DEF 14A of Achieve Life Sciences, Inc., Apr 26, 2024

DEF 14A of Achieve Life Sciences, Inc.

Filed Apr 26, 2024 · FY20230000950170-24-049089

Open on EDGAR

  1. BOARD OF DIRECTORS

    BOARD OF DIRECTORS

  2. General

    General Directors are elected at each annual stockholders meeting to hold office until the next annual meeting or until their successors are elected and have qualified. Currently, there are eight members of the Board of Directors. The following table sets forth information with respect to the directors nominated for election at the annual stockholders meeting. The ages of such persons are shown as of April 10, 2024.

  3. General

    | Name | Age | Position | Director Since | | John Bencich | 47 | Director and Chief Executive Officer | 2020 | | Richard Stewart | 65 | Director, Executive Chairman. Chairman of the Board | 2017 | | Cindy Jacobs | 66 | Director, President and Chief Medical Officer | 2021 | | Bridget Martell | 58 | Director, Chairperson of the Nominating and Governance Committee and Member of the Audit Committee and Compensation Committee | 2021 | | Vaughn Himes | 63 | Director, Chairperson of the Chemistry, Manufacturing & Controls Committee and Member of the Compensation Committee | 2022 | | Stuart Duty | 59 | Director, Chairperson of the Audit Committee and Member of the Nominating and Governance Committee | 2023 | | Thomas B. King | 69 | Lead Director and Member of the Audit Committee, Compensation Committee and Nominating and Governance Committee | 2023 | | Thomas Sellig | 57 | Director and Member of the Audit Committee and Chemistry, Manufacturing & Controls Committee | 2023 |

  4. General

    The Board of Directors held a total of six meetings during fiscal year 2023. During fiscal year 2023, each of our directors attended at least 75% of the aggregate of: (i) the total number of meetings of the Board of Directors held during the period he or she was a director; and (ii) the total number of meetings held by all committees on which the director served during the period he or she was a member. Although we do not have a formal policy regarding attendance by directors at annual meetings of stockholders, we encourage directors to attend and, historically, most have done so. All of our directors then in office were in attendance at the 2023 annual meeting. Pursuant to our Corporate Governance Guidelines, the Board of Directors is required to hold at least four regularly scheduled meetings each year. At least one of these meetings must include budgeting and long-term strategic planning. Each director is expected to attend no fewer than 75% of the total of all meetings of the Board of Directors and meetings of the committees on which he or she serves. Set forth below are the names of, and information concerning, our current directors. John Bencich has served as our Chief Executive Officer and member of the Board of Directors since September 2020. Previously, Mr. Bencich served as our Vice President and Chief Financial Officer from August 2014 to September 2017, and as our Executive Vice President and Chief Operating Officer from August 2017 to August 2020. Mr. Bencich joined us from Integrated Diagnostics, Inc., a molecular diagnostics company, where he served as Chief Financial Officer from September 2012 to August 2014. Prior to joining Integrated Diagnostics, he served as Chief Financial Officer of Allozyne, Inc. since July 2011. He served as the Vice President, Chief Financial Officer and Treasurer of Trubion Pharmaceuticals, Inc., a publicly traded biotechnology company, from November 2009 until its acquisition by Emergent BioSolutions Inc. in October 2010. Mr. Bencich served as Trubion’s Senior Director of Finance and Accounting from May 2007 through November 2009. Earlier in his career, Mr. Bencich held roles at Onyx Software Corporation, a publicly traded software company, and Ernst & Young LLP an international professional services firm. Mr. Bencich received a B.A. in Accountancy from the University of San Diego and an M.B.A. from Seattle University. Mr. Bencich received his Certified Public Accountant Certification from the State of Washington and held an active license for 17 years. The determination was made that Mr. Bencich should serve on our Board of Directors based on our belief that the Board of Directors have the benefit of management’s perspective and, in particular, that of the Chief Executive Officer, as well as Mr. Bencich’s extensive financial experience. Richard Stewart has served as our Executive Chairman since September 2020, and as our Chairman of the Board and a director since the consummation of the merger between OncoGenex Pharmaceuticals, Inc. and Achieve in August 2017, or the Merger. Previously, Mr. Stewart served as Chief Executive Officer from the Merger to September 2020, and was Chairman and a director of Achieve, from its founding in May 2015, through the Merger. Mr. Stewart is also a founder and has served as a director of Ricanto Limited, a pharmaceutical asset optimization company, since 2009. Mr. Stewart has been Chairman and Chief Executive Officer of Renown Pharma Limited, a central nervous system company focused on Parkinson’s disease, since 2016. Prior to Achieve, Mr. Stewart was Chairman and Chief Executive Officer of Huxley Pharmaceuticals, Inc., a single purpose central nervous system company, during 2009, prior to Huxley Pharmaceuticals, Inc.’s acquisition by BioMarin Pharmaceutical Inc. Mr. Stewart was Chief Executive Officer of Brabant Pharma Limited, a single purpose central nervous system company, from 2013 to 2014 prior to its acquisition by Zogenix Inc. He was a co-founder and Chief Executive Officer of Amarin Corporation plc, a central nervous system company focused on Parkinson’s disease and Huntington’s disease, from 2000 to 2007. Mr. Stewart was a co-founder and Chief Financial Officer, and later Chief Business Officer, of SkyePharma plc, a drug delivery company specializing in controlled release formulations, and held such positions from 1995 to 1998. Mr. Stewart holds a B.S. in Business Administration from the University of Bath. The determination was made that Mr. Stewart should serve on our Board of Directors due to his prior service on boards of directors, and extensive experience and innovations in the field of biotechnology. In addition, Mr. Stewart’s accomplishments provide the Board of Directors with in-depth product and field knowledge. Cindy Jacobs, Ph.D., M.D., has served as our President since September 2020 and our Chief Medical Officer since August 2008, and a member of the Board of Directors since March 2021. Previously, Dr. Jacobs served as Executive Vice President and Chief Medical Officer of OncoGenex Pharmaceuticals, Inc. from September 2005 to August 2008. Dr. Jacobs is also the founder of Eagles Ridge Executive Consulting LLC., an executive consulting business operating since July 2020. From 1999 to July 2005, Dr. Jacobs served as Chief Medical Officer and Senior Vice President, Clinical Development of Corixa Corporation. Prior to 1999, Dr. Jacobs held Vice President, Clinical Research positions at two other biopharmaceutical companies. Dr. Jacobs currently serves on the Board of Directors of Pacylex Pharmaceuticals Inc. since October 2020 and HiberCell Inc. since September 2021 and previously served on the Board of Directors of Renown Pharmaceuticals Private Limited from January 2018 to October 2021. Dr. Jacobs received her Ph.D. degree in Veterinary Pathology/Microbiology from Washington State University and an M.D. degree from the University of Washington Medical School. The determination was made that Dr. Jacobs should serve on our Board of Directors based on our belief that the Board of Directors have the benefit of management’s perspective and, in particular, that of the President and Chief Medical Officer, as well as Dr. Jacob’s extensive clinical and regulatory experience and experience serving on the boards of directors of various companies.

  5. General

    Bridget Martell, M.A., M.D., is the Founder and Managing Partner of her consultancy practice, BAM Consultants, which she started in 2013. She previously served as President and Chief Executive Officer of the privately held biotechnology company Artizan Biosciences, Inc. from July 2021 until August of 2023. Prior to that, Dr. Martell was at Kura Oncology, Inc., a public, clinical-stage biopharmaceutical company, where she served in varied roles first as VP, Clinical Development, Acting Chief Medical Officer, and Senior Scientific Advisor from October 2017 until December 2021. She has served as the Acting Chief Medical Officer of a number of privately held early-stage biotechnology companies, including Nobias Therapeutics, Inc. from August 2020 to August 2021 and August 2023 to present, for Verseau Therapeutics, Inc. from October 2020 to September 2021, and most recently at Glycyx Therapeutics, Inc. starting in August 2023. Additionally, Dr. Martell served as Chief Medical Officer of RRD International, Inc., a privately held boutique Contract Research Organization from April 2018 to January 2020. From 2015 to 2017, Dr. Martell served as Senior Vice President, New Product Development and Chief Medical Officer at Juniper Pharmaceuticals, a publicly traded specialty pharmaceuticals company. Previous to that, Dr. Martell held leadership roles of increasing responsibility at Pfizer, Inc., a publicly traded biopharmaceutical company from 2005 to 2011. Dr. Martell currently serves as an independent director of Aligos Therapeutics Inc. and Ayala Pharmaceuticals, Inc., each a publicly traded biotechnology company, and previously served as a director of POINT Biopharma Global, Inc, a cancer treatment biotechnology company, from June 2023 until its acquisition by Eili Lilly and Company, a pharmaceutical company, in December 2023. Dr. Martell holds a B.S. in microbiology from Cornell University, an M.A. in molecular immunology from Boston University and an M.D. from the Chicago Medical School. She completed her internship and residency in internal medicine and was an internal medicine chief resident and RWJ Faculty Clinical Scholar at Yale University. Dr. Martell is board certified in both internal and addiction medicine. Dr. Martell was a Teaching Attending and Clinical Associate Professor at Yale from 2005 to 2020 and has continued her engagement at Yale as an Entrepreneur In Residence at Yale Ventures since 2017. The determination was made that Dr. Martell should serve on the Board of Directors due to her diverse background of scientific, clinical and leadership experience in the clinical development, success of numerous marketed products across multiple therapeutic categories, leadership in her operational roles, and engagement with key industry and business stakeholders in the biopharmaceutical space. Vaughn B. Himes, Ph.D. previously served as Chief Technical Officer at Seagen, Inc., a publicly traded biotechnology company, from August 2016 to December 2023. Dr. Himes joined Seagen, Inc. as Executive Vice President, Technical Operations in April 2009 and served as Executive Vice President, Technical Operations and Process Science from July 2012 until August 2016. Previously, Dr. Himes was with ZymoGenetics, Inc. from November 2005 to March 2009, most recently as Senior Vice President, Technical Operations where his responsibilities included commercial and clinical manufacturing, supply chain and logistics, quality control and process development. From March 2003 to October 2005, he was Vice President, Manufacturing at Corixa, Inc. Prior to that, he held Vice President positions in manufacturing and development at Targeted Genetics and Genovo, Inc. Dr. Himes has served on the board of directors of VBI Vaccines Inc., a publicly traded biopharmaceutical company, since April 2023. Dr. Himes received a B.A. in Chemistry from Pomona College in California and a Ph.D. in Chemical Engineering from the University of Minnesota. The determination was made that Dr. Himes should serve on our Board of Directors due to his extensive CMC and technical operations expertise, as well as his public company executive experience. Stuart Duty was a Senior Managing Director at Guggenheim Securities, LLC, a global investment and advisory financial services firm, from June 2012 to March 2023. Previously, he served as Managing Director, Co-Head, Healthcare Investment Banking at Piper Jaffray Companies, a global investment firm, from 2007 to 2012, as the Chief Operating Officer of Oracle Partners, L.P., a private healthcare focused investment fund, from 2002 to 2007, as Managing Director, Co-Head, Healthcare Investment Banking at Piper Jaffray, Inc., an global investment bank, from 1992 to 2002, as Managing Director, Healthcare Investment Banking at Montgomery Securities, an investment bank, from 1993 to 1999 and as the Director of Business Development at Curative Technologies, Inc., a biotherapeutics company, from 1992 to 1993. Mr. Duty has served on the board of directors of Eyepoint Pharmaceuticals, Inc. since October 2023. Mr. Duty holds a B.A. in Biochemistry from Occidental College and an M.B.A from Harvard Business School. The determination was made that Mr. Duty should serve on our Board of Directors due to his extensive experience in the banking and finance industry. Thomas B. King has served as an independent biotechnology consultant and advisor since August 2016. Mr. King has served on the board of directors of TFF Pharmaceuticals, Inc., a publicly-traded biopharmaceutical company since December 2023, as well as on the boards of directors of other privately held biotechnology companies. Mr. King served on the board of directors of Satsuma Pharmaceuticals, Inc., a biopharmaceutical company, from September 2017 to June 2023, when it was acquired by Shin Nippon Biomedical Laboratories, Ltd. Mr. King served as a member of the board of directors of VIVUS, Inc., a pharmaceutical company, from May 2017 to December 2020, and served as interim Chief Executive Officer from December 2017 to April 2018 and interim President from April 2018 to May 2018. Previously, Mr. King served as President, Chief Executive Officer and a member of the board of directors of Alexza Pharmaceuticals, Inc., a pharmaceutical company, from June 2003 until it was acquired by Grupo Ferrer in August 2016. From October 2015 to August 2016, Mr. King also served as Chief Financial Officer and Chief Accounting Officer of Alexza Pharmaceuticals, Inc. From September 2002 to April 2003 Mr. King served as President, Chief Executive Officer and a member of the board of directors of Cognetix, Inc., a biopharmaceutical development-stage company. From January 1994 to February 2001, Mr. King held various senior executive positions at Anesta Corporation, a pharmaceutical company, including President and Chief Operating Officer from January 1995 to January 1997 and President and Chief Executive Officer from January 1997 to October 2000. Mr. King received a B.A. in chemistry from McPherson College and an M.B.A. from the University of Kansas Graduate School of Business. The determination was made that Mr. King should serve on our Board of Directors due to his extensive leadership experience in the pharmaceutical and biopharmaceutical industry, including experience with small and large development stage pharmaceutical companies, and his experience on the boards of directors of both public and private companies.

  6. General

    Thomas Sellig has served as the Chief Executive Officer of Adare Pharmaceuticals, Inc., a global technology-driven Contract Development and Manufacturing Organization since January 2022. From July 2019 to October 2021, Mr. Sellig served as Chief Executive Officer of LabConnect, Inc., a clinical trial laboratory services organization. Prior to LabConnect, Inc., Mr. Sellig was Chief Commercial Officer at PSKW, LLC (doing business as ConnectiveRx) from September 2018 to July 2019. From November 2017 to August 2017, Mr. Sellig was Senior Vice President of Global Sales at Patheon N.V., and continued to serve as Senior Vice President of Global Sales at Themo Fisher Scientific Inc. following its acquisition of Patheon N.V. in August 2017. Previously, he served as the Global Vice President of Sales and Client Services from 2011 to 2014, and as the Vice President of Strategic Partnering/ Alliance Management from 2007 to 2011 at Covance, the drug development business of Laboratory Corporation of America Holdings, a contract research organization. Early in his career, Mr. Sellig had a variety of sales and marketing leadership roles at Procter & Gamble Company, a multinational consumer goods company, Wyeth, LLC (formerly American Home Products), a pharmaceutical company, and Ascent Pediatrics, Inc., a drug development company. Mr. Sellig received his B.A. in Economics from Vanderbilt University and an M.B.A. from New York University. The determination was made that Mr. Sellig should serve on our Board of Directors due to his global extensive experience in the life sciences and pharmaceutical services industries. Each of the standing committees of our Board of Directors has diverse representation. In addition, on our Board of Directors there are two directors who hold medical doctorates, two directors who holds a doctorate in scientific fields and four directors who hold a master’s degree in business administration. The table below provides certain highlights of the composition of our Board of Directors as of the date of this Proxy Statement, as reported by our directors. Each of the categories listed in the table below has the meaning set forth in The Nasdaq Stock Market LLC, or Nasdaq, Rule 5605(f).

  7. Board Diversity Matrix (as of April 10, 2024)

    Board Diversity Matrix (as of April 10, 2024)

  8. Board Diversity Matrix (as of April 10, 2024)

    | Board Size: | | | | | | Total Number of Directors: 8 | | | | | | | Female | Male | Non-Binary | Gender Undisclosed | | Gender: | | | | | | Number of Directors Based on Gender Identity | 2 | 5 | | 1 | | Number of Directors Who Identify in Any of the Categories Below: | | | | | | White | 2 | 5 | | | | Demographic Background Undisclosed | | | | 1 |

  9. Director Independence

    Director Independence Our Board of Directors has determined that Dr. Himes, Dr. Martell, Mr. Duty, Mr. King and Mr. Sellig, are “independent” under the applicable Securities and Exchange Commission, or the SEC, rules and the criteria established by Nasdaq. Donald Joseph, Martin Mattingly and Jay Moyes did not stand for re-election at the 2023 annual meeting of stockholders. While serving on the Board of Directors it was determined that Mr. Joseph, Dr. Mattingly and Mr. Moyes, were also “independent” under the applicable SEC rules and the criteria established by Nasdaq.

  10. Relationships Among Directors, Executive Officers and Director Nominees

    Relationships Among Directors, Executive Officers and Director Nominees There are no family relationships among any of our directors, executive officers or director nominees.

  11. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS

  12. Director Compensation Overview

    Director Compensation Overview The charter of the Compensation Committee provides that the Compensation Committee is to recommend to the Board of Directors matters related to director compensation. The director compensation package for non-employee directors consists of annual cash compensation and stock options exercisable to purchase shares of our common stock. None of our employees who also serve as directors are entitled to receive compensation for service as a director. Therefore, Richard Stewart, John Bencich and Cindy Jacobs receive no compensation for their service as a director. Our director compensation policy for fiscal year 2023 is set forth below under the heading “Director Compensation Policy – 2023 Director Compensation.”

  13. Director Compensation Policy

    Director Compensation Policy 2023 Director Compensation As part of its evaluation of compensation levels for the 2023 fiscal year, the Compensation Committee recommended and the Board of Directors approved, the retention of Aon to review compensation levels of our independent directors and committee members. Aon was instructed to benchmark and make recommendations regarding the annual retainer amounts for directors and chairpersons of the Board of Directors and the various committees, as well as the amounts and terms of initial and annual long-term equity incentive awards for directors. On recommendation by Aon in 2023, the equity compensation and cash compensation for non-employee directors in connection with their service on the Board of Directors in 2023 is as follows: An annual retainer of $60,000 was paid to the Lead Independent Director and $40,000 was paid to all other non-employee directors. These retainers were paid in quarterly installments. Each quarterly payment was conditioned on the director remaining a director on the date of actual payment, which was typically within 10 days following the completion of the respective calendar quarter. Retainers are pro-rated for the portion of the year during which a director was on the Board of Directors. Additional annual cash compensation for the chairpersons and members of each committee as set forth in the following table and paid on the same schedule and on the same terms as the non-employee director compensation described above:

  14. Director Compensation Policy

    | | Chairperson | Other Members | | Audit Committee | $15,000 | $7,500 | | Compensation Committee | $10,000 | $5,000 | | Nominating and Governance Committee | $7,500 | $3,500 | | Chemistry, Manufacturing and Controls Committee | $12,500 | $6,000 |

  15. Director Compensation Policy

    • Any new director would have received a one-time initial grant of stock options to acquire 47,250 shares of our common stock upon becoming a director, which would vest monthly over three years from the date of grant, subject to continued service as a director. • Each director that is re-elected by our stockholders at an annual meeting receives a grant of stock options to acquire 31,500 shares of common stock. Each annual stock option vests in full on the earlier of the first anniversary of the date of grant or the date immediately prior to our next annual meeting of stockholders. Director Compensation Paid for 2023 The following table summarizes all compensation paid or awarded to non-employee directors who served during 2023 as compensation for board service during the 2023 fiscal year. Messrs. Duty, King and Sellig were appointed to our Board of Directors in March 2023 and Donald Joseph, Martin Mattingly and Jay Moyes did not stand for re-election at the 2023 annual meeting of stockholders.

  16. Director Compensation Policy

    | | Fees Earned or Paid in Cash | Option Awards | Total | | Name | ($) | ($)(1)(2) | ($) | | Stuart Duty | 40,778 | 229,820 | 270,598 | | Vaughn Himes | 55,319 | 140,496 | 195,815 | | Donald Joseph(3) | 34,889 | — | 34,889 | | Thomas B. King | 51,531 | 229,820 | 281,351 | | Bridget Martell | 58,255 | 140,496 | 198,751 | | Martin Mattingly(3) | 26,602 | — | 26,602 | | Jay Moyes(3) | 25,512 | — | 25,512 | | Thomas Sellig | 39,929 | 229,820 | 269,749 |

  17. Director Compensation Policy

    (1) The dollar amounts reflect the aggregate grant date fair value of equity awards granted within the fiscal year in accordance with the Financial Accounting Standards Board, or FASB, Accounting Standards Codification Topic 718 for stock-based compensation. These amounts do not correspond to the actual cash value that will be recognized by the directors when received. Assumptions used in the calculation of the amounts in this column are included in note 11 to our audited consolidated financial statements included in our 2023 Annual Report on Form 10-K. As of December 31, 2023, the following directors had the following number of options outstanding: • Stuart Duty: 47,250 options, of which 11,813 were vested as of December 31, 2023. • Vaughn Himes: 31,500 options, and none were vested as of December 31, 2023. • Thomas B. King: 47,250 options, of which 11,813 were vested as of December 31, 2023. • Bridget Martell: 31,500 options, and none were vested as of December 31, 2023. • Thomas Sellig: 47,250 options, of which 11,813 were vested as of December 31, 2023. • Donald Joseph: 10,282 options vested as of December 31, 2023. • Martin Mattingly: 10,269 options vested as of December 31, 2023. • Jay Moyes: 10,282 options vested as of December 31, 2023. (2) These options were granted on March 29, 2023 to each of Messrs. Duty, King and Sellig with an aggregate of 72,000 options granted under our 2018 Equity Incentive Plan and an aggregate of 69,750 options granted under our 2023 Non-Employee Director Equity Incentive Plan. These options vest in monthly installments over 36 months. The options granted to Drs. Martell and Himes were granted on June 7, 2023 under our 2023 Non-Employee Director Equity Incentive Plan and vest 100% on June 4, 2024. (3) Each of Mr. Joseph, Dr. Mattingly and Mr. Moyes did not stand for re-election at the 2023 annual meeting of stockholders. The Board of Directors unanimously recommends that stockholders vote “FOR all” nominees FOR THE BOARD OF DIRECTORS.

  18. Summary Compensation Table

    Summary Compensation Table The following table sets forth information regarding the compensation of our Named Executive Officers for each of the fiscal years ended December 31, 2023 and 2022. The components of the compensation reported in the Summary Compensation Table are described below.

  19. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | Total ($) | | John Bencich, | 2023 | 530,000 | 490,000 | 426,207 | 251,750 | 1,697,957 | | Chief Executive Officer | 2022 | 510,000 | 413,000 | 358,670 | 223,125 | 1,504,795 | | Richard Stewart, | 2023 | 450,000(4) | 367,500 | 319,655 | 213,750 | 1,350,905 | | Executive Chairman | 2022 | 400,000 | 371,700 | 322,803 | 175,000 | 1,269,503 | | Cindy Jacobs, | 2023 | 473,000 | 294,000 | 255,724 | 179,740 | 1,202,464 | | President and Chief Medical Officer | 2022 | 455,000 | 268,450 | 233,135 | 159,250 | 1,115,835 |

  20. Summary Compensation Table

    (1) The dollar amounts in this column reflect the aggregate grant date fair value of performance-based restricted stock units granted during the fiscal year in accordance with FASB Accounting Standards Codification Topic 718 for stock-based compensation, based upon the probable outcome of the performance conditions as of the grant date. These amounts do not correspond to the actual cash value that will be recognized by each of the Named Executive Officers when received. (2) The dollar amounts in this column reflect the aggregate grant date fair value of stock option agreements granted during the fiscal year in accordance with FASB Accounting Standards Codification Topic 718 for stock-based compensation. These amounts do not correspond to the actual cash value that will be recognized by each of the Named Executive Officers when received. For a discussion of the assumptions and methodologies used to value the awards reported in this column, see note 11 to our audited consolidated financial statements, which are included in our 2023 Annual Report on Form 10-K. (3) The dollar amounts in this column reflect the aggregate non-equity incentive plan compensation earned by each Named Executive Officer in 2023 and paid in early 2024. For more information, see “—2023 Bonuses” below. (4) Mr. Stewart’s salary was increased to $450,000 as of July 1, 2023.

  21. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End The following table provides information regarding the outstanding equity awards held by the Named Executive Officers as of December 31, 2023.

  22. 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 | Option Exercise Price ($) | Option Expiration Date | Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) | Market Value of Unearned Shares, Units, or Other Rights that Have Not Vested ($) | Number of Shares or Units or Other Rights that Have Not Vested(#) | Market Value of Shares or Units or Other Rights that Have Not Vested ($) | | John Bencich, | 18 | — | 6,974.00 | 08/12/24(1) | — | — | — | — | | Chief Executive | 11 | — | 4,092.00 | 05/19/25(2) | — | — | — | — | | Officer | 1,370 | — | 578.00 | 08/01/27(3) | — | — | — | — | | | 1,250 | — | 67.40 | 07/26/28(4) | — | — | — | — | | | 2,500 | — | 51.20 | 09/20/28(5) | — | — | — | — | | | 1,500 | — | 28.40 | 01/29/29(6) | — | — | — | — | | | 500 | — | 28.40 | 01/29/29(7) | — | — | — | — | | | 9,792 | 208 | 11.20 | 01/28/30(8) | — | — | — | — | | | 20,000 | — | 10.36 | 11/16/30(9) | — | — | — | — | | | 43,750 | 16,250 | 13.09 | 01/26/31(10) | — | — | — | — | | | 31,944 | 18,056 | 8.26 | 01/03/32(11) | — | — | — | — | | | — | 100,000 | 4.90 | 01/25/33(12) | — | — | — | — | | | — | — | — | — | — | — | 25,000(13) | 103,000 | | | — | — | — | — | 100,000(14) | 412,000 | — | — | | Richard Stewart, | 2,600 | — | 67.40 | 07/26/28(4) | — | — | — | — | | Executive | 5,050 | — | 51.20 | 09/20/28(5) | — | — | — | — | | Chairman | 3,750 | — | 28.40 | 01/29/29(6) | — | — | — | — | | | 1,250 | — | 28.40 | 01/29/29(7) | — | — | — | — | | | 22,032 | 468 | 11.20 | 01/28/30(8) | — | — | — | — | | | 15,000 | — | 10.36 | 11/16/30(9) | — | — | — | — | | | 36,458 | 13,542 | 13.09 | 01/26/31(10) | — | — | — | — | | | 28,750 | 16,250 | 8.26 | 01/03/32(11) | — | — | — | — | | | — | 75,000 | 4.90 | 01/25/33(12) | — | — | — | — | | | — | — | — | — | — | — | 22,500(13) | 92,700 | | | — | — | — | — | 75,000(14) | 309,000 | — | — | | Cindy Jacobs, | 11 | — | 25,938.00 | 03/14/24(15) | — | — | — | — | | President and | 17 | — | 4,092.00 | 05/19/25(2) | — | — | — | — | | Chief Medical | 1,370 | — | 578.00 | 08/01/27(3) | — | — | — | — | | Officer | 1,000 | — | 67.40 | 07/26/28(4) | — | — | — | — | | | 1,850 | — | 51.20 | 09/20/28(5) | — | — | — | — | | | 1,500 | — | 28.40 | 01/29/29(6) | — | — | — | — | | | 500 | — | 28.40 | 01/29/29(7) | — | — | — | — | | | 9,792 | 208 | 11.20 | 01/28/30(8) | — | — | — | — | | | 12,000 | — | 10.36 | 11/16/30(9) | — | — | — | — | | | 21,875 | 8,125 | 13.09 | 01/26/31(10) | — | — | — | — | | | 20,764 | 11,736 | 8.26 | 01/03/32(11) | — | — | — | — | | | — | 60,000 | 4.90 | 01/25/33(12) | — | — | — | — | | | — | — | — | — | — | — | 16,250(13) | 66,950 | | | — | — | — | — | 60,000(14) | 247,200 | — | — |

  23. Outstanding Equity Awards at Fiscal Year-End

    (1) These stock options were granted under the 2010 Performance Incentive Plan and were fully vested on August 12, 2018. (2) These stock options were granted under the 2010 Performance Incentive Plan and were fully vested on January 1, 2019. (3) These stock options were granted under the 2017 Equity Incentive Plan and were fully vested on August 15, 2021. (4) These stock options were granted under the 2017 Equity Incentive Plan and were fully vested on July 26, 2022. (5) These stock options were granted under the 2018 Equity Incentive Plan and were fully vested on September 20, 2022. (6) These stock options were granted under the 2018 Equity Incentive Plan and were fully vested on January 29, 2023. (7) These stock options were granted under the 2018 Equity Incentive Plan and vested on June 12, 2021. (8) These stock options were granted under the 2018 Equity Incentive Plan and vested as to 25% on January 28, 2021 and then vest monthly over a 36-month period. (9) These stock options were granted under the 2018 Equity Incentive Plan and were fully vested on June 30, 2023. (10) These stock options were granted under the 2018 Equity Incentive Plan and vested as to 25% on January 26, 2022 and then vest monthly over a 36-month period. (11) These stock options were granted under the 2018 Equity Incentive Plan and vested as to one-third on January 3, 2023 and then vest monthly over a 24-month period. These stock options were granted under the 2018 Equity Incentive Plan and vested as to one-third on January 25, 2024 and then vest monthly over a 24-month period. These PSUs were granted under the 2018 Equity Incentive Plan and vested as to 50% on the achievement of the positive Phase 3 ORCA-3 or ORCA-V1 data results and the remaining 50% will vest on the first anniversary of the achievement. These PSUs were granted under the 2018 Equity Incentive Plan and vest as to 50% on the achievement of the filing of a NDA, for cytisinicline with the FDA, by a certain time, and 50% upon FDA acceptance of the NDA within 60 days of submission; or 100% upon either marketing approval of cytisinicline by FDA or acquisition of the company occurring by a certain time. (15) These stock options were granted under the 2010 Performance Incentive Plan and were fully vested on January 1, 2018.

  24. Pay versus Performance

    Pay versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following disclosure regarding executive compensation for our principal executive officers, or PEOs and our other NEOs, or Non-PEO NEOs and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown. The Compensation Committee undertakes to maintain an overall compensation structure designed to attract, retain and motivate management and employees by providing appropriate incentives based on individual contribution and performance and avoiding undue emphasis on short-term market value. The amounts shown for “Compensation Actually Paid” have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs; these amounts reflect the Summary Compensation Table total with certain adjustments as described in the following table and footnotes.

  25. Pay versus Performance

    | Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO (3) | Average Summary Compensation Table Total for Non-PEO NEOs(2) | Average Compensation Actually Paid to Non-PEO NEOs | Value of Initial Fixed $100 Investment Based on Total Shareholder Return(4) | Net Income/(Loss) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | | 2023 | $1,697,957 | $1,635,000 | $1,276,685 | $1,236,370 | $50.86 | $(29,815,000) | | 2022 | $1,504,795 | $1,069,416 | $1,192,669 | $861,361 | $30.25 | $(42,350,000) | | 2021 | $1,611,883 | $1,387,673 | $1,194,763 | $1,044,198 | $96.05 | $(33,152,000) |

  26. Pay versus Performance

    (1) John Bencich was our PEO in 2021, 2022 and 2023; he has been our Chief Executive Officer since September 2020. (2) Richard Stewart and Cindy Jacobs were our Non-PEO NEOs in 2021, 2022 and 2023. (3) Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards and Option Awards columns are the totals from the Stock Awards and Option Awards columns set forth in the Summary Compensation Table. (4) Represents the cumulative total return on $100 invested in the Company’s common stock as of the last day of public trading of the Company’s common stock in fiscal year 2020 through the last day of public trading of the Company’s common stock in the applicable fiscal year for which the cumulative total return is reported.

  27. Pay versus Performance

    | Year | Summary Compensation Table Total for PEO ($) | Exclusion of Stock Awards and Option Awards for PEO ($) | Inclusion of Equity Values for PEO ($) | Compensation Actually Paid to PEO ($) | | 2023 | $1,697,957 | $(916,207) | $853,250 | $1,635,000 | | 2022 | $1,504,795 | $(771,670) | $336,291 | $1,069,416 | | 2021 | $1,611,883 | $(844,633) | $620,423 | $1,387,673 |

  28. Pay versus Performance

    | 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 | $1,276,685 | $(618,440) | $578,125 | $1,236,370 | | 2022 | $1,192,669 | $(598,044) | $266,736 | $861,361 | | 2021 | $1,194,763 | $(530,363) | $379,798 | $1,044,198 |

  29. Pay versus Performance

    The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:

  30. Pay versus Performance

    | Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for PEO ($) | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for PEO ($) | Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for PEO ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for PEO ($) | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for PEO ($) | Total - Inclusion of Equity Values for PEO ($) | | 2023 | $740,911 | $(8,318) | $— | $120,657 | $— | $853,250 | | 2022 | $413,664 | $(89,088) | $— | $11,716 | $— | $336,291 | | 2021 | $687,911 | $(63,630) | $— | $(3,858) | $— | $620,423 |

  31. Pay versus Performance

    | Year | Average Year- End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non- PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) | Average Vesting- Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non-PEO NEOs ($) | Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non- PEO NEOs ($) | Total - Average Inclusion of Equity Values for Non-PEO NEOs ($) | | 2023 | $500,115 | $(3,409) | $— | $81,419 | $— | $578,125 | | 2022 | $320,590 | $(57,034) | $— | $3,180 | $— | $266,736 | | 2021 | $439,257 | $(53,472) | $— | $(5,988) | $— | $379,798 |

  32. Pay Versus Performance Table

    Pay Versus Performance Table The illustrations below provide a graphical description of compensation actually paid (as calculated in accordance with the SEC rules) and the following measures: (i) our cumulative total shareholder return, or TSR; and (ii) our net income/(loss). Compensation Actually Paid and TSR As shown in the following graph, the compensation actually paid to Mr. Bencich and the average amount of compensation actually paid to our named executive officers as a group during the periods presented are negatively correlated. We do utilize several performance measures to align executive compensation with our performance, but those tend not to be financial performance measures, such as TSR. For example, part of the compensation our named executive officers are eligible to receive consists of annual performance-based cash bonuses which are designed to provide appropriate incentives to our executives to achieve defined annual corporate goals and to reward our executives for individual achievement towards these goals. Additionally, we view stock options, which are an integral part of our executive compensation program, as related to company performance although not directly tied to TSR, because they provide value only if the market price of our common stock increases, and if the executive officer continues in our employment over the vesting period. These stock option awards strongly align our executive officers’ interests with those of our stockholders by providing a continuing financial incentive to maximize long-term value for our stockholders and by encouraging our executive officers to continue in our employment for the long-term. Compensation Actually Paid and Net Income/(Loss) Because we are not a commercial-stage company, we did not have any revenue during the periods presented and our company has not historically looked to net income (loss) as a performance measure for our executive compensation program.

  33. Potential Payments Upon Termination/Change of Control

    Potential Payments Upon Termination/Change of Control