DEF 14A of Ligand Pharmaceuticals Inc, Apr 25, 2024

DEF 14A of Ligand Pharmaceuticals Inc

Filed Apr 25, 2024 · FY20230000886163-24-000020

Open on EDGAR

  1. DIRECTOR NOMINEES

    DIRECTOR NOMINEES Please find a list of director nominees to our board of directors (the “Board”) below. The size of our Board is currently set at eight directors. We maintain a diverse Board, which represents a wide range of experience and perspectives important to enhance the Board's effectiveness in fulfilling its oversight role. Additional information for each nominee can be found under “Proposal No. 1: Election of Directors.”

  2. DIRECTOR NOMINEES

    | Name | Age* | Director Since | Professional Background | | Jason M. Aryeh (HC)(N) | 55 | 2006 | Founder and Managing General Partner of JALAA Equities, LP | | Todd C. Davis | 63 | 2007 | Chief Executive Officer of Ligand Pharmaceuticals Incorporated Co-Founder and Former Managing Partner of HealthCare Royalty Partners | | Nancy R. Gray, Ph.D.(A)(N) | 64 | 2017 | President and Chief Executive Officer of Gordon Research Conferences | | Jason Haas (A)(HC) | 56 | 2022 | Chief Financial Officer of Syros Pharmaceuticals Former Co-Head of Americas, Healthcare Investment Banking at Barclays | | John W. Kozarich, Ph.D. (N) | 74 | 2003 | Chief Executive Officer of Marsal Therapeutics Chairman of the Board of Curza Global, LLC Former Vice President for Merck Research Laboratories | | John L. LaMattina, Ph.D.(HC) | 74 | 2011 | Senior Partner and Board Member at PureTech Ventures Former President for Pfizer Global R&D | | Stephen L. Sabba, M.D. (A) | 64 | 2008 | Leading BioPharma Analyst and Fund Manager for Knott Partners, L.P. | | Martine Zimmermann, Pharm.D. (N) | 55 | 2023 | SVP, Head of Regulatory Affairs and R&D Quality at Ipsen Biopharmaceuticals |

  3. DIRECTOR NOMINEES

    * As of April 19, 2024. (A) Member of the audit committee (the “Audit Committee”). (HC) Member of the human capital management and compensation committee (the “Human Capital Management and Compensation Committee”). (N) Member of the nominating and corporate governance committee (the “Nominating and Corporate Governance Committee”).

  4. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS The persons named below have been nominated by the Board to serve as directors of our company until the 2025 annual meeting of stockholders and until their successors have been elected and qualified. As of the date of this proxy statement, the Board is not aware of any nominee who is unable to or will decline to serve as a director. If, however, any of those director nominees are unable to serve at the time of the annual meeting, the proxyholders may exercise discretionary authority to vote for substitutes.

  5. BUSINESS EXPERIENCE OF DIRECTOR NOMINEES

    BUSINESS EXPERIENCE OF DIRECTOR NOMINEES Jason M. Aryeh has served as a member of the Board since September 2006. Mr. Aryeh has more than twenty years of equity investment experience focused on the life sciences industry. He is the Founder and Managing General Partner of JALAA Equities, LP, a private investment fund focused on the biotechnology and medical device sectors. He has served in such capacity since 1997. Mr. Aryeh currently serves on the board of directors of Anebulo Pharmaceuticals, a publicly-traded biotechnology company as well as on the board of directors of Orchestra BioMed, a Nasdaq-traded life sciences company. Since 2006, Mr. Aryeh has served as chairman of the board, on the board of directors or as a consultant to many other public and private life sciences companies and charitable foundations, including the Novelion Therapeutics Inc. board from June 2012 to August 2018 and the Cystic Fibrosis Foundation’s Therapeutics board from February 2011 to February 2018. Mr. Aryeh also serves as chairman of the board of directors of Rio Grande Renewables, LLC, a renewable energy company he co-founded in 2009. Mr. Aryeh earned a B.A. in economics, with honors, from Colgate University, and is a member of the Omnicron Delta Epsilon Honor Society in economics. Mr. Aryeh’s experience in capital markets, including his service as managing general partner of a hedge fund focused on the life sciences sector, contributed to the Board’ conclusion that he should serve as a director of our Company. Todd C. Davis is our Chief Executive Officer, a position he has held since December 2022, and has served as a member of the Board since March 2007. Mr. Davis was the Founder and Managing Partner of RoyaltyRx Capital, a special opportunities investment firm founded in 2018. From 2006 until 2018, Mr. Davis was a Founder and Managing Partner of HealthCare Royalty Partners, a global healthcare investment firm which grew from zero to approximately $4 billion in capital commitments during his tenure. Previously, Mr. Davis served as a partner responsible for biopharmaceutical growth equity investments at Apax Partners. Mr. Davis began his business career in sales at Abbott Laboratories where he held several sales and marketing positions of increasing responsibility. Subsequently he led corporate development and held strategic planning and general management responsibilities at Elan Pharmaceuticals. Cumulatively he has over thirty years of experience in both operations and investing in the biopharmaceutical and life sciences industries. Mr. Davis has been involved in over $3 billion of healthcare financings including growth equity, public equity turnarounds, structured debt and royalty acquisitions. He has also led, structured and closed over 40 additional intellectual property licenses, as well as hybrid royalty-debt transactions. Mr. Davis is a navy combat veteran and holds a B.S. from the U.S. Naval Academy and an M.B.A. from Harvard University. Mr. Davis serves on the board of Chromocell Therapeutics, a public company. He currently also serves on the boards of Palvella Therapeutics Inc., ViroCell Biologics, and Benuvia Holdings, LLC – all privately held companies. He is a former board member of the Harvard Business School Healthcare Alumni Association. Mr. Davis’ extensive knowledge of our business, as well as his financial and accounting expertise and his service as a director of public and private companies contributed to the Board’ conclusion that he should serve as a director of our Company. Nancy R. Gray, Ph.D., has served as a member of the Board since August 2017. Dr. Gray has acted as the President and Chief Executive Officer of Gordon Research Conferences (“GRC”), a non-profit organization focused on organizing international scientific conferences, since 2003. In her capacity as CEO of the GRC, she is dedicated to social equality initiatives such as managing a diversity initiative that supports the attendance of over 250 U.S. underrepresented minority scientists at GRC each year and working with HBCUs (historically black colleges and universities) to recruit minority undergraduate students for summer internships at GRC. Dr. Gray currently serves on the board of Slater Technology Fund, an evergreen not-for-profit fund dedicated to supporting new venture development in Rhode Island. From December 1997 until August 2003 she served as the Director of Membership for the American Chemical Society. Prior to that, Dr. Gray worked as a Senior Research Scientist at Exxon/Mobil Research and Engineering, a subsidiary of Exxon Mobil Corporation focused on researching oil and gas. Dr. Gray is a Fellow of the Royal Society of Chemistry, a Fellow of the American Association for the Advancement of Science and a member of the American Chemical Society. She was a Research Fellow at the Foundation on Matter Institute for Atomic and Molecular Physics in Amsterdam, and completed the Harvard Executive Education Finance for Senior Executives program. She also has authored or co-authored numerous scientific articles. Dr. Gray received her B.S. in Chemistry from the University of Notre Dame in 1981 and her Ph.D. in Fuel Science from The Pennsylvania State University in 1985. Dr. Gray’s scientific background and knowledge of the biotechnology industry contributed to the Board’ conclusion that she should serve as a director of our Company. Jason Haas has served as a member of the Board since June 2022. Since October 2021, Mr. Haas has been the Chief Financial Officer of Syros Pharmaceuticals, a Nasdaq listed biotech company focused on developing oncology therapeutics. Prior to Syros, Mr. Haas spent over 25 years in healthcare investment banking where he executed many strategic transactions and supported companies through equity and debt financings, mergers and acquisitions, divestitures and spin-offs. From 2016 to October 2021, he served as Co-Head of Americas, Healthcare Investment Banking at Barclays. Previously, he served as Head of Americas Healthcare Investment Banking at Deutsche Bank from 2012 to June 2016. Prior to his role at Deutsche Bank, he was Managing Director of Healthcare Investment Banking at Goldman Sachs & Co. Mr. Haas holds an M.B.A. in Finance from Columbia Business School and an A.B. in International Relations and Economics from Colgate University. In selecting Mr. Haas to serve as a director, the Board considered, among other things, his valuable financial and accounting experience in the pharmaceutical and biotechnology industries. Our company also benefits from Mr. Haas’ healthcare investment banking background with respect to acquisitions, debt financings and equity financings.

  6. BUSINESS EXPERIENCE OF DIRECTOR NOMINEES

    John W. Kozarich, Ph.D., has served as a member of the Board since March 2003. Since November 2021, Dr. Kozarich has been Chief Executive Officer and Co-Founder of Marsal Therapeutics and since June 2022, Chief Executive Officer and Co-Founder of Paludatus Pharmaceuticals, LLC. Dr. Kozarich also serves as Adjunct Professor of Chemical Biology and Medicinal Chemistry at the University of Texas at Austin since September 2019. He has served on the board of directors of Curza Global, LLC, a biopharmaceutical company, since February 2019. Previously, Dr. Kozarich served at ActivX Biosciences as Chairman and President from 2004 through March 2017 and in other roles since February 2001. From 2004 through March 2017, he was also Chief Scientific Advisor of Kyorin Pharmaceutical Co. LTD (Tokyo). From 1992 to 2001, Dr. Kozarich was Vice President at Merck Research Laboratories and previously held professorships at the University of Maryland (1984-1994) and Yale University School of Medicine (1977-1984). He held key roles R&D roles at Alkermes and its IPO (1990-1992). Dr. Kozarich has also served as a director of Intec Pharma Ltd, Corium Intl, Novelion Therapeutics and Retrophin, Inc. He is also a recipient of the Distinguished Scientist Award from the San Diego Section of the American Chemical Society. Dr. Kozarich earned his B.S. in chemistry, summa cum laude, from Boston College, his Ph.D. in biological chemistry from the Massachusetts Institute of Technology and was an NIH Postdoctoral Fellow at Harvard. In selecting Dr. Kozarich to serve as a director, the Board considered, among other things, his valuable pharmaceutical and international experience, including his service at Merck Research Laboratories, which is part of one of the world’s largest pharmaceutical companies, and his service with ActivX Biosciences, Inc., Novelion Therapeutics Inc. and Corium Intl. Our Company also benefits from Dr. Kozarich’s financial and accounting experience in the pharmaceutical and biotechnology industries. John L. LaMattina, Ph.D., has served as a member of the Board since February 2011. He spent 30 years at Pfizer Inc. with his last position starting in 2004 as President, Pfizer Global R&D. Dr. LaMattina began his career at Pfizer as a medicinal chemist in 1977. During his career, he was appointed to various positions of increasing responsibility for Pfizer Central Research, including Vice President of U.S. Discovery Operations in 1993, Senior Vice President of Worldwide Discovery Operations in 1998 and Senior Vice President of Worldwide Development in 1999. Dr. LaMattina graduated with cum laude honors from Boston College with a B.S. in Chemistry. He received a Ph.D. from the University of New Hampshire in Organic Chemistry and subsequently was at Princeton University in the National Institutes of Health Postdoctoral Fellowship program. Dr. LaMattina is currently a senior partner and board member at PureTech Health, a publicly-traded biopharmaceutical company, and several privately-held biopharmaceutical companies. From 2013 until May 2020, Dr. LaMattina served on the board of directors of Zafgen, Inc., a publicly-traded biotechnology company, until its acquisition by Chondrial Therapeutics, Inc. and subsequent name change to Larimar Therapeutics, Inc. in 2020. Dr. LaMattina also serves on the scientific advisory board of Frequency Therapeutics, a publicly-traded biotechnology company. Dr. LaMattina is the author of three books that address the challenges facing the pharmaceutical industry, and is a contributing writer to Forbes.com. Dr. LaMattina’s scientific and strategic knowledge of the biopharmaceutical industry and his directorship of public and private biopharmaceutical companies contributed to the Board’ conclusion that he should serve as a director of our Company. Stephen L. Sabba, M.D., has served as a member of the Board since August 2008. Dr. Sabba has been a leading BioPharma Analyst and Fund Manager for Knott Partners, L.P., an investment fund company, since November 2006. Previously he was a Partner and Director of Research with Kilkenny Capital Management, a Chicago-based healthcare hedge fund. Prior to that, Dr. Sabba was Director of Research at Sturza’s Medical Research, and previously was a gastroenterologist and internist in private practice at Phelps Hospital in North Tarrytown, New York. He received his M.D. from the New York University School of Medicine, and completed a residency in internal medicine and a fellowship in gastroenterology at the Veterans Administration Medical Center in New York City. He earned a B.S. with honors at Cornell University. Dr. Sabba served as a member of the board of the directors for Novelion Therapeutics Inc., a leading Canadian biotech company from June 2012 to January 2020. Dr. Sabba’s experience in accounting and capital markets and deep knowledge of the biopharmaceutical industry, including his background as a medical doctor, contributed to the Board’ conclusion that he should serve as a director of our Company. Martine Zimmermann, PharmD, has served as a member of the Board since September 2023. Dr. Zimmermann has served as the Senior Vice President, Head of Regulatory Affairs and R&D Quality at Ipsen Biopharmaceuticals, a global biopharmaceutical company, since January 2023. Prior to Ipsen, Dr. Zimmermann spent 13 years at Alexion Pharma International where she held several positions including Senior Vice President and Head of Global Regulatory Affairs. She is an active member of several life-sciences trade associations and was a member of the board of directors of Caelum Biosciences from 2019 until its acquisition by AstraZeneca in 2021. She has been a board member of France-based Inventiva (Euronext Paris and Nasdaq: IVA) since 2021. Dr. Zimmermann received her Doctorate in Pharmacy (PharmD) with a specialty in immunology from the Louis Pasteur University, Strasbourg in France. Dr. Zimmermann’s experience and knowledge of global regulatory compliance in the biopharmaceutical industry and her directorship of a biopharmaceutical company contributed to the Board’ conclusion that she should serve as a director of our Company.

  7. COMPENSATION OF DIRECTORS

    COMPENSATION OF DIRECTORS

  8. DIRECTOR COMPENSATION TABLE

    DIRECTOR COMPENSATION TABLE The following table provides information related to the compensation of each of our non-employee directors for the fiscal year ended December 31, 2023 (“fiscal year 2023”). Todd C. Davis, our Chief Executive Officer, received no compensation for his service as a member of the Board for fiscal year 2023. Mr. Davis’ compensation is further described under the section titled “Executive Compensation and Other Information” below.

  9. DIRECTOR COMPENSATION TABLE

    | Name | Fees Paid in Cash | Stock Awards(1) | Option Awards(1) | Total | | Jason M. Aryeh | $67,596 | $84,234 | $187,371 | $339,201 | | Nancy R. Gray, Ph.D. | 65,096 | 84,234 | 187,371 | 336,701 | | Jason Haas | 75,096 | 84,234 | 187,371 | 346,701 | | John W. Kozarich, Ph.D. | 90,096 | 84,234 | 187,371 | 361,701 | | John L. LaMattina, Ph.D. | 57,596 | 84,234 | 187,371 | 329,201 | | Stephen L. Sabba, M.D. | 70,096 | 84,234 | 187,371 | 341,701 | | Martine Zimmermann, PharmD. | 37,511 | 134,998 | 295,363 | 467,872 |

  10. DIRECTOR COMPENSATION TABLE

    (1) Reflects the grant date fair value for stock and option awards granted to directors in 2023, calculated in accordance with FASB ASC Topic 718. The assumptions used to calculate the value of stock and option awards are set forth under Note 10 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024. As of December 31, 2023, our non-employee directors listed in the table above held outstanding stock awards and options, as follows:

  11. DIRECTOR COMPENSATION TABLE

    | Name | Number of Shares Underlying Outstanding Restricted Stock Units | Number of Shares Underlying Outstanding Stock Options | | Jason M. Aryeh | 1,142 | 37,599 | | Nancy R. Gray, Ph.D. | 1,142 | 29,702 | | Jason Haas | 3,142 | 15,599 | | John W. Kozarich, Ph.D. | 1,142 | 39,738 | | John L. LaMattina, Ph.D. | 1,142 | 37,599 | | Stephen L. Sabba, M.D. | 1,142 | 39,738 | | Martine Zimmermann, PharmD. | 2,285 | 11,345 |

  12. 2023 BUSINESS HIGHLIGHTS

    | OVERVIEW OF 2023 COMPENSATION PROGRAMS AND DECISIONS In line with our executive compensation program’s emphasis on pay for performance, compensation awarded to our named executive officers for 2023 reflected our financial results and overall compensation philosophy. | | | Base Salary Adjustments: | During 2023, Mr. Davis did not receive an increase in salary compared to his salary for 2022. In 2023, the salaries of Mr. Korenberg, Mr. Espinoza and Mr. Reardon increased by 2.0%, 9.0% and 5.1%, respectively, as compared to their salaries for 2022. | | Pay-for-Performance Annual Bonuses: | Our annual bonus program rewards our named executive officers based on company achievement of pre-established financial and strategic objectives. For 2023, our Company focused on key corporate objectives in the following areas: financial performance, business development and operations goals. The annual program is formulaic using pre-set goals. Based on corporate performance in these areas during 2023, our Human Capital Management and Compensation Committee determined that our named executive officers should be paid annual bonuses at 100% of targeted levels. | | Equity Emphasis on Performance-Based Equity Awards | Our Human Capital Management and Compensation Committee continued its practice of ensuring that a substantial portion of our named executive officers’ total compensation is awarded in the form of long-term equity incentive awards. During 2023, our named executive officers received the following annual awards granted in accordance with the weightings described below. •Stock Options – 40% of Total Target Equity Value: 40% of each named executive officer’s annual long-term equity incentive award was granted in the form of stock options, which we consider to be performance-based awards as they provide value to our executives only if our stock price increases. These stock options are subject to our standard four year vesting schedule. •Performance-Based Restricted Stock Units (“PSUs”) – 33% of Total Target Equity Value: i.33% of each named executive officer’s annual long-term equity incentive award was granted in the form of PSUs. The PSUs granted in 2023 were tied to two corporate goals with equal weightings: (i) relative total shareholder return (TSR) objectives and (ii) the addition of new programs to our partnered portfolio. ii.The Human Capital Management and Compensation Committee selected the foregoing performance measures because they represent two key performance metrics tied to our near-term and long-term business objectives and, with respect to the relative TSR objectives, are appropriately measured over the related period of time, thereby creating the clearest link between executive actions, corporate results and our continued long-term success. •Time-Based Restricted Stock Units (“RSUs”) – 27% of Total Target Equity Value: The remainder of the annual long-term equity incentive awards granted to our named executive officers was granted in the form of RSUs that are subject to our standard three year vesting schedule. |

  13. Role of Compensation Consultant

    Role of Compensation Consultant In 2023, the Human Capital Management and Compensation Committee retained Aon’s Talent Solutions practice, a division of Aon plc (“Aon”), a national executive compensation consulting firm, as its independent compensation consultant. During 2023, Aon provided the following services to the Human Capital Management and Compensation Committee: •Assisted in the formulation of the peer group used to determine executive compensation during 2023. •Advised regarding the determination of the key elements of the executive compensation program. •Advised regarding the market competitiveness of the director compensation program. Aon reports to and is accountable to the Human Capital Management and Compensation Committee, and may not conduct any other work for us without the authorization of the Human Capital Management and Compensation Committee. Aon did not provide any services to us in 2023 beyond its engagement as an advisor to the Human Capital Management and Compensation Committee on executive and director compensation matters. After review and consultation with Aon, the Human Capital Management and Compensation Committee has determined that Aon is independent and there is no conflict of interest resulting from retaining Aon currently or during the year ended December 31, 2023. In reaching these conclusions, the Human Capital Management and Compensation Committee considered the factors set forth in Exchange Act Rule 10C-1 and Nasdaq listing standards.

  14. Role of Comparable Company Information

    Role of Comparable Company Information In November 2022, the Human Capital Management and Compensation Committee worked with Aon to confirm a peer group of companies in the United States for which compensation information can be provided to the Human Capital Management and Compensation Committee. The peer group was not selected on the basis of executive compensation levels and reflects companies that are our peers in terms of our then current business model and stage of development, including the number of programs maintained by us and the importance of licensing to our business model. The selected companies in our peer group are companies that fall within a reasonable range of comparison factors and/or that we may compete with for executive talent. In addition to the criteria related to finding companies with similar business models and at a similar stage of development as Ligand. Given the significant shifts in our corporate strategy, the Human Capital Management and Compensation Committee and Aon undertook a complete review of the corporate profile and peer group construction process. Following that process, the revised peer criteria are as follows:

  15. Role of Comparable Company Information

    | Peer Group Selection Criteria | | •US-based commercial companies with an emphasis on companies with a product on the market. | | •Revenues ranging from $50 million to $400 million. Ligand’s trailing 12-month revenues (post-OmniAb spinoff) as of November 2022 (approximately $135 million), when the peer group was selected, approximated the 32nd percentile of the selected peers. | | •Market values between $350 million and $3.5 billion (based on trading values in November 2022 when the peer group was selected). Ligand’s market capitalization in November 2022 (approximately $1.1 billion), when the peer group was selected, approximated the 45th percentile of the selected peers. | | •Companies with a headcount generally below 250 employees. |

  16. Role of Comparable Company Information

    Based on the criteria identified above, the Human Capital Management and Compensation Committee elected to remove Berkeley Lights, Codexis, Halozyme Therapeutics, Nektar Therapeutics, Pacira BioSciences, PTC Therapeutics, Schrödinger, Supernus Pharmaceuticals, Twist Bioscience, and Ultragenyx Pharmaceutical from the 2023 peer group since their trailing 12-month revenues, market capitalizations and/or headcount were positioned outside of the peer group selection criteria. The Human Capital Management and Compensation Committee added Axsome Therapeutics, Catalyst Pharmaceuticals, Collegium Pharmaceutical, Deciphera Pharmaceuticals, Intercept Pharmaceuticals, Rhythm Pharmaceuticals, Theravance Biopharma, Travere Therapeutics, Vanda Pharmaceuticals, and Vericel as new peers due to their alignment with the peer group selection criteria. The peer group companies for 2023 compensation was comprised of the following companies:

  17. Role of Comparable Company Information

    The peer group compensation data is limited to publicly available information and therefore does not provide precise comparisons by position as offered by more comprehensive survey data. The pool of senior executive talent from which we draw and against which we compare ourselves extends beyond the limited community of our immediate peer group and includes a wide range of other organizations outside of our traditional competitors, which range is represented by such surveys. As a result, the Human Capital Management and Compensation Committee uses peer group data to analyze the overall competitiveness of our compensation with our direct publicly traded peers in the United States and our general compensation philosophy, and to determine equity award levels for the named executive officers, but also relies on industry survey data in determining actual executive compensation. For 2023, Aon also provided the Human Capital Management and Compensation Committee with data compiled from a custom cut of companies in the Aon Global Life Sciences Survey, consisting of comparable U.S. public biotechnology companies with revenues ranging from $50 million to $400 million and market capitalization between $350 million and $3.5 billion as of the date the survey data was compiled. This survey data is used to provide pooled compensation data for positions closely akin to those held by each named executive officer. For purposes of this compensation discussion and analysis, references to our “peer group” include both the peer group of companies listed above and the survey data reviewed by our Human Capital Management and Compensation Committee. With respect to the foregoing survey data, the identities of the individual companies included in the surveys were not provided to the Human Capital Management and Compensation Committee, and the Human Capital Management and Compensation Committee did not refer to individual compensation information for such companies. Instead, the Human Capital Management and Compensation Committee only referred to the statistical summaries of the compensation information for the companies included in such surveys.

  18. Annual Performance-Based Cash Compensation

    Annual Performance-Based Cash Compensation It is the Human Capital Management and Compensation Committee’s objective to have a substantial portion of each named executive officer’s compensation contingent upon company performance. Our annual performance-based bonus program provides for cash bonus payments tied to achievement of key annual corporate performance objectives established by the Board for such purpose. Our annual performance-based bonus program is intended to complement our long-term equity program, which more directly aligns realized executive compensation with longer-term share price and corporate objectives.

  19. Target Annual Bonus Opportunities

    Target Annual Bonus Opportunities The target incentive opportunities for our named executive officers for 2023 are set forth in the table below. Each executive’s annual bonus is tied 100% to corporate performance. The target incentive opportunities for our named executive officers remain unchanged from 2022, other than for Mr. Davis who was not eligible for a 2022 annual bonus.

  20. Target Annual Bonus Opportunities

    | Name | 2023 Target Bonus (as a % of Base Salary) | | Todd C. Davis | 60% | | Matthew Korenberg | 50% | | Tavo Espinoza | 40% | | Andrew Reardon | 40% |

  21. 2023 Corporate Performance Objectives and Achievements

    2023 Corporate Performance Objectives and Achievements At the beginning of each year, the Board sets corporate objectives for the year in a number of areas after considering management input and our overall strategic objectives. Following the conclusion of each year, the Human Capital Management and Compensation Committee assesses the level of achievement relative to these corporate objectives. This achievement level is then applied to each named executive officer’s target bonus to determine that year’s total annual bonus. The Human Capital Management and Compensation Committee retains the discretion to reduce the final bonus payout to a named executive officer based on other factors deemed relevant to assessing the company’s performance in comparison to its peers and the industry. In January 2023, the Human Capital Management and Compensation Committee and the Board approved the performance objectives for the 2023 annual bonus program. The metrics were established after careful consideration of key short-term corporate goals.

  22. 2023 Corporate Performance Objectives and Achievements

    (1) Adjusted EBITDA for annual bonus plan purposes is a non-GAAP measure and is generally calculated as our earnings before interest, taxes, depreciation, amortization and other non-recurring expenses. In evaluating management’s performance against our 2023 corporate objectives in January 2024, our Human Capital Management and Compensation Committee assessed performance relative to the predefined goals to be in line with the targeted levels of performance anticipated by the Board when such objectives were first established. In addition, our Human Capital Management and Compensation Committee considered our business achievements in 2023 as discussed above under “2023 Business Highlights.” With the performance against the pre-established goals, our Human Capital Management and Compensation Committee determined to payout annual bonuses to the executives at 100% of target.

  23. 2023 Annual Bonus Determinations

    2023 Annual Bonus Determinations

  24. 2023 Annual Bonus Determinations

    | Name | Base Salary | Target Bonus (as % of base salary) | Corporate Performance Achievement % | Total 2023 Annual Bonus(1) | | Todd Davis | $650,000 | 60% | 100% | $390,000 | | Matthew Korenberg | 550,800 | 50% | 100% | 274,956 | | Tavo Espinoza | 436,000 | 40% | 100% | 173,202 | | Andrew Reardon | 436,000 | 40% | 100% | 173,705 |

  25. 2023 Annual Bonus Determinations

    (1) Annual bonus amounts were calculated based on the actual salary earned during 2023 for the executives.

  26. Long-Term Performance-Based Equity Incentive Program

    Long-Term Performance-Based Equity Incentive Program Our long-term performance-based compensation is designed to link the ultimate level of an executive officer’s compensation to our stock price performance and long-term stockholder interests while creating an incentive for sustained growth. All equity awards granted in 2023 for our executive officers were granted under our 2002 Plan.

  27. Equity Vehicles

    Equity Vehicles We provide equity compensation to our named executive officers through grants of stock options, RSUs and PSUs. For 2023 annual award purposes, these equity vehicles were weighted at 40%, 33% and 27%, respectively. •Time-based stock options granted to our named executive officers generally have a four-year vesting schedule designed to provide an incentive for continued employment, with a six-month vesting cliff and vesting in equal monthly increments thereafter. Options have a ten-year term and an exercise price equal to 100% of the fair market value of the underlying stock on the date of grant. Accordingly, options will provide a return to the executive officer only if the market price of the shares appreciates over the option term. •Time-based restricted stock units generally vest in equal annual installments over three years. •Performance stock units are a significant component of our annual long-term equity incentive awards for our named executive officers that vest based on key corporate and financial objectives over multi-year performance periods. At the time of grant, our Human Capital Management and Compensation Committee conducts a review of the performance measures and associated payout levels, the rigor of the performance goals and their alignment with performance. Our PSUs are structured with two staggered performance periods to provide our Human Capital Management and Compensation Committee the ability to design performance objectives that are tailored to specifically drive long-term stockholder value creation over varying time horizons. This staggered performance period design results in PSUs from two awards vesting each year and facilitates more diversity in performance objectives. The Human Capital Management and Compensation Committee views granting equity awards as both a valuable retention device and a means to effectively align the interests of our named executive officers with our long-term objectives and stockholder interests. In line with the retention benefits of our equity awards, the Human Capital Management and Compensation Committee therefore also reviews the status of vesting and number of vested versus unvested awards at the time of grant. Guidelines for the number of equity awards granted to each executive officer are determined using a procedure approved by the Human Capital Management and Compensation Committee based upon several factors, including the executive officer’s level of responsibility, salary grade, performance and the value of the equity awards at the time of grant. We emphasize long-term equity incentive compensation within our named executive officers' total target compensation opportunity. While we do not set target equity compensation at a specific level relative to our peer group, annual target equity opportunities may exceed the median of executive officers performing similar job functions at companies in our peer group if the Human Capital Management and Compensation Committee believes that is appropriate based on its review of the foregoing factors and each executive's other compensation and individual executive officer performance.

  28. 2023 Annual Awards

    | Name | Total Stock Option Target Value (40%) | Number of Stock Options Granted(1) | Total RSU Target Value (27%) | Number of RSUs Granted(2) | Total PSU Target Value (33%) | Number of PSUs Granted (at Target)(2) | | Todd Davis | $1,800,000 | 46,178 | $1,215,000 | 17,005 | $1,485,000 | 20,783 | | Matthew Korenberg | 960,000 | 24,628 | 648,000 | 9,069 | 792,000 | 11,085 | | Tavo Espinoza | 640,000 | 16,419 | 432,000 | 6,046 | 528,000 | 7,390 | | Andrew Reardon | 600,000 | 15,393 | 405,000 | 5,668 | 495,000 | 6,928 |

  29. 2023 Annual Awards

    (1) The actual number of options awarded was calculated using the Black-Scholes option pricing model (utilizing the same assumptions that we utilize in the preparation of our financial statements). (2) The actual number of RSUs and PSUs awarded is calculated by dividing (a) the target grant value of the RSU award, by (b) the average closing price per share of our common stock on the Nasdaq Global Market (or such other established stock exchange or national quotation system on which the stock is quoted) for the 30-calendar day period through and including February 23, 2023. The annual time-based stock options and RSUs granted to our named executive officers and reflected in the table above vest in accordance with the standard vesting schedules described above. The PSUs granted by our Human Capital Management and Compensation Committee in 2023 (the “2023 PSUs”) were divided into two equally weighted components: one subject to relative TSR goals through December 31, 2025 and one tied to the number of new programs, in phase 1 development or later, added to Ligand’s partnered portfolio combined over a two year period, ending December 31, 2024. Our Human Capital Management and Compensation Committee selected these performance measures in order to drive the key behaviors that reinforce and align pay with stockholder returns. Threshold, target and maximum performance levels for both components of the 2023 PSUs were established, as described below. The Human Capital Management and Compensation Committee selected the foregoing performance measures because they represent the key financial and operational performance metrics for which the executives are responsible as well as align with stockholders’ interests, thereby creating the clearest link between executive actions, corporate results and our continued long-term success. TSR Component. The performance-based vesting requirement for the TSR component of the 2023 PSUs is based on the percentile level of Ligand’s TSR for a period of approximately three years, starting January 1, 2023, relative to the members of the NASDAQ Biotechnology Index. The NASDAQ Biotechnology Index was selected for comparison because it enables our Human Capital Management and Compensation Committee to assess our performance against an objective peer group.

  30. 2023 Annual Awards

    Performance between achievement levels will be determined by linear interpolation. Except as described below, to receive the earned shares, an executive officer must generally remain employed with us through the last day of the applicable performance period. New Program Component. The performance-based vesting requirement for the new program component of the 2023 PSUs is based on the number of new programs, in phase 1 development or later, added to Ligand’s partnered portfolio combined over a two year period, ending December 31, 2024.

  31. SEVERANCE AND CHANGE IN CONTROL ARRANGEMENTS

    SEVERANCE AND CHANGE IN CONTROL ARRANGEMENTS We believe that reasonable severance benefits for our named executive officers are important because it may be difficult for our executive officers to find comparable employment within a short period of time following an involuntary termination of employment. We also believe that it is important to protect our named executive officers in the event of a change in control transaction involving us. In addition, it is our belief that the interests of stockholders will be best served if the interests of our senior management are aligned with them, and providing change in control severance benefits should eliminate, or at least reduce, the reluctance of senior management to pursue potential change in control transactions that may be in the best interests of stockholders. Accordingly, the severance arrangements we have entered into with each of our named executive officers provide for severance benefits in specified circumstances, as well as benefits in connection with an involuntary termination following a change in control.

  32. Severance Agreement with Todd C. Davis

    Severance Agreement with Todd C. Davis We entered into a severance agreement with Mr. Davis in connection with his appointment as our Chief Executive Officer. In the event Mr. Davis’ employment is terminated by us without cause or he resigns for good reason prior to a change in control of the Company or more than 24 months following a change in control of the Company, he will be eligible to receive a severance benefit equal to: •eighteen months of his base salary at the rate in effect at the time of involuntary termination; plus •eighteen multiplied by the monthly premium he would be required to pay for continued health coverage for himself and his eligible dependents. In the event Mr. Davis’ employment is terminated by us without cause or he resigns for good reason within 24 months following a change in control of our company, he will be eligible to receive a severance benefit equal to: •two times the annual rate of base salary in effect at the time of involuntary termination; plus •two times the greater of: (a) the maximum target bonus for the fiscal year in which the termination occurs; or (b) the maximum target bonus for the fiscal year in which the change in control occurs, if different; plus •twenty-four multiplied by the monthly premium the executive would be required to pay for continued health coverage for himself and his eligible dependents. The foregoing severance amounts will be payable in a lump sum following Mr. Davis’ termination of employment, subject to his execution of a general release of claims acceptable to us. The severance agreement also provides that in the event Mr. Davis’ employment is terminated by us without cause or he resigns for good reason, all of Mr. Davis’ outstanding stock awards will vest in the event of such involuntary termination (provided that the acceleration of performance-based awards will be governed by the applicable award agreements). In addition, the post-termination exercise period of Mr. Davis’ stock options will be extended from three months to the date that is 24 months following the date of termination (but in no event beyond the original expiration date of such options), subject to his agreement to certain restrictions on the transfer of shares of the Company’s common stock held by him. For purposes of the severance agreement, an involuntary termination is either a termination of Mr. Davis’ employment by us without cause or his resignation for good reason. “Cause” is generally defined as Mr. Davis’ conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state thereof, his willful and material breach of any obligation or duty under the employment agreement, any confidentiality and proprietary rights agreement or any written employment or other written policies that have previously been furnished to him, which breach is not cured within 30 days after written notice thereof is received by him, if such breach is capable of cure, Mr. Davis’ gross negligence or willful misconduct, including without limitation, fraud, dishonesty or embezzlement, in the performance of his duties, or his continuing failure or refusal to perform his assigned duties or to comply with reasonable directives of the Board that are consistent with his job duties (which directives are not in conflict with applicable law), which failure is not cured within 30 days after written notice thereof is received by him. For purposes of the Mr. Davis severance agreement, “good reason” is generally defined as a material diminution in the officer’s authority, duties or responsibilities, a material diminution in the officer’s base compensation, a material change in the geographic location at which the officer must perform his duties, or any other action or inaction that constitutes a material breach by us or any successor or affiliate of its obligations to the officer under the employment agreement. An officer must provide written notice to us of the occurrence of any of the foregoing events or conditions without his written consent within 90 days of the occurrence of such event. We will have a period of 30 days to cure such event or condition after receipt of written notice of such event from the officer. Any voluntary termination of an officer’s employment for “good reason” must occur no later than the date that is six months following the initial occurrence of one of the foregoing events or conditions. For purposes of Mr. Davis’ severance agreement, a “change in control” has generally the same definition as given to such term under our 2002 Plan, as described below.

  33. Change in Control Arrangements

    Change in Control Arrangements In addition to our agreement with Mr. Davis, we have change in control severance agreements with our other named executive officers. In the event a named executive officer’s employment is terminated by us without cause or he or she resigns for good reason within 24 months following a change in control of our company, he or she will be eligible to receive a severance benefit equal to: •one times the annual rate of base salary in effect for such officer at the time of involuntary termination; plus •one times the greater of: (a) the maximum target bonus for the fiscal year in which the termination occurs; or (b) the maximum target bonus for the fiscal year in which the change in control occurs, if different; plus •twelve multiplied by the monthly premium the executive would be required to pay for continued health coverage for himself or herself and his or her eligible dependents. The foregoing severance amounts will be payable in a lump sum following the officer’s termination of employment, subject to the officer’s execution of a general release of claims acceptable to us. The change in control severance agreements also provide that all of the participating named executive officer’s outstanding stock awards will vest in the event of such a termination (provided that the acceleration of performance-based awards will be governed by the applicable award agreements). In addition, the post-termination exercise period of a named executive officer’s stock options will be extended from three months to the date that is nine months following the date of termination, unless a longer date is specified in the relevant grant agreement (but in no event beyond the original expiration date of such options). For purposes of the change in control severance agreements, an involuntary termination is either a termination of a named executive officer’s employment by us without cause or his resignation for good reason. “Cause” and “good reason” have the same definitions as given to such terms under Mr. Davis’ separation agreement described above. For purposes of the change in control severance agreements, a “change in control” has generally the same definition as given to such term under our 2002 Plan, as described below.

  34. Severance Plan

    Severance Plan We maintain the Ligand Pharmaceuticals Incorporated Severance Plan to provide severance payments to our employees and the employees of our subsidiaries upon an involuntary termination of employment without cause. Each of the named executive officers (other than Mr. Davis) is eligible to participate in the severance plan, provided that he or she is not subject to disciplinary action or a formal performance improvement plan at the time of termination. However, if, as a result of his or her involuntary termination by us without “cause,” a named executive officer would be eligible to receive severance under any individual change in control severance agreement, employment agreement or other arrangement providing severance benefits, as approved by the Board or a committee thereof, such named executive officer will not be eligible for benefits under the severance plan. Under the terms of the severance plan, a named executive officer will be eligible to receive (1) a lump sum payment in cash for his fully earned but unpaid base salary and accrued but unused vacation through the date of termination, (2) an amount equal to his base salary for the severance period, which period will be equal to (a) two months plus (b) one week for each year of service as of the date of termination and (c) continued health coverage at the same cost as was in effect for the named executive officer at the date of termination throughout such severance period, provided that such named executive officer elects continued coverage under COBRA. The foregoing cash severance benefit will be payable in a lump sum following the officer’s termination of employment, subject to the officer’s execution of a general release of claims acceptable to us. For purposes of the severance plan, “cause” is generally defined as an officer’s conviction of (or entry of a plea of no contest to) any felony or any other criminal act, an officer’s commission of any act of fraud or embezzlement, an officer’s unauthorized use or disclosure of our confidential or proprietary information or trade secrets, an officer’s commission of any material violation of our policies, or an officer’s commission of any other intentional misconduct which adversely affects our business or affairs in a material manner.

  35. Change in Control Acceleration of Equity Awards

    Change in Control Acceleration of Equity Awards In the event outstanding awards under our 2002 Plan or our Inducement Plan are not assumed or replaced with a comparable award or cash incentive program in connection with any such merger or asset sale, or change in ownership or control, such awards shall vest in full, unless such accelerated vesting is precluded by a limitation set forth in the applicable award agreement. In the event the equity is assumed or replaced, the severance agreement or change in control severance agreement in place with each name executive officer and the terms of the relevant grant documents would apply. Under the 2002 Plan, a “change in control” is generally defined as: •a merger, consolidation or reorganization of our company in which 50% or more of our voting securities change ownership; •the sale, transfer or other disposition of all or substantially all of our assets in complete liquidation or dissolution of our company; or •a change in control of our company effected through a successful tender offer for more than 50% of our outstanding common stock or through a change in the majority of the Board as a result of one or more contested elections for board membership. In addition, the PSUs granted to the named executive officers in 2022 and 2023 contain additional vesting provisions that will apply in the event of a change in control. In the event of a change in control prior to the end of both of the applicable performance periods under the PSUs, the number of PSUs in which a named executive will be eligible to vest under each PSU will be set at the “target” number of units (as set forth in the applicable grant document), which “target” PSUs will continue to be eligible to vest based solely on the participant’s continued employment or service, with 50% of such “target” PSUs vesting on the last day of the first performance period and 50% of such “target” PSUs vesting on the last day of the second performance period. In the event of a change in control after the completion of the first performance period but prior to the completion of the second performance period, the remaining number of PSUs in which a participant will be eligible to vest under each PSU will be set at 50% of the “target” number of PSUs, which “target” PSUs will continue to be eligible to vest based solely on the participant’s continued employment or service through the last day of the second performance period.

  36. RISK ASSESSMENT OF COMPENSATION POLICIES AND PROGRAMS

    RISK ASSESSMENT OF COMPENSATION POLICIES AND PROGRAMS Management annually assesses, including by periodically engaging external consultants like AON, our compensation policies and programs for all employees for purposes of determining the enterprise risks faced by us in connection with such policies and programs and presents its assessment to our Human Capital Management and Compensation Committee. Based on these assessments, management has concluded, and the Human Capital Management and Compensation Committee has agreed, that none of our compensation policies or programs create risks that are reasonably likely to have a material adverse effect on us. In connection with their review, management and the Human Capital Management and Compensation Committee noted certain key attributes of our compensation policies and programs that help to reduce the likelihood of excessive risk taking, including: •The program design provides a balanced mix of cash and equity compensation, fixed and variable compensation and annual and long-term incentives. •Corporate performance objectives are designed to be consistent with our overall business plan and strategy, as approved by the Board. •The determination of executive incentive awards is based on a review of a variety of indicators of performance, reducing the risk associated with any single indicator of performance. •Our equity awards generally vest over multi-year periods. •The Human Capital Management and Compensation Committee has the right to exercise negative discretion over executive annual incentive plan payments.

  37. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE The following table provides information regarding the compensation earned by our named executive officers during the fiscal years ended December 31, 2023, 2022 and 2021.

  38. SUMMARY COMPENSATION TABLE

    | Name and Principal Position | Year | Salary | Stock Awards(1) | Option Awards(1) | Non-Equity Incentive Plan Compensation(2) | All Other Compensation(3) | Total | | Todd C. Davis(4) | 2023 | $650,007 | $3,378,456 | $1,788,095 | $390,000 | $9,960 | $6,216,518 | | Chief Executive Officer | 2022 | 49,243 | 79,607 | 5,001,298 | — | 65,021 | 5,195,169 | | Matthew Korenberg | 2023 | 549,912 | 1,801,880 | 953,640 | 274,956 | 6,900 | 3,587,288 | | President and Chief Operating Officer | 2022 | 519,858 | 2,691,809 | 3,089,749 | 234,229 | 6,900 | 6,542,545 | | | 2021 | 497,297 | 4,890,114 | 1,082,118 | 248,649 | 7,300 | 6,725,479 | | Tavo Espinoza | 2023 | 433,005 | 1,201,271 | 635,773 | 173,202 | 7,380 | 2,450,631 | | Chief Financial Officer | 2022 | 330,097 | 1,385,048 | 1,430,012 | 119,715 | 7,380 | 3,272,252 | | Andrew Reardon | 2023 | 434,262 | 1,126,169 | 596,045 | 173,705 | 6,900 | 2,337,081 | | Chief Legal Officer and Secretary | 2022 | 172,917 | 1,023,470 | 1,746,108 | 62,250 | 2,909 | 3,007,654 |

  39. SUMMARY COMPENSATION TABLE

    (1) Reflects the grant date fair value for stock and option awards granted in 2021, 2022 and 2023, calculated in accordance with FASB ASC Topic 718, Compensation - Stock Compensation, (“Topic 718”). The assumptions used to calculate the value of stock and option awards are set forth under Note 10 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024. For Mr. Davis, also includes the grant date fair value for stock and option awards granted to him in 2022 for his service as a member of the Board prior to his appointment as our Chief Executive Officer effective December 5, 2022 in the amount of $79,607 and $251,449, respectively. With respect to the PSU awards included in the Summary Compensation Table, these amounts include the grant date fair value of such PSUs granted to each of the named executive officers based on the estimated probable outcome of the performance based objectives applicable to such awards on the grant date. With respect to the PSUs granted in 2021, the number of PSUs that were eligible to vest was determined based on the measurement of two equally weighted metrics, the initiation of partnered OmniAb antibody programs over a two-year performance period measured from January 1, 2021 and Ligand’s relative TSR ranked on a percentile basis against the NASDAQ Biotechnology Index over a three-year performance period measured from January 1, 2021. The grant date fair value of the PSUs granted during 2021 included in this column that were tied to the initiation of partnered OmniAb antibody programs was calculated based on the probable achievement of the performance goals as determined at the date of grant, which was determined to be the target level of performance. The grant date fair value of the PSUs that were tied to relative TSR was calculated using the Monte Carlo simulation which utilizes the stock volatility, dividend yield and market correlation of the Company and the NASDAQ Biotechnology Index. For the PSUs granted during 2021, such inputs consisted of: (a) an expected term that was based on the actual 2.9 year term of the award; (b) a risk-free interest rate of 0.18% derived from the yield on U.S. government bonds of appropriate term from the U.S. Department of Treasury; (c) a dividend yield of 0.0% based on historic and future dividend yield estimates; (d) stock price volatility of 52.56% based on an analysis of the historical stock price volatility of Ligand and each company in the NASDAQ Biotechnology Index over the three years prior to the date of grant to conform to the term of the awards; and (e) initial TSR performance of 84.38% based on actual historical TSR performance for Ligand and each company in the NASDAQ Biotechnology Index. Based on this methodology, the valuation of the PSUs tied to relative TSR performance granted during 2021 was 176.27% of the closing price of Ligand common stock on the date of grant. The highest level of performance that was able to be achieved for the PSUs was 200% of the target. The full grant date fair value of the PSUs awarded to Mr. Korenberg, our only named executive officer who received such awards during fiscal year 2021, assuming maximum achievement of the applicable performance objectives, was $4,462,197. The 2021 PSUs granted to our named executive officers were initially eligible to vest based, in part, on the percentile level of Ligand’s TSR for the three-year performance period from January 1, 2021 through December 31, 2023, relative to the members of the NASDAQ Biotechnology Index. In October 2022, in anticipation of the OmniAb spin-off, the Human Capital Management and Compensation Committee certified that the portion of the 2021 PSUs tied to Ligand’s TSR was achieved at 168% and such earned PSUs were converted into time-based Ligand RSUs that vested on December 31, 2023, subject to continued employment through each applicable vesting date. With respect to the PSUs granted by Ligand in 2022, the number of PSUs that were eligible to vest were determined based on the measurement of two equally weighted metrics, the completion of the OmniAb spin-off during the period from July 2022 and ending at the earlier of the spin-off date or March 23, 2023, and the achievement of certain combined TSR goals of Ligand and OmniAb relative to the NASDAQ Biotechnology Index during a period of approximately two years following the close of the OmniAb spin-off. The grant date fair value of the PSUs granted during 2022 included in this column that are tied to the calendar quarter during which the completion of the OmniAb spin-off occurred was calculated based on the probable achievement of the performance goals as determined at the date of grant, which was determined to be the target level of performance. The grant date fair value of the PSUs that are tied to relative TSR was calculated using the Monte Carlo simulation which utilizes the stock volatility, dividend yield and market correlation of Ligand, OmniAb and the NASDAQ Biotechnology Index. For the PSUs granted during 2022, such inputs consisted of: (a) an expected term that was based on the actual 2.5 year term of the award; (b) a risk-free interest rate of 2.8% derived from the yield on U.S. government bonds of appropriate term from the U.S. Department of Treasury; (c) a dividend yield of 0.0% based on historic and future dividend yield estimates; (d) stock price volatility of 59.71% based on an analysis of the historical stock price volatility of Ligand and each company in the NASDAQ Biotechnology Index over the 2.5 years prior to the date of grant to conform to the term of the awards; and (e) initial TSR performance of 100% based on actual historical TSR performance for Ligand and each company in the NASDAQ Biotechnology Index. Based on this methodology, the valuation of the PSUs tied to relative TSR performance granted during 2022 was 147.15% of the closing price of Ligand Common Stock on the date of grant. The highest level of performance that may be achieved for the spin-off PSU grant and combined TSR PSU grant is 125% and 200% of the target, respectively. The full grant date fair value of the PSUs awarded to our named executive officers during fiscal year 2022, assuming maximum achievement of the applicable performance objectives, was $1,279,438 for Mr. Korenberg, $519,415 for Mr. Espinoza and $546,065 for Mr. Reardon. The PSU grant tied to the completion of the OmniAb spin-off was vested at 100% of target upon completion of the distribution during the fourth quarter of 2022.

  40. SUMMARY COMPENSATION TABLE

    With respect to the PSUs granted in 2023, the number of PSUs that are eligible to vest will be determined based on the measurement of two equally weighted metrics, the execution of new partnered programs over a two-year performance period measured from January 1, 2023 and Ligand’s relative TSR ranked on a percentile basis against the NASDAQ Biotechnology Index over a three-year performance period measured from January 1, 2023. The grant date fair value of the PSUs granted during 2023 included in this column that are tied to the execution of new partnered programs was calculated based on the probable achievement of the performance goals as determined at the date of grant, which was determined to be the target level of performance. The grant date fair value of the PSUs that are tied to relative TSR was calculated using the Monte Carlo simulation which utilizes the stock volatility, dividend yield and market correlation of the Company and the NASDAQ Biotechnology Index. For the PSUs granted during 2023, such inputs consisted of: (a) an expected term that was based on the actual 2.9 year term of the award; (b) a risk-free interest rate of 4.39% derived from the yield on U.S. government bonds of appropriate term from the U.S. Department of Treasury; (c) a dividend yield of 0.0% based on historic and future dividend yield estimates; (d) stock price volatility of 53.84% based on an analysis of the historical stock price volatility of Ligand and each company in the NASDAQ Biotechnology Index over the three years prior to the date of grant to conform to the term of the awards; and (e) initial TSR performance of 15.76% based on actual historical TSR performance for Ligand and each company in the NASDAQ Biotechnology Index. Based on this methodology, the valuation of the PSUs tied to relative TSR performance granted during 2023 was 169.33% of the closing price of Ligand common stock on the date of grant. The highest level of performance that may be achieved for the PSUs is 200% of the target. The full grant date fair value of the PSUs awarded to our named executive officers during fiscal year 2023, assuming maximum achievement of the applicable performance objectives, was $4,302,102 for Mr. Davis, $2,241,778 for Mr. Korenberg, $1,494,554 for Mr. Espinoza and $1,401,119 for Mr. Reardon. (2) Represents performance bonus awards under the management bonus plan earned in 2021, 2022, and 2023 but paid in the subsequent year. (3) Represents life insurance premiums paid by us for each year represented in the table, as follows: $3,960 for Mr. Davis, $900 for Mr. Korenberg, $1,380 for Mr. Espinoza and $900 for Mr. Reardon. Also includes 401(k) matching funds paid by us for the named executive officers, as follows: $6,000 for each named executive officer in 2023; $2,572 for Mr. Reardon, and $6,000 for the remaining named executive officers (other than Mr. Davis) in 2022; and $6,000 for each named executive officer in 2021. In addition, the amount for Mr. Davis in 2022 includes the cash retainers paid to Mr. Davis received for his service on the Board prior to his appointment as our Chief Executive Officer effective as of December 5, 2022 in the amount of $65,021. Mr. Davis did not receive any 401(k) matching funds during 2022. (4) For Mr. Davis, his salary in 2022 represents the pro-rated base salary in the amount of $49,243 after his appointment as our Chief Executive Officer effective as of December 5, 2022.

  41. GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR 2023

    GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR 2023 The following table summarizes plan-based awards granted to our named executive officers during the last fiscal year.

  42. GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR 2023

    | Name | Grant Date | Date of Board Action approving Award | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | | All Other Option Awards: Number of Securities Underlying Options (#)(4) | | Exercise or Base Price of Option Awards ($/Sh) | | Grant Date Fair Value of Stock and Option Awards ($)(5) | | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | | Target (#) | | Maximum (#) | | | | | | | | | | | Todd C. Davis | | | | | | | | | | | | | | | | | | | | | | 1/27/23 | 1/27/23 | — | 390,000 | — | | — | | — | | — | | — | | — | | — | | — | | | 2/23/23 | 2/23/23 | — | — | — | | — | | 20,783 | | 41,566 | | — | | — | | — | | 2,101,551 | | | 2/23/23 | 2/23/23 | — | — | — | | — | | — | | — | | 17,005 | | — | | — | | 1,276,905 | | | 2/23/23 | 2/23/23 | — | — | — | | — | | — | | — | | — | | 46,178 | | 75.09 | | 1,788,095 | | Matthew Korenberg | | | | | | | | | | | | | | | | | | | | | | 1/27/23 | 1/27/23 | — | 275,400 | — | | — | | — | | — | | — | | — | | — | | — | | | 2/23/23 | 2/23/23 | — | — | — | | — | | 11,085 | | 22,170 | | — | | — | | — | | 1,120,889 | | | 2/23/23 | 2/23/23 | — | — | — | | — | | — | | — | | 9,069 | | — | | — | | 680,991 | | | 2/23/23 | 2/23/23 | — | — | — | | — | | — | | — | | — | | 24,628 | | 75.09 | | 953,640 | | Tavo Espinoza | | | | | | | | | | | | | | | | | | | | | | 1/27/23 | 1/27/23 | — | 174,400 | — | | — | | — | | — | | — | | — | | — | | — | | | 2/23/23 | 2/23/23 | — | — | — | | — | | 7,390 | | 14,780 | | — | | — | | — | | 747,277 | | | 2/23/23 | 2/23/23 | — | — | — | | — | | — | | — | | 6,046 | | — | | — | | 453,994 | | | 2/23/23 | 2/23/23 | — | — | — | | — | | — | | — | | — | | 16,419 | | 75.09 | | 635,773 | | Andrew Reardon | | | | | | | | | | | | | | | | | | | | | | 1/27/23 | 1/27/23 | — | 174,400 | — | | — | | — | | — | | — | | — | | — | | — | | | 2/23/23 | 2/23/23 | — | — | — | | — | | 6,928 | | 13,856 | | — | | — | | — | | 700,559 | | | 2/23/23 | 2/23/23 | — | — | — | | — | | — | | — | | 5,668 | | — | | — | | 425,610 | | | 2/23/23 | 2/23/23 | — | — | — | | — | | — | | — | | — | | 15,393 | | 75.09 | | 596,045 |

  43. GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR 2023

    (1) Represents the target cash bonus awards granted under our annual performance bonus program. Actual bonus amounts paid are reflected in the Summary Compensation Table above. (2) The PSUs are eligible to vest based on objectives related to our relative TSR for the three year performance period commencing January 1, 2023 and ending December 31, 2025 and number of new programs for the two year performance period commencing January 1, 2023 and ending December 31, 2024, with each such objective equally weighted (and a possible performance multiplier of 200% for “maximum” performance relative to each objective). Threshold performance levels, below which no vesting will be awarded, were also established for each performance objective. For a description of the change in control provisions applicable to the foregoing equity awards, see “Severance and Change in Control Arrangements” above. (3) The RSU awards granted to the named executive officers vest in equal installments over a three year period on each of February 15, 2024, 2025 and 2026. For a description of the change in control provisions applicable to the foregoing equity awards, see “Severance and Change in Control Arrangements” above. (4) Each option grant to the named executive officers vests 12.5% on August 23, 2023 and the remainder in 42 equal monthly installments. For a description of the change in control provisions applicable to the foregoing equity awards, see “Severance and Change in Control Arrangements” above. (5) Represents the fair value of the stock option or stock award at the time of grant as determined in accordance with the provisions of Topic 718. The assumptions used to calculate the value of stock and option awards are set forth under Note 10 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024. With respect to awards, the vesting of which is performance-based, the grant date fair value is based on the estimated probable outcome of the performance objectives applicable to such awards on the grant date. The grant date fair value of the PSUs that are tied to relative TSR was calculated using the Monte Carlo simulation which utilizes the stock volatility, dividend yield and market correlation of the Company and the NASDAQ Biotechnology Index. See additional disclosure in footnote (1) under the “Summary Compensation Table” above.

  44. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table provides information on all stock and option awards held by our named executive officers as of December 31, 2023. All outstanding equity awards are in shares of our common stock.

  45. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    | | Option Awards | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Expiration Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Unit or Other Rights That Have Not Vested (#) | Equity incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | | Todd C. Davis | 3,556 | — | — | 66.19 | 6/5/2029 | — | — | — | — | | | 2,156 | — | — | 68.51 | 6/10/2030 | — | — | — | — | | | 2,855 | — | — | 67.24 | 6/4/2031 | — | — | — | — | | | 7,448 | — | — | 46.20 | 6/9/2032 | — | — | — | — | | | 33,000 | 99,000 | — | 69.70 | 12/4/2032 | — | — | — | — | | | 521 | 1,560 | — | 67.03 | 12/21/2032 | — | — | — | — | | | 9,621 | 36,557 | — | 75.09 | 2/22/2033 | — | — | — | — | | | — | — | — | — | — | 17,005(4) | 1,214,497 | — | — | | | — | — | — | — | — | — | — | 20,783(5) | 1,484,322 | | Matthew Korenberg | 21,840 | — | — | 60.94 | 8/5/2025 | — | — | — | — | | | 6,048 | — | — | 49.99 | 2/10/2026 | — | — | — | — | | | 13,301 | — | — | 58.49 | 2/24/2027 | — | — | — | — | | | 14,021 | — | — | 92.65 | 3/1/2028 | — | — | — | — | | | 25,595 | — | — | 68.74 | 2/10/2029 | — | — | — | — | | | 25,745 | 1,118 | — | 55.75 | 2/12/2030 | — | — | — | — | | | 7,178 | 2,947 | — | 103.42 | 2/3/2031 | — | — | — | — | | | 23,755 | 28,058 | — | 52.84 | 5/4/2032 | — | — | — | — | | | 7,500 | 22,500 | — | 63.62 | 12/12/2032 | — | — | — | — | | | 6,492 | 19,475 | — | 67.03 | 12/21/2032 | | | | | | | 5,131 | 19,497 | — | 75.09 | 2/22/2033 | — | — | — | — | | | — | — | — | — | — | 41,405(6) | 2,957,145 | — | — | | | — | — | — | — | — | — | — | 11,805(5) | 791,691 | | | — | — | — | — | — | — | — | 8,485(7) | 603,785 | | Tavo Espinoza | 1,883 | — | — | 80.72 | 8/1/2026 | — | — | — | — | | | 1,932 | — | — | 58.49 | 2/24/2027 | — | — | — | — | | | 3,057 | — | — | 92.65 | 3/1/2028 | — | — | — | — | | | 2,620 | — | — | 70.04 | 1/31/2029 | — | — | — | — | | | 3,493 | — | — | 68.74 | 2/10/2029 | — | — | — | — | | | 3,465 | 203 | — | 55.75 | 2/12/2030 | — | — | — | — | | | 6,227 | 1,635 | — | 57.22 | 10/1/2030 | — | — | — | — | | | 3,097 | 1,270 | — | 103.42 | 2/3/2031 | — | — | — | — | | | 10,717 | 12,650 | — | 52.84 | 5/4/2032 | — | — | — | — | | | 5,000 | 15,000 | — | 63.62 | 12/12/2032 | — | — | — | — | | | 1,655 | 4,965 | — | 67.03 | 12/21/2032 | — | — | — | — | | | 3,421 | 12,998 | — | 75.09 | 2/22/2033 | — | — | — | — | | | — | — | — | — | — | 17,042(8) | 1,217,140 | — | — | | | — | — | — | — | — | — | — | 7,390(5) | 527,794 | | | — | — | — | — | — | — | — | 3,432(7) | 245,113 | | Andrew Reardon | 24,317 | 48,627 | — | 52.27 | 7/31/2032 | — | — | — | — | | | 3,208 | 12,185 | — | 75.09 | 2/22/2033 | — | — | — | — | | | — | — | — | — | — | 11,388(9) | 813,331 | — | — | | | — | — | — | — | — | — | — | 6,928(5) | 494,798 | | | — | — | — | — | — | — | — | 3,432(7) | 245,113 |

  46. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

    (1) Each option grant to the named executive officers has a ten year term from the date of grant. Except as described below, each option vests 12.5% after six months from grant and the remainder in 42 equal monthly installments. The option grants to Mr. Davis prior to December 2022 were granted to him in his capacity as a non-employee director and vested on the earlier of (A) the date of the next annual meeting of our stockholders following the grant date or (B) on the first anniversary of the date of grant. For a description of the change in control provisions applicable to the stock option awards, see “Severance and Change in Control Arrangements” above. (2) Except as described below, the RSU awards granted to the named executive officers vest over a three year period in equal installments on February 15 of the first three calendar years following the year in which the date of grant occurs. For a description of the change in control provisions applicable to the stock awards, see “Severance and Change in Control Arrangements” above. (3) Computed by multiplying the closing market price of our common stock on December 29, 2023, the last trading day of 2023, of $71.42, by the number of shares of common stock subject to such award. (4) This balance represents the unvested RSUs from the February 23, 2023 grant to Mr. Davis. For a description of the change in control provisions applicable to the stock awards, see “Severance and Change in Control Arrangements” above. (5) Represents the “target” number of PSUs granted to the named executive officer in 2023. The PSUs granted in 2023 are eligible to vest based on the achievement of TSR relative to the NASDAQ Biotechnology Index for three year performance period commencing January 1, 2023 and ending December 31, 2025 (and a possible performance multiplier of 200% for “maximum” performance), and the number of new programs for the two year performance period commencing January 1, 2023 and ending December 31, 2024. Threshold performance levels, below which no vesting will be awarded, were also established for each performance objective. The “target” number of 2023 PSUs granted to the named executive officers that remain eligible to vest are as follows: Mr. Davis, 20,783 shares, Mr. Korenberg, 11,085 shares, Mr. Espinoza, 7,390 shares, and Mr. Reardon, 6,928 shares. For a description of the change in control provisions applicable to the foregoing equity awards, see “Severance and Change in Control Arrangements” above. (6) This balance represents the remaining unvested RSUs from the following RSU grants to Mr. Korenberg: 13,780 unvested RSUs granted on February 3, 2021, 9,223 unvested RSUs granted on June 10, 2022, 9,333 unvested RSUs granted on December 13, 2022, and 9,069 unvested RSUs granted on February 23, 2023. For a description of the change in control provisions applicable to the stock awards, see “Severance and Change in Control Arrangements” above. (7) Represents the remaining portion of the “target” number of PSUs granted to the named executive officer in 2022. This portion of PSUs granted in 2022 is eligible to vest based on the achievement of certain combined TSR goals of Ligand and OmniAb relative to the NASDAQ Biotechnology Index during the period commencing on the completion of the OmniAb spin-off and ending December 31, 2024 (and a possible performance multiplier of 200% for “maximum” performance). Threshold performance levels, below which no vesting will be awarded, were also established for each performance objective. The “target” number of 2022 PSUs granted to the named executive officers that remain eligible to vest based on the relative TSR objective are as follows: Mr. Korenberg, 8,454 shares, Mr. Espinoza, 3,432 shares, and Mr. Reardon, 3,432 shares. For a description of the change in control provisions applicable to the stock awards, see “Severance and Change in Control Arrangements” above. (8) This balance represents the remaining unvested RSUs from the following RSU grants to Mr. Espinoza: $583 unvested RSUs granted on February 3, 2021, 3,080 unvested RSUs granted on June 10, 2022, 7,333 unvested RSUs granted on December 13, 2022, and 6,046 unvested RSUs granted on February 23, 2023. For a description of the change in control provisions applicable to the stock awards, see “Severance and Change in Control Arrangements” above. (9) This balance represents the remaining unvested RSUs from the following RSU grants to Mr. Reardon: 5,720 unvested RSUs granted on August 10, 2022, and 5,668 unvested RSUs granted on February 23, 2023. For a description of the change in control provisions applicable to the stock awards, see “Severance and Change in Control Arrangements” above.

  47. OPTION EXERCISES AND STOCK VESTED DURING FISCAL YEAR 2023

    OPTION EXERCISES AND STOCK VESTED DURING FISCAL YEAR 2023 The following table provides information on stock option exercises and stock vesting in fiscal 2023 by our named executive officers.

  48. OPTION EXERCISES AND STOCK VESTED DURING FISCAL YEAR 2023

    | | Option Awards | | Stock Awards | | | Name | No. of Shares Acquired on Exercise (#) | Value Realized Upon Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Todd C. Davis | — | — | 1,723 | 127,088 | | Matthew Korenberg | — | — | 15,169 | 1,044,636 | | Tavo Espinoza | — | — | 7,125 | 457,895 | | Andrew Reardon | — | — | 2,861 | 196,637 |

  49. OPTION EXERCISES AND STOCK VESTED DURING FISCAL YEAR 2023

    (1) Computed by multiplying the closing market price of our common stock on the vesting date by the number of RSUs or PSUs subject to such award vesting on the applicable vesting date.

  50. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL The following table summarizes potential change in control and severance payments to each named executive officer as of December 31, 2023. The three right-hand columns describe the payments that would apply in three different potential scenarios—a termination without cause prior to a change in control or more than 24 months following a change in control (Mr. Davis would also be entitled to such benefits if he resigned for good reason at such times); a change in control without a termination of employment; or a termination of employment as a result of the named executive officer’s resignation for good reason or termination of employment by us other than for cause, in each case within 24 months following a change in control. The table assumes that the termination or change in control occurred on December 31, 2023. For purposes of estimating the value of accelerated equity awards to be received in the event of a termination of employment or change in control, we have assumed a price per share of our common stock of $71.42, which represents the closing market price of our common stock as reported on the Nasdaq Global Market on December 29, 2023, the last trading day of 2023. All cash severance benefits will be paid in a lump sum.

  51. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    | Name | Benefit | Termination Without Cause; No Change of Control ($) | Change of Control; No Termination ($)(1) | Termination Without Cause or Resignation for Good Reason within 24 Months Following a Change of Control ($)(2) | | Todd C. Davis | Salary | $975,000 | $— | $1,300,000 | | | Bonus | — | — | 780,000 | | | Option acceleration | 177,128 | — | 177,128 | | | Stock Award acceleration | 2,698,819 | — | 2,698,819 | | | Benefits continuation | 66,815 | — | 66,815 | | | Total value: | 3,917,762 | — | 5,022,762 | | Matthew Korenberg | Salary | 197,723 | — | 550,800 | | | Bonus | — | — | 275,400 | | | Option acceleration | — | — | 799,832 | | | Stock Award acceleration | — | — | 4,352,620 | | | Benefits continuation | 18,560 | — | 66,815 | | | Total value: | 216,283 | — | 6,045,467 | | Tavo Espinoza | Salary | 139,744 | — | 436,000 | | | Bonus | — | — | 174,400 | | | Option acceleration | — | — | 400,231 | | | Stock Award acceleration | — | — | 1,990,047 | | | Benefits continuation | 11,815 | — | 53,167 | | | Total value: | 151,559 | — | 3,053,845 | | Andrew Reardon | Salary | 81,051 | — | 436,000 | | | Bonus | — | — | 174,400 | | | Option acceleration | — | — | 931,207 | | | Stock Award acceleration | — | — | 1,553,242 | | | Benefits continuation | 6,543 | — | 39,260 | | | Total value: | 87,594 | — | 3,134,109 |

  52. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    (1) The 2002 Plan and the Inducement Plan provide that equity awards will vest in the event of a change in control and the equity awards are not assumed or replaced by a successor. This disclosure assumes that the successor will assume or replace the outstanding equity awards under the 2002 Plan and the Inducement Plan in the event of a change in control. (2) The severance agreement with Mr. Davis and the change in control severance agreements with our other named executive officers provide that all of a named executive officer’s outstanding stock awards will vest in the event of an involuntary termination following a change in control. In addition, the severance agreement with Mr. Davis provides that all of his outstanding stock awards the vesting of which is time-based will vest upon an involuntary termination at any time, and any performance-based awards will be governed by the terms of the applicable award agreements. The agreements governing our PSUs provide for accelerated vesting of such PSUs in connection with a change in control, as described above under “Severance and Change in Control Arrangements.” For purposes of calculating the values in the table above, PSUs are included at “target” performance levels.

  53. PAY RATIO DISCLOSURE

    PAY RATIO DISCLOSURE As required by Section 953(b) of the Dodd-Frank Act and Item 402(u) of Regulation S-K, we are providing the following information regarding the relationship of the annual total compensation of our median compensated employee to the total annualized compensation of Todd C. Davis, our Chief Executive Officer: •Total annualized compensation of our Chief Executive Officer, Mr. Davis, in 2023 was $6,216,518, as further described below. The total compensation for the median employee, other than our Chief Executive Officer, was $404,660. The total compensation for the median employee was calculated according to the requirements of the Summary Compensation Table. •The ratio of our Chief Executive Officer’s annualized compensation (as determined below) to the compensation of the median employee for 2023 was 15 to 1. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Therefore, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. We had 58 active employees as of December 31, 2023. Pursuant to SEC rules, we chose to exclude 25 of these employees, each of whom was a newly acquired employee from the acquisition we completed during 2023 that are intended to be employees on a transitionary basis consistent with our plans for that business. To identify the median of the annual total compensation of our employees as of December 31, 2023, we compared the sum of each employee’s base salary, 2023 bonus, the grant date fair value of equity awards granted during 2023 (determined in accordance with Topic 718) and 401(k) matching contributions for 2023. This compensation measure was consistently applied to all of our employees included in this calculation.

  54. PAY VERSUS PERFORMANCE DISCLOSURE

    PAY VERSUS PERFORMANCE DISCLOSURE As required by Section 953(a) of the Dodd-Frank Act and Item 402(v) of Regulation S-K, the following table sets forth information concerning the compensation of our NEOs for each of the fiscal years ended December 31, 2020, 2021, 2022 and 2023, and our financial performance for each such fiscal year:

  55. PAY VERSUS PERFORMANCE DISCLOSURE

    | | | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year | Summary Compensation Table Total for PEO Todd C. Davis ($) | Summary Compensation Table Total for PEO John L. Higgins ($) | Compensation Actually Paid to PEO Todd C. Davis ($)(1) | Compensation Actually Paid for PEO John L. Higgins ($) | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($)(2)(3) | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($)(4) | Net Income (Loss) ($ thousands) | Revenue ($ thousands) | | 2023 | 6,216,518 | — | 5,060,695 | — | 2,788,000 | 2,366,969 | 98.71 | 118.87 | 52,154 | 131,314 | | 2022 | 5,195,169 | 16,764,990 | 4,977,510 | 12,243,958 | 3,852,731 | 2,922,612 | 92.32 | 113.65 | (33,361) | 196,245 | | 2021 | — | 9,587,211 | — | 15,958,534 | 4,996,210 | 7,722,154 | 148.11 | 126.45 | 57,138 | 241,544 | | 2020 | — | 5,842,767 | — | 6,788,815 | 2,846,812 | 3,246,826 | 95.36 | 126.42 | (2,985) | 163,562 |

  56. PAY VERSUS PERFORMANCE DISCLOSURE

    (1) Compensation actually paid to our current PEO, Todd C. Davis for the current fiscal year is presented in the following table:

  57. PAY VERSUS PERFORMANCE DISCLOSURE

    | Year | Summary Compensation Table Total for Todd C. Davis ($) | Exclusion of Stock Awards and Option Awards for Todd C. Davis ($) | Inclusion of Equity Values for Todd C. Davis ($) | Compensation Actually Paid to Todd C. Davis ($) | | 2023 | 6,216,518 | (5,166,551) | 4,010,728 | 5,060,695 |

  58. PAY VERSUS PERFORMANCE DISCLOSURE

    (2) Average compensation actually paid to our non-PEO NEOs for the current fiscal year is presented in the following table:

  59. PAY VERSUS PERFORMANCE DISCLOSURE

    | Year | Average Summary Compensation Table Total for Non-PEO NEOs | Average Exclusion of Stock Awards and Option Awards for Non-PEO NEOs | Average Inclusion of Equity Values for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs | | 2023 | 2,788,000 | (2,104,926) | 1,683,895 | 2,366,969 |

  60. PAY VERSUS PERFORMANCE DISCLOSURE

    (3) Amounts represent compensation actually paid to our PEO and the average compensation actually paid to our remaining NEOs for the relevant fiscal year, as determined under SEC rules (and described below), which includes the individuals indicated in the table below for each fiscal year:

  61. PAY VERSUS PERFORMANCE DISCLOSURE

    | Year | PEO | Non-PEO NEOs | | 2023 | Todd C. Davis | Matthew Korenberg, Tavo Espinoza, and Andrew Reardon | | 2022 | Todd C. Davis, John L. Higgins | Matthew Korenberg, Tavo Espinoza, Andrew Reardon, Matthew W. Foehr, and Charles S. Berkman | | 2021 | John L. Higgins | Matthew Korenberg, Matthew W. Foehr, and Charles S. Berkman | | 2020 | John L. Higgins | Matthew Korenberg, Matthew W. Foehr, and Charles S. Berkman |

  62. PAY VERSUS PERFORMANCE DISCLOSURE

    (4) For the relevant fiscal year, the Peer Group TSR is from the NASDAQ Biotechnology Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2023. The calculation of the TSR assumes an initial investment of $100 on January 1, 2019 through December 31 of the applicable year in the table above, assuming all dividends are reinvested. The amounts reported in the “Compensation Actually Paid to PEO” and “Average Compensation Actually Paid to Non-PEO NEOs” columns do not reflect the actual compensation paid to or realized by the individuals serving as our Chief Executive Officer or our non-PEO NEOs during each applicable year. The calculation of compensation actually paid for purposes of this table includes point-in-time fair values of stock awards and these values will fluctuate based on our stock price, various accounting valuation assumptions and projected performance related to our performance awards. See the Summary Compensation Table for certain other compensation paid to the individuals serving as our Chief Executive Officer and our non-PEO NEOs for each applicable fiscal year and the Option Exercises and Stock Vested table for the value realized by each of them upon the exercise of stock options and/or vesting of stock awards during the applicable fiscal year. For 2023, compensation actually paid to our NEOs represents the “Total” compensation reported in the Summary Compensation Table, as adjusted as follows:

  63. PAY VERSUS PERFORMANCE DISCLOSURE

    | | | Adjustments(1) | | | | | | | | Year | Year-End ASC 718 Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for ($) | Change in ASC 718 Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards ($) | Vesting-Date ASC 718 Fair Value of Equity Awards Granted During Year that Vested During Year ($) | Change in ASC 718 Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year ($) | ASC 718 Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year ($) | Total - Inclusion of Equity Value ($) | | Todd C. Davis | 2023 | 4,302,070 | (354,271) | 246,646 | (183,717) | — | 4,010,728 | | Non-PEO NEOs | 2023 | 1,751,529 | (69,868) | 100,496 | (98,262) | — | 1,683,895 |

  64. PAY VERSUS PERFORMANCE DISCLOSURE

    (1) Fair value or change in fair value, as applicable, of equity awards in the “Compensation Actually Paid” columns was determined by reference to (i) for solely service-vesting RSU awards, the closing price per share on the applicable year-end dates or, in the case of vesting dates, the closing price per share on the applicable vesting dates; (ii) for stock options, a Black-Scholes value as of the applicable year-end or vesting dates, determined based on the same methodology as used to determine grant date fair value but using the closing stock price on the applicable revaluation date as the current market price and with an expected life set equal to the remaining life of the award in the case of underwater stock options and, in the case of in the money options, an expected life equal to the original ratio of expected life relative to the ten year contractual life times the remaining life as of the applicable revaluation date, and in all cases based on volatility and risk free rates determined as of the revaluation date based on the expected life period and based on an expected dividend yield based on our dividend yield methodology used for valuing stock options generally; and (iii) for PSUs, calculated by a Monte Carlo simulation model as of the applicable revaluation dates, which utilizes multiple input variables, including expected volatility of our stock price and other assumptions appropriate for determining fair value, to estimate the probability of satisfying the performance objective established for the award, including the expected volatility of our stock price relative to the applicable comparative index and a risk-free interest rate. For additional information about the assumptions used to value our stock and option awards, please see Note 10 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024, and our Annual Report on Form 10-K for prior years.

  65. Pay Versus Performance Tabular List

    Pay Versus Performance Tabular List We believe the following performance measures represent the most important financial performance measures used by us to link compensation actually paid to our NEOs for the fiscal year ended December 31, 2023: •Revenue •Adjusted EBITDA •Total Shareholder Return The measures in the above list are not ranked. For additional details regarding how we link pay to financial performance measures, please see the section titled “Elements of Compensation—Annual Performance-Based Cash Compensation” and “Elements of Compensation—Long-Term Performance-Based Equity Incentive Program” in our Compensation Discussion and Analysis above.