UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

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Infinity Pharmaceuticals, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Supplemental Materials in Support of

Equity Plan Proposal

May 2012

Reasons to Vote “FOR”

the Equity Plan

Proposal

1.

We have a strong track record of aligning executive pay with performance.

2.

We have a broad-based, options-only equity program that optimally aligns

compensation with shareholder return.  Moreover, our Citizen-Owners

have demonstrated their belief in the long-term success of our company by

holding their vested, in-the-money options.

3.

Our

burn

rate

from

options

is

well

below

ISS

thresholds,

as

well

as

the

more stringent commitment we made to our shareholders.

4.

We have been extremely successful in funding our clinical development

programs through vehicles other than dilutive equity financings.

This

success has the result of overstating the impact of options when

performing shareholder value transfer (SVT) and voting power dilution

analyses.

In

addition,

recent

appreciation

in

INFI

stock

is

not

reflected

in

ISS analyses.

5.

We do not anticipate requesting additional shares under our equity

incentive plan until at least our 2014 annual meeting.

2

INFI Aligns Pay with Performance and

Shareholder Value Creation

•

“Say on Pay”

proposal received 96% support at our 2011 annual meeting

•

We

score

a

“LOW”

level

of

concern

under

each

of

ISS’s

pay

for

performance tests:

–

Relative Degree of Alignment score of 32.4 –

TSR performance ranking has outpaced

our CEO pay ranking over the combined one and three year periods

–

Multiple of Median –

our CEO pay for the last year was approximately 0.8x of our peer

group median

–

Pay/TSR Alignment score of 4.6% --

TSR performance has trended higher than our

CEO compensation

•

We

have

a

“broad

based,”

“options-only”

equity

program

–

Over 76% of option grants are to non-NEOs –

a higher percentage of grants to non-

officers than our compensation peer group

–

Options-only approach better aligns compensation to shareholder return than does use

of less dilutive, “full value”

awards

Sources: Internal analysis using ISS Compass Model, 24 February 2012; Glass Lewis Proxy Paper, 22 April 2012

3

Our Citizen-Owners Share Our

Shareholders’

Long-Term Focus

Number

Weighted-Average

Exercise Price

Outstanding stock options

7,992,966

$8.36

Vested stock options

5,037,061

$9.08

Vested and in-the-money stock options

3,624,292

$7.15

Expected term of outstanding stock options

(using internal Black-Scholes valuation model)

6.1 years*

4

Our Citizen-Owners are focused on creating long-term value for shareholders.  This is manifest

in their practice of holding their vested, in-the-money stock options.  This practice has the result

of magnifying our “overhang”

from stock options.

Calculated as of 3/31/12.

* Our stock options generally vest over 4 years.

Our Burn Rate from Options Is Well Managed

ISS Burn Rate Cap –

GIC Code 3520

(Pharmaceuticals, Biotechnology & Life Sciences)

7.49%

INFI 3-year burn rate commitment made upon

approval of 2010 equity incentive plan

7.31%

INFI 1-year burn rate –

FY 2011

4.85%

INFI 3-year average burn rate –

FY 2009-11

4.72%

5

Our Track Record of Non-Dilutive Financing

Overstates the Impact of Stock Options

Date

Shares of INFI Stock Outstanding

December 31, 2011

26,721,739

December 31, 2009

26,238,954

Aggregate Shares Issued in FY 2010-11

482,785

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Fiscal Year

Non-Dilutive R&D

Funding from Alliance

Partner

Average Closing

Price Per Share

Share Dilution

Avoided

2011

$85,000,000

$7.06

~ 12 million

2010

$65,000,000

$6.11

~ 10.6 million

Total

$150,000,000

~ 22.6 million

Management’s strategy to avoid dilution while enabling robust R&D investment has provided

significant benefits to shareholders. Focusing solely on dilution from stock options could create a

perverse disincentive with respect to seeking non-dilutive sources of R&D financing in the future.

Recent INFI Stock Appreciation Not Reflected

in ISS Calculations Using 12/1/11 Data

7

INFI stock has

appreciated  > 45%

since the 12/1/11 

data download used

by ISS, and has

substantially

outpaced growth in

the NASDAQ Biotech

Index during this

period.  We believe

that this stock price

appreciation, if

considered, would

have a favorable 

impact on the results

of ISS’s SVT analysis.

Forward-Looking Statements

The foregoing 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 those expressed or implied by such forward-looking statements. These risks and uncertainties are

described in detail under the caption “Risk Factors”

included in our annual report on Form 10-K for the year ended

December 31, 2011, which we filed with the Securities and Exchange Commission on March 13, 2012. We expressly

disclaim any obligation to update any forward-looking statements, whether as a result of new information, future

events or otherwise.

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