Infinity obtains global rights to Intellikine's portfolio of inhibitors of delta and gamma isoforms of PI3K

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Infinity Pharmaceuticals, Inc. (Nasdaq:INFI), an innovative drug discovery and development company, and Intellikine, Inc., a leader in the development of small molecule drugs targeting the PI3K/mTOR pathway, today announced an agreement under which Infinity obtained global development and commercialization rights to Intellikine's portfolio of inhibitors of the delta and gamma isoforms of phosphoinositide-3-kinase (PI3K). Among these inhibitors is INK1197, an orally available dual delta/gamma-specific inhibitor of PI3K for which clinical development in inflammatory diseases is expected to commence in 2011.

Under the terms of the agreement, Intellikine will receive $13.5 million in initial license payments, committed research funding over the first two years of the relationship to identify additional novel delta, gamma and dual delta/gamma-specific inhibitors of PI3K for future development, up to $25 million in success-based milestones for the development of two distinct product candidates, and up to $450 million in success-based milestones for the approval and commercialization of two distinct products. In addition, Intellikine will be entitled to receive royalties upon successful commercialization of products licensed to Infinity. For products directed primarily to oncology indications, Intellikine will have the option, at the end of Phase 2 clinical development and upon payment of an option fee, to convert its royalty interest in U.S. sales into the right to share in 50% of profits and losses on U.S. development and commercialization, and to participate in up to 30% of the detailing effort for these products in the United States.

The PI3Kdelta/gamma program licensed from Intellikine will be a part of Infinity's existing strategic alliance with Mundipharma International Corporation Ltd. and will be governed by the same terms as Infinity's internally-discovered programs. Such terms include Mundipharma's funding of Infinity's research and development expenses for the PI3K program through the later to occur of December 31, 2013 and the commencement of Phase 3 development, subject to aggregate funding caps across the partnered portfolio under a three-year rolling plan, and reimbursement of 50% of research and development expenses thereafter. In addition, Mundipharma will have commercialization rights outside of the United States to any successfully developed products, subject to the payment of royalties of up to 20% on net sales.

"This agreement is emblematic of Infinity's strategy to use our scientific expertise and financial strength to expand our portfolio of high-quality development programs in areas where there is a significant unmet medical need and for which Infinity is well positioned to reveal – and then realize – the potential of such programs. We expect to seek additional opportunities to broaden our portfolio of innovative product candidates in the future," said Adelene Q. Perkins, president and chief executive officer of Infinity. "We are excited to develop INK1197 in inflammation and to work closely with the Intellikine team to identify additional differentiated PI3Kdelta/gamma inhibitors for both inflammation and oncology," said Julian Adams, Ph.D., president of research and development at Infinity. "Targets such as PI3Kdelta and PI3Kgamma have broad applicability across inflammatory and oncology indications, creating many opportunities to make a meaningful impact for patients."

"Intellikine has rapidly assembled a leading pipeline of drug candidates against the PI3K/mTOR pathway," said Troy Wilson, Ph.D., J.D., president and chief executive officer of Intellikine. "We are excited to work with our colleagues at Infinity, who share our strong scientific culture and sense of urgency to advance this program forward. Additionally, this collaboration provides us with significant resources to advance our own TORC1/2 and PI3Kalpha drug candidates. The opportunity to co-develop and co-detail PI3Kdelta/gamma drug candidates in oncology with Infinity is a key component of our strategy to build an oncology business."

By virtue of the expansion of Infinity's portfolio to include the PI3Kdelta/gamma program, Infinity expects to exceed the $65 million cap for 2010 set forth in the research plan under the Mundipharma/Purdue Pharma alliance. As a result, Infinity now projects a 2010 cash burn of between $35 and $45 million and a year-end cash balance of between $85 and $95 million, not including amounts that may be drawn by Infinity under the $50 million line of credit available from Purdue. Infinity continues to expect that its current cash and investments, together with research and development funding from Mundipharma and Purdue and proceeds from the line of credit, are sufficient to fund the company's operations into 2013 and enable the company to reach key development milestones and evaluate additional external opportunities to strategically enhance its pipeline.