of these financial statements. However, this belief relies on the achievement of certain mitigation efforts. The analysis under ASC 205-40, initially cannot take into consideration the potential mitigating effects of plans that have not been fully implemented as of the date the financial statements are issued. Additionally, we have had historical losses from operations and anticipate that we may continue to incur losses as we continue the commercialization of AVMAPKI FAKZYNJA CO-PACK and the research and development of our product candidates. Accordingly, these uncertainties and risk factors meet the ASC 205-40 standard for raising substantial doubt about our ability to continue as a going concern within one year of the issuance date of our condensed consolidated financial statements. Lack of necessary funds may require us, among other things, to delay, scale back, or eliminate some or all of our planned clinical trials. Because we continue to experience net operating losses (“NOL”), our ability to continue as a going concern is subject to our ability to obtain necessary capital from outside sources, including increasing our net product revenues, obtaining additional capital from the sale of our securities or assets, achieving milestones for additional drawdowns under our Note Purchase Agreement or obtain loans from financial institutions, or entering into additional partnership arrangements. There can be no assurances that we will be able to obtain such capital on favorable terms or at all. If we are unable to raise capital when needed, we may be forced to delay, reduce or eliminate our commercial efforts for AVMAPKI FAKZYNJA CO-PACK or our other research and development activities for our product candidates, or ultimately not be able to continue as a going concern.

Previous report

Recent health care reform initiatives focused on the cost of prescription drugs may have a material adverse effect on our business and results of operations.

Previous report

Under the current United States presidential administration, there have been significant and wide-ranging reforms to federal policy and the federal government. Drug pricing and reimbursement reform have been a particular area of focus. For example, President Trump issued an Executive Order in April 2025 with multiple directives aimed at lowering drug prices, including refining the Medicare drug price negotiation program established by the Inflation Reduction Act of 2022; accelerating competition for high-cost prescription drugs by accelerating approval of generics and biosimilars and facilitating the process for re-classifying prescription drugs as over-the-counter drugs; and increasing drug importation. As another example, in May 2025, President Trump issued another Executive Order that directed government agencies and officials to identify most-favored nation pricing targets for prescription drugs (and looked to pharmaceutical manufacturers to make significant progress towards delivering target prices to patients); prevent foreign countries from disproportionately shifting the cost of global pharmaceutical research and development to the United States; and facilitate direct-to-consumer purchasing programs for pharmaceutical manufacturers to sell their products to patients at the most-favored-nation price. Many of these reform initiatives would require additional legal and/or administrative action to implement which may be subject to legal challenge. Most recently, in the wake of the Executive

Previous report

Orders, some pharmaceutical manufacturers have announced direct-to-consumer offerings with discounted prices or reached agreement with the federal government regarding pricing for drugs, including prices for Medicaid drugs and newly launched products, federal agencies are reportedly developing new drug pricing pilot programs, and a future website operated by the federal government that is anticipated to redirect consumers to pharmaceutical companies’ direct-to-consumer channels has been announced.

Previous report

The implementation and impact of these or other prescription drug reform initiatives is uncertain. As a result, there can be no assurance that such reform will not have a significant adverse impact on our business.

Previous report

Due to the January 2025 change in presidential administration, we face substantial uncertainty regarding potential regulatory developments in the United States that may adversely affect our business.

Previous report

We face substantial uncertainty regarding the potential for changes in the regulatory environment in the United States following the change in presidential administration in January 2025. The new administration and federal government could adopt legislation, regulation or policies that adversely affect our business, including by making it more difficult to continue to market AVMAPKI FAKZYNJA CO-PACK or by creating a more challenging and costly environment to pursue the development and commercialization of our current or future product candidates. For example, the federal government, including the FDA, may implement legislative, regulatory or policy changes regarding the standards for approving pharmaceutical products that we may be unable to satisfy or changes regarding the marketing of approved pharmaceuticals that may limit or prohibit the advertising and promotion of AVMAPKI FAKZYNJA CO-PACK and, if approved, our current or future product candidates. The impending uncertainty could present new challenges or potential opportunities as we navigate the clinical development and approval process for our product candidates.

Previous report

Our sales and marketing efforts may not be successful or may be limited by future government policies or initiatives. For example, in September 2025, FDA stated that it intends to more aggressively enforce requirements for direct-to-consumer, or DTC, drug advertising and sent more than 100 warning or untitled letters to companies for allegedly deceptive prescription drug advertising. FDA also announced plans to expand its oversight of digital and social media advertising and to initiate a rulemaking that would call for drug companies to disclose additional safety information in DTC broadcast advertisements. The nature and extent of changes to FDA regulations and enforcement approach is unclear but may impact pharmaceutical marketing efforts industry-wide, including for Verastem, which could in turn impact our sales and operations.