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Press Release.

Decision Demonstrates Strength of Alliance and Underscores Complementary Capabilities of the Partners

CAMBRIDGE, Mass., — Infinity Pharmaceuticals, Inc. (Nasdaq:INFI) today announced that Purdue Pharmaceutical Products L.P. and its independent associated company, Mundipharma International Corporation Ltd., have exercised their right to assume worldwide development and commercialization activities for Infinity’s fatty acid amide hydrolase, or FAAH, program. The decision reflects progress made in the development of Infinity’s oral FAAH inhibitor, IPI-940. Data from the Phase 1 single-dose study showed IPI-940 demonstrated favorable pharmacokinetics and was generally well tolerated in healthy volunteers. Purdue is planning to initiate Phase 2 studies of IPI-940 in 2011.

The enzyme FAAH degrades anandamide, an endogenous cannabinoid that mediates the body’s own powerful analgesic and anti-inflammatory responses. IPI-940 blocks the action of FAAH, thereby increasing the therapeutic action of anandamide. As a novel inhibitor of FAAH, IPI-940 has potential application for the treatment of a broad range of painful conditions and inflammatory diseases.

“Purdue is a world leader in the development and commercialization of therapeutics for the treatment of pain, and we are pleased that they will be advancing IPI-940 through later-stage clinical development and into the marketplace,”

stated Adelene Q. Perkins, president and chief executive officer of Infinity.

“Purdue has been a wonderful partner. Working together, we will continue to leverage our complementary capabilities to bring important medicines to patients in pain and inflammatory diseases.”

“FAAH is a promising therapeutic target for a wide variety of pain and inflammatory conditions, and we look forward to advancing IPI-940 into Phase 2 clinical development,”

stated John H. Stewart, President and CEO of Purdue.

“This program fits well within our comprehensive analgesic plan and is a valuable addition to our expanding drug pipeline.”

Phase 1 Single Dose Study of IPI-940
The Phase 1 randomized study of IPI-940 enrolled 48 healthy adult volunteers and assessed the pharmacokinetics, pharmacodynamics, safety and tolerability of IPI-940 following single oral administration at escalating dose levels. In the study, administration of IPI-940 resulted in marked FAAH inhibition and increased anandamide levels. In addition, IPI-940 was well tolerated, with no observed dose-limiting toxicities or clinically significant changes in clinical laboratory values, vital signs or electrocardiogram parameters. Additional Phase 1 development of IPI-940 is ongoing.

Financial Guidance
Infinity is completing certain development activities to enable Purdue to begin Phase 2 studies. As a result of reimbursement for activities associated with the transition of the FAAH program to Purdue, Infinity now anticipates a year-end cash and investments balance of $90-$100 million, revised from an earlier expectation of $85-95 million.

About FAAH and IPI-940
FAAH plays a role in the endocannabinoid system (ECS), which is made up of a group of enzymes and receptors shown to play an important role in modulating painful and inflammatory conditions affecting the central nervous system and the body as a whole. In response to painful stimuli or inflammation, the ECS is activated and endocannabinoids are produced. Many endocannabinoids are fatty acid amides (FAAs), which produce the body’s own powerful analgesic and anti-inflammatory responses. FAAH breaks down FAAs, rendering the beneficial effects of FAAs short-lived. It is believed that inhibition of FAAH may enable the body to bolster its own analgesic and anti-inflammatory response. IPI-940 blocks the action of FAAH, thereby increasing the duration of the analgesic effect of FAAs. As a novel inhibitor of FAAH, IPI-940 has potential application for the treatment of a broad range of painful conditions and inflammatory diseases.

About the Strategic Alliance with Purdue and Mundipharma
Infinity entered into a strategic alliance with Purdue and Mundipharma in 2008 to develop and commercialize pharmaceutical products. The alliance includes product candidates arising from Infinity’s Hedgehog pathway, FAAH, phosphoinositol-3-kinase and discovery programs. Under the terms of the alliance related to the FAAH program, Purdue and Mundipharma will continue to be responsible for fully funding the FAAH program and Infinity will be entitled to worldwide royalties on any successfully-developed products. In addition, Purdue and Mundipharma are funding all research and development costs of other programs within the strategic alliance. Infinity retains U.S. commercialization rights for these products and will receive royalties on any product sales outside the U.S.

About Infinity Pharmaceuticals, Inc.
Infinity is an innovative drug discovery and development company seeking to discover, develop, and deliver to patients best-in-class medicines for difficult-to-treat diseases. Infinity combines proven scientific expertise with a passion for developing novel small molecule drugs that target emerging disease pathways. Infinity’s programs in the inhibition of the Hsp90 chaperone system, the Hedgehog pathway, fatty acid amide hydrolase and phosphoinositide-3-kinase are evidence of its innovative approach to drug discovery and development. For more information on Infinity, please refer to the company’s website at www.infi.com.

Forward Looking Statements
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. Such forward-looking statements include statements regarding the pursuit of later-stage clinical development and commercialization of IPI-940 by Purdue and Mundipharma, the potential applicability of FAAH inhibitors in pain and inflammatory diseases, the commencement of Phase 2 clinical studies of IPI-940 in 2011, the receipt of royalties by Infinity on sales of products arising from the strategic alliance, and year-end cash guidance. Further, there can be no guarantee that any positive developments in Infinity’s product portfolio will result in stock price appreciation. In particular, management’s expectations could be affected by risks and uncertainties relating to: efforts by Purdue and Mundipharma to continue developing IPI-940, which are outside of Infnity’s control; results of clinical trials and preclinical studies, including subsequent analysis of existing data and new data received from ongoing and future studies; the content and timing of decisions made by the U.S. Food and Drug Administration and other regulatory authorities, investigational review boards at clinical trial sites; the ability to enroll patients in clinical trials of IPI-940; unplanned cash requirements and expenditures; and Infinity’s ability to obtain, maintain and enforce patent and other intellectual property protection for any product candidates it is developing. These and other risks which may impact management’s expectations are described in greater detail under the caption “Risk Factors” included in Infinity’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission on August 4, 2010. Further, any forward-looking statements contained in this press release speak only as of the date hereof, and Infinity expressly disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT:
Infinity Pharmaceuticals, Inc.
Jaren Irene Madden
617-453-1336
Jaren.Madden@infi.com

Press Release.

First Demonstration of Clinical Activity of IPI-926 Observed in Patients With Basal Cell Carcinoma

MILAN, Italy — Infinity Pharmaceuticals, Inc. (Nasdaq:INFI) today announced promising preliminary results from a Phase 1 study of IPI-926, its novel, oral small molecule that targets the Hedgehog pathway. In the study, IPI-926 was well tolerated and resulted in clinical activity in patients with basal cell carcinoma (BCC). These data demonstrate the ability of IPI-926 to inhibit the Hedgehog pathway, further supporting the Phase 1b/2 study of IPI-926 in combination with Gemzar® (gemcitabine) in patients with previously untreated, metastatic pancreatic cancer, which is enrolling patients. These data were described in a poster presentation at the European Society for Medical Oncology (ESMO) Congress in Milan, Italy.

“This study provides important information about the tolerability and anti-tumor activity of IPI-926 in patients with solid tumors and confirms our hypothesis that inhibition of the Hedgehog pathway may be an important new approach to treating the broad range of cancers in which this pathway is implicated,”

said Antonio Jimeno, M.D., Ph.D., Associate Professor, University of Colorado School of Medicine, and a lead investigator in this study.

“I look forward to further exploration of the clinical potential of IPI-926 in multiple indications.”

“We are encouraged by the clinical data of IPI-926 showing a pharmacokinetic profile that supports once daily dosing as well as activity in patients with basal cell carcinoma. We look forward to following the numerous patients who remain on study and reporting the full set of data in the future,”

stated Julian Adams, Ph.D., president of research and development at Infinity.

“Having demonstrated that IPI-926 has on-target activity against the Hedgehog pathway, these results further support our Phase 1b/2 trial in pancreatic cancer. We are currently evaluating additional indications in which to advance IPI-926.”

Trial Design and Results
The Phase 1 study of IPI-926 was designed as an open-label, dose-escalation study in patients with advanced and/or metastatic solid tumor malignancies. Patients received IPI-926 administered orally once-daily on 28 day cycles at doses ranging from 20 mg to 200 mg. In addition to the initial dose escalation phase, several expansion cohorts were enrolled at the 130 mg dose level, including a cohort of patients with locally advanced or metastatic BCC. Trial endpoints include safety and tolerability, pharmacokinetics, pharmacodynamics and anti-tumor activity. Further dose escalation in this study is ongoing to determine the maximum tolerated dose of IPI-926.

At the time of the data presentation, 60 patients have been enrolled, including 24 patients with BCC. IPI-926 has been well tolerated. The most common adverse events observed were Grade 1 and 2 fatigue and nausea. Grade 3 transaminitis was observed in four patients; however, all events of transaminitis were asymptomatic and reversible. No Grade 4 or 5 related AEs were observed. Steady state exposure to IPI-926 was achieved after three weeks on study, confirming the potential for once daily dosing.

In the BCC cohort, 17 patients were enrolled who were naïve to treatment with a Hedgehog pathway inhibitor. To date, four clinical partial responses have been observed in this group of patients. As the majority of patients with BCC have undergone treatment for less than 24 weeks, more time on study will be required to fully assess the clinical activity of IPI-926 in patients with BCC. Only one patient with BCC naïve to treatment with a Hedgehog pathway inhibitor has discontinued from the study due to progression of disease, and this patient was on trial for more than 18 months. Among patients with non-BCC solid tumors enrolled in the study, three patients have shown stable disease for at least six months.

Information regarding clinical trials for IPI-926, including participating clinical trial sites, is available at www.clinicaltrials.gov.

About the Hedgehog Pathway and IPI-926
Malignant activation of the Hedgehog pathway is responsible for a broad range of cancers through three distinct mechanisms: signaling to the tumor microenvironment, signaling to tumor progenitor cells, and genetic activation of the Hedgehog pathway in tumor cells. IPI-926 is a small molecule that inhibits Smoothened (Smo), a key component of the Hedgehog pathway. Smo inhibition represents a significant anti-cancer opportunity for addressing a number of difficult-to-treat cancers by disrupting malignant activation of the pathway.

IPI-926 is currently being evaluated in a Phase 1 study in solid tumors as well as a Phase 1b/2 study in combination with Gemzar® (gemcitabine) in patients with previously untreated, metastatic pancreatic cancer. These clinical trials build upon a robust set of supporting preclinical data that provide a strong rationale for evaluating the potential of IPI-926 for treatment of a broad range of cancers.

About Infinity Pharmaceuticals, Inc.
Infinity is an innovative drug discovery and development company seeking to discover, develop, and deliver to patients best-in-class medicines for difficult-to-treat diseases. Infinity combines proven scientific expertise with a passion for developing novel small molecule drugs that target emerging disease pathways. Infinity’s programs in the inhibition of the Hsp90 chaperone system, the Hedgehog pathway, fatty acid amide hydrolase and phosphoinositide-3-kinase are evidence of its innovative approach to drug discovery and development. For more information on Infinity, please refer to the company’s website at www.infi.com.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. Such forward-looking statements include those regarding the utility of Hedgehog pathway inhibition, the reporting of clinical data and the potential of IPI-926 to treat a broad range of cancers. Such statements are subject to numerous factors, risks and uncertainties that may cause actual events or results to differ materially from the company’s current expectations. For example, there can be no guarantee that IPI-926 will successfully complete necessary preclinical and clinical development phases or that Infinity’s strategic alliance with Mundipharma International Corporation Ltd. will continue for its expected term or that it will fund Infinity’s programs as agreed. Management’s expectations could also be affected by risks and uncertainties relating to: results of clinical trials and preclinical studies, including subsequent analysis of existing data and new data received from ongoing and future studies; the content and timing of decisions made by the U.S. Food and Drug Administration and other regulatory authorities, investigational review boards at clinical trial sites, and publication review bodies; Infinity’s ability to enroll patients in its clinical trials; unplanned cash requirements and expenditures, including in connection with business development activities; and Infinity’s ability to obtain, maintain and enforce patent and other intellectual property protection for any product candidates it is developing. These and other risks which may impact management’s expectations are described in greater detail under the caption “Risk Factors” included in Infinity’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission on August 4, 2010. Any forward-looking statements contained in this press release speak only as of the date hereof, and Infinity expressly disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Gemzar® is a registered trademark of Eli Lilly and Company.

CONTACT:
Infinity Pharmaceuticals, Inc.
Jaren Irene Madden
617-453-1336
Cell: 617-780-7432
Jaren.Madden@infi.com
http://www.infi.com