DEF 14A of Heron Therapeutics, Inc. /De/, Apr 30, 2025

DEF 14A of Heron Therapeutics, Inc. /De/

Filed Apr 30, 2025 · FY20240000950170-25-060882

Open on EDGAR

  1. INFORMATION CONCERNING THE BOARD OF DIRECTORS

    INFORMATION CONCERNING THE BOARD OF DIRECTORS Certain information regarding each of our director nominees, including each nominee’s age, experience, qualifications, attributes and skills that led the Board to conclude that the individual should serve on the Board and each nominee’s principal occupation and directorships during the past five years, is set forth below:

  2. INFORMATION CONCERNING THE BOARD OF DIRECTORS

    | Name | Age | Position | Director Since | | Craig Collard | 59 | Chief Executive Officer and Director | 2023 | | Sharmila Dissanaike, M.D., FACS, FCCM | 50 | Director | 2021 | | Craig Johnson | 63 | Director | 2014 | | Michael Kaseta | 49 | Director | 2024 | | Adam Morgan | 46 | Chairman of the Board | 2023 | | Christian Waage | 58 | Director | 2016 |

  3. INFORMATION CONCERNING THE BOARD OF DIRECTORS

    Susan Rodriguez is not standing for re-election at the Annual Meeting. She currently serves on the Compensation and Nominating and Corporate Governance Committees of the Board. Craig Collard has served as a director of Heron since February 2023 and as Chief Executive Officer since April 2023. Mr. Collard most recently served as the Chief Executive Officer of Veloxis Pharmaceutics A/S (now Veloxis Pharmaceuticals Inc., “Veloxis”) before it was acquired by Asahi Kasei Corp, a transplant focused pharmaceutical company with its principal office in Cary, North Carolina, from 2015 to December 2021. Prior to joining Veloxis, Mr. Collard served as the Chief Executive Officer and the Chairman of the Board of Directors of Cornerstone Therapeutics, Inc., a pharmaceutical company (“Cornerstone”), from 2011 until it was acquired by Chiesi Farmaceutici S.p.A. (“Chiesi”) in 2014. Mr. Collard also served as Cornerstone’s Interim Chief Financial Officer, from 2010 to 2011, and as its President, from 2008 to 2011. Mr. Collard served as the Founder, President and Chief Executive Officer of Cornerstone BioPharma Inc. (formerly Cornerstone BioPharma Holdings, Ltd.), a pharmaceutical company, and as a member of its board of directors, from 2004 to 2008. Prior to that, Mr. Collard served as President and Chief Executive Officer of Carolina Pharmaceuticals, Inc., a specialty pharmaceutical company that he founded in 2003. Mr. Collard has served on the board of directors of TerrAscend Corp. (TSX: TSND), a North American cannabis operator based in Mississauga, Canada ("TerrAscend"), since December 2018. Mr. Collard previously served as a member of the board of directors of Sierra Oncology, Inc., a San Mateo, California-based late-stage biopharmaceutical company acquired by GlaxoSmithKline plc, from May 2020 to July 2022. He also served as Chairman of Opiant Pharmaceuticals, Inc., a specialty pharmaceutical company in Santa Monica, California developing therapies to treat substance and use disorders and drug overdose since October 2018 until it was acquired by Indivior on March 1, 2023. Mr. Collard holds a B.S. degree in engineering from the Southern College of Technology (now Southern Polytechnic State University). Mr. Collard was initially appointed as a director of the Company pursuant to a Cooperation Agreement, dated as of February 21, 2023 (the ‘‘Cooperation Agreement”), by and between the Company, Rubric Capital Management LP and certain of its affiliates and Velan Capital Investment Management LP and certain of its affiliates, regarding changes to the composition of the Board and other related matters. The Board has concluded that Mr. Collard should serve as a director based on his experience in senior management, commercial operations, and as a director with other biotechnology and pharmaceutical companies. Sharmila Dissanaike, M.D., FACS, FCCM has served as a director of Heron since September 2021. Dr. Dissanaike is currently the Chair of Surgery at the University of New Mexico, Albuquerque, NM. Dr. Dissanaike was previously University Distinguished Professor and Peter C. Canizaro Chair of the Department of Surgery at Texas Tech University Health Sciences Center (“TTUHSC”) since 2016. In addition, from 2015 to 2018, Dr. Dissanaike served as Interim Director of the Timothy J. Harnar Burn Center at University Medical Center in Lubbock, Texas (“UMC”). From 2014 to 2017, Dr. Dissanaike served as Trauma Medical Director of the John A. Griswold Level 1 Trauma Center at UMC. In January 2021, she was appointed to the Texas Medical Board by Governor Greg Abbott. Dr. Dissanaike is a clinically active trauma, burn and acute care surgeon who has won over 50 awards for clinical, academic and research excellence and service during her career. Dr. Dissanaike has published over 100 peer-reviewed scientific articles, in addition to numerous book chapters, peer-reviewed presentations and national and international invited lectureships. Dr. Dissanaike holds multiple national leadership and quality assurance roles including Chair of the American Burn Association Verification Committee, member of the American College of Surgeons Trauma Verification Committee and Committee on Trauma, and Board member of each of the American Burn Association and Southwestern Surgical Congress. She serves the American College of Surgeons as Governor and on the Committee for Ethics, the Advisory Council of Rural Surgery and Program Committee, highlighting her wide array of interests and longstanding dedication to advancing all aspects of surgical care. Dr. Dissanaike received her medical degree from the University of Sydney, Australia and her undergraduate degree from Methodist College in Colombo, Sri Lanka. Dr. Dissanaike completed her postgraduate medical training at the University of Washington at Harborview Medical Center, the Department of Surgery at TTUHSC, the Department of Surgery at Albert Einstein College of Medicine at Beth Israel Medical Center and the Department of Medicine at Inverclyde Hospital, National Health Service. The Board has concluded that Dr. Dissanaike should serve as a director based on her experience and achievements in surgical medicine. Craig Johnson has served as a director of Heron since 2014. Mr. Johnson has more than 30 years of experience serving in senior financial management roles and governing corporations in the biotechnology industry. He has served as a director of Aurina Pharmaceuticals Inc. since 2024.Mr. Johnson previously served as a director of Mirati Therapeutics, Inc. from 2013 until its acquisition by Bristol Myers Squibb in 2024, and as a director of La Jolla Pharmaceutical Company from 2013 until its acquisition by Innoviva, Inc. in 2022. He served as a director of Odonate Therapeutics, Inc. from 2017 to 2022, as a director of Decipher Biosciences, Inc. from 2015 to 2018, and as a director of Adamis Pharmaceuticals Corporation from 2011 to 2014. Mr. Johnson served as a director of Ardea Biosciences, Inc. from 2008 until its acquisition by AstraZeneca PLC in 2012. He served as Vice President and Chief Financial Officer of TorreyPines Therapeutics, Inc. from 2004 until its sale to Raptor Pharmaceuticals Corp. in 2009, and then as Vice President of a wholly owned subsidiary of Raptor Pharmaceutical Corp. from 2009 to 2010. From 1994 to 2004, Mr. Johnson held various positions at MitoKor, Inc., concluding his service as Chief Financial Officer and Senior Vice President of Operations. He practiced as a Certified Public Accountant with Price Waterhouse, and he received a B.B.A. degree in accounting from the University of Michigan-Dearborn. Our Board has concluded that Mr. Johnson should serve as a director based on his experience serving as a director of biotechnology companies and his expertise in financial management.

  4. INFORMATION CONCERNING THE BOARD OF DIRECTORS

    Michael Kaseta has served as a director of Heron since November 2024. He currently serves as the Chief Financial Officer and Chief Operating Officer of Liquidia Corporation, a biopharmaceutical company developing innovative therapies for patients with rare cardiopulmonary diseases ("Liquidia"). Prior to Liquidia, Mr. Kaseta served as the Chief Financial Officer at Aerami Therapeutics, Inc., a private biotech company focused on the development of improved therapies for the treatment of severe respiratory diseases, including pulmonary arterial hypertension, from January 2019 to November 2020. Previously, Mr. Kaseta served as the Chief Financial Officer at Aralez Pharmaceuticals, Inc., (Nasdaq: ARLZ) ("Aralez"), from March 2018 to January 2019. Mr. Kaseta previously served as Head of Finance and Interim Chief Financial Officer of Aralez from November 2017 until March 2018 and Corporate Controller of Aralez from September 2016 until November 2017. Prior to Aralez, Mr. Kaseta spent eleven years at Sanofi S.A. in a variety of financial roles, culminating in the Chief Financial Officer role at Sanofi North America, Global Services. In this role he managed a $10 billion business covering several product launches and more than 100 products across eight therapeutic areas. Mr. Kaseta holds a B.B.A degree in accounting from James Madison University, is a CPA (inactive) licensed in the state of New Jersey, and serves as a director of Bryn Pharma. Our Board has concluded that Mr. Kaseta should serve as a director based on his experience serving in various financial roles and as a director of pharmaceutical and biotechnology companies. Adam Morgan has served as a director of Heron since February 2023 and as Chairman of the Board since April 2023. Mr. Morgan has served as the Chief Investment Officer of Velan Capital Investment Management LP, a healthcare-dedicated investment firm based in Alpharetta, Georgia, since July 2020. Mr. Morgan has also served on the board of directors of Health Outlook Corporation, a privately-held developer of predictive healthcare technology and service based in New York, New York, where he serves as chair of the company's audit committee, since January 2023. Previously, Mr. Morgan served on the board of directors of Alimera Sciences, Inc. (formerly NASDAQ: ALIM), a biopharmaceutical company, from March 2023 until its merger with ANI Pharmaceuticals, Inc. in September 2024. Prior to that, Mr. Morgan served as Senior Analyst at Broadfin Capital, LLC, a healthcare dedicated investment firm based in New York, New York, where he covered the Biotech and Pharmaceutical sectors, from 2018 to June 2020, and as Senior Analyst at Iguana Healthcare Partners LLC, a healthcare-dedicated investment firm based in New York, New York, where he covered Medical Devices and Specialty Pharmaceuticals, from 2015 to 2018. Mr. Morgan also served as an Analyst at Pura Vida Investments, LLC, a healthcare-focused investment firm, where he covered global Medical Devices, from 2014 to 2015. Earlier in his career, Mr. Morgan served as a Research Associate at Cowen and Company (a subsidiary of Cowen Inc.), a financial services company, on the firm's Medical Supplies and Devices team, in 2014. Mr. Morgan received his B.S. degree in chemistry from the University of Minnesota and his M.B.A. degree from the Carlson School of Management at the University of Minnesota. Mr. Morgan was initially appointed as a director of the Company pursuant to the Cooperation Agreement. The Board has concluded that Mr. Morgan should serve as a director based on extensive investment experience and operational background focused on the healthcare and biotechnology sectors as well as his corporate governance expertise. Christian Waage has served as a director of Heron since 2016. Mr. Waage has more than 15 years of regulatory, legal and financial transaction experience, primarily in the biotechnology industry. Mr. Waage currently serves as Executive Vice President, Technical Operations and Administration of Gossamer Bio, Inc. (“Gossamer Bio”), a publicly traded biotechnology company, and previously served as Gossamer Bio’s Executive President and General Counsel from 2017 to 2024. From 2013 to 2016, Mr. Waage held various positions at Receptos, Inc., a wholly owned subsidiary of Celgene Corporation, most recently serving as Managing Director. Prior to its acquisition by Celgene Corporation in 2015, he served as Senior Vice President and General Counsel of Receptos, Inc. From 2012 through its acquisition by Vista Equity Partners Management, LLC in 2013, Mr. Waage served as Vice President, General Counsel and Corporate Secretary at Websense, Inc. From 2008 through its acquisition by AstraZeneca PLC in 2012, he served as Vice President, General Counsel and Corporate Secretary of Ardea Biosciences, Inc. Prior to 2008, Mr. Waage served as a partner at DLA Piper LLP. He received a J.D. degree from the University of San Diego School of Law and a B.A. degree in economics from the University of California, San Diego. The Board has concluded that Mr. Waage should serve as a director based on his experience in regulatory, legal and finance matters.

  5. Equity-Based Compensation (shares underlying awards)

    | Directors (4) | Fees Earned or Paid in Cash | Stock Awards (2), (3), (4) | Option Awards (2), (3), (4) | Total | | Sharmila Dissanaike, M.D., FACS, FCCM | $66,250 | $29,151 | $57,099 | $152,500 | | Craig Johnson | $73,750 | $29,151 | $57,099 | $160,000 | | Michael Kaseta (1) | $9,370 | $67,425 | $247,110 | $323,905 | | Adam Morgan | $80,000 | $29,151 | $57,099 | $166,250 | | Susan Rodriguez | $67,500 | $29,151 | $57,099 | $153,750 | | Christian Waage | $69,375 | $29,151 | $57,099 | $155,625 |

  6. Equity-Based Compensation (shares underlying awards)

    Mr. Kaseta was appointed as a member of the Board effective November 4, 2024, and his cash compensation was prorated for his partial year of service. These columns reflect the aggregate grant date fair value of equity awards granted in 2024 and calculated in accordance with FASB ASC Topic 718, excluding the effects of estimated forfeitures. The assumptions used are included in our Annual Report on Form 10-K for the year ended December 31, 2024. Initial option awards vest monthly over a four-year period from the date of grant. Initial stock awards vest quarterly over a four-year period from the date of grant. Annual option awards vest monthly over a one-year period from the date of grant (which was January 19, 2024). Annual stock awards vest after one year from the date of grant (which was January 19, 2024). Mr. Kaseta received his initial awards (which was granted on November 4, 2024) and did not receive annual awards. All the other non-employee directors received annual awards. The aggregate number of shares subject to outstanding stock options held by each director listed in the table above as of December 31, 2024 was as follows: 219,248 shares for Dr. Dissanaike, 355,748 shares for Mr. Johnson, 227,272 shares for Mr. Kaseta, 310,957 shares for Mr. Morgan, 219,248 shares for Ms. Rodriguez and 295,023 shares for Mr. Waage. In addition, the shares subject to outstanding unvested restricted stock units as of December 31, 2024 was as follows: 15,120 shares for Dr. Dissanaike, 13,948 shares for Mr. Johnson, 37,879 shares for Mr. Kaseta, 35,255 shares for Mr. Morgan, 15,120 shares for Ms. Rodriguez and 13,948 shares for Mr. Waage.

  7. Executive Summary

    | WHAT WE DO | | | ✓ | Performance-based cash and equity incentive compensation | | ✓ | Caps on performance-based cash and equity incentive compensation | | ✓ | Significant portion of Named Executive Officer compensation at risk based on company performance | | ✓ | Multi-year equity award vesting periods for equity awards, including four-year performance periods for performance-based equity awards | | ✓ | One-year minimum vesting requirement under equity incentive plan, with limited exceptions | | ✓ | Annual review and approval of our Named Executive Officer compensation program | | ✓ | Annual compensation risk assessment | | ✓ | Annual “Say On Pay” vote | | ✓ | Clawback policy on certain cash and equity incentive compensation | | ✓ | Independent compensation consultant engaged by the Compensation Committee | | ✓ | 100% independent directors on the Compensation Committee | | ✓ | No perquisites |

  8. Executive Summary

    | WHAT WE DON’T DO | | | × | No gross-ups for change of control related excise tax payments | | × | No short sales, hedging, or transactions in derivative securities relating to our common stock | | × | No strict benchmarking of Named Executive Officer compensation to a specific percentile of our compensation peer group | | × | No pension benefits | | × | No dividend payments on unvested awards | | × | No ‘repricing’ of out-of-the-money stock options without shareholder approval | | × | No incentivizing unnecessary or excessive risk taking | | × | No employment agreements with Named Executive Officers that provide for a guaranteed term of employment |

  9. Principles

    Principles The objectives of our Named Executive Officer compensation program are to: • Align the interests of Named Executive Officers with the long-term success of the business, our shareholders, and other stakeholders • Attract, develop, retain, and motivate Named Executive Officers to drive our business and financial performance • Link a significant amount of Named Executive Officer compensation to achievement of pre-established financial metrics and business goals that are directly tied to our overall business strategy In evaluating the competitiveness of our Named Executive Officer compensation program, we compare it against the programs of peers in related industries at a similar stage of development and comparable financial profile. We also evaluate broader size-appropriate comparisons within the biotechnology and pharmaceutical industries. More information about our use of peer group data is provided below. Our compensation philosophy also recognizes the need for flexibility based on experience, scope of position, critical skills, and individual/corporate performance. We consider compensation data from our compensation peer group as one of several factors that informs our judgment of appropriate parameters for compensation levels. We do not strictly benchmark compensation to a specific percentile of our compensation peer group, nor do we apply a formula or assign relative weightings to specific compensation elements. We believe that over-reliance on benchmarking can result in compensation that is unrelated to the value delivered by our Named Executive Officers because it does not take into account the specific performance of the Named Executive Officers, the relative size, growth, and performance of the Company, or any unique circumstances or strategic considerations of the Company. In evaluating and determining Named Executive Officer compensation, the Compensation Committee also considers the results of our most recent Say-on-Pay vote and other feedback from our shareholders.

  10. Role of the Compensation Consultant

    Role of the Compensation Consultant The Compensation Committee has the authority, in its sole discretion, to engage any compensation consultant to assist in the evaluation of Named Executive Officer compensation, and has the authority to approve the consultant’s fees. Prior to retaining any such consultant, the Compensation Committee conducts an analysis of such consultant’s independence pursuant to the Nasdaq rules. The Compensation Committee may also commission various compensation studies it deems appropriate. The Compensation Committee is directly responsible for the appointment, compensation and oversight of the work of any compensation consultant. At least annually, the Compensation Committee assesses whether the work of any compensation consultant involved in determining or recommending Named Executive Officer compensation has raised any conflict of interest that is required to be disclosed in the Company’s annual report and proxy statement. In 2024, the Compensation Committee engaged the services of Compensia, a national independent compensation advisory firm that has extensive experience with biotechnology companies and specializes in executive compensation. The directive for Compensia during 2024 was to assist the Compensation Committee in its review of executive and director compensation practices, including the competitiveness of pay levels, executive compensation design and review and analysis of competitive market data with respect to the Company’s peers in the industry. The Compensation Committee has the final authority to engage and terminate services for consultants it may utilize. The decision to engage Compensia was not made or recommended by our management, and Compensia did not provide any services to us outside of its services to the Compensation Committee. The Compensation Committee, after a review of the factors set forth in the rules of the SEC and the listing standards of The Nasdaq Stock Market, determined that the work performed by Compensia did not present any conflicts of interest.

  11. Peer Group

    Peer Group The Compensation Committee reviews and considers the compensation levels and practices of a group of peer companies. When our Named Executive Officers were hired in 2023, competitive market analysis against a peer group was used as a factor in determining their compensation packages. The Compensation Committee determined to use the same peer group for 2024 compensation decisions given the proximity of the 2024 compensation review to the 2023 Named Executive Officer compensation decisions. These peer companies were evaluated and selected based on various comparability factors, such as they were in a comparable industry, had comparable revenue or market capitalizations, or competed with the Company for executive talent. While we do not establish compensation levels based solely on comparative data, pay practices at other companies are an important factor that are considered in assessing the reasonableness of compensation and ensuring that our compensation practices are competitive in the marketplace. The 17 companies in the compensation peer group are listed below:

  12. Peer Group

    | Aeri Pharmaceuticals (AERI) | Intercept Pharmaceuticals (ICPT) | | Albireo Pharma (ALBO) | Karyopharm Therapeutics (KPTI) | | Coherus BioSciences (CHRS) | Ocular Therapeutics (OCUL) | | Collegium Pharmaceuticals (COLL) | OptiNose (OPTN) | | Deciphera Pharmaceuticals (DCPH) | Rigel Pharmaceuticals (RIGL) | | Eagle Pharmaceuticals (EGRX) | Vanda Pharmaceuticals (VNDA) | | Esperion Therapeutics (ESPR) | Vericel (VCEL) | | Eyepoint Pharmaceuticals (EYPT) | Xeris Biopharma Holdings (XERS) | | G 1 Therapeutics (GTHX) | |

  13. Peer Group

    The peer group includes companies with marketed pharmaceutical products across a wide variety of disease states.

  14. Annual Cash Incentive Bonus

    Annual Cash Incentive Bonus In determining the annual cash incentive bonus payout for executives, the Named Executive Officer’s annual base salary is multiplied by his or her target bonus percentage. For Mr. Collard, Ms. Duarte, and Dr. Forbes, each of whose bonus is weighted based on corporate goal achievement, the resulting amount is then multiplied by the corporate performance percentage approved by the Compensation Committee or the Board, which is based on the achievement of corporate performance goals. For annual cash incentive bonuses to our Named Executive Officers, a minimum overall goal achievement of greater than or equal to seventy-five percent (75%) is required for any performance-based cash bonus to be earned. The target annual cash incentive bonus can be earned if a goal achievement of one hundred percent (100%) is obtained; for extraordinary performance in corporate goal achievement, up to one hundred fifty percent (150%) of the target annual cash incentive bonus for that goal may be awarded. Accordingly, for each Named Executive Officer in 2024, there was the potential to receive up to one hundred fifty percent (150%) of his or her overall target annual cash incentive bonus payout. Between minimum and target, and target and maximum, overall goal achievement, payout is linearly interpolated (so that overall goal achievement of 115% would correspond to a payout of 115% of target). The Compensation Committee retains sole discretion to modify our target corporate performance goals at any time, including the methodology for calculating the specific bonus amounts. The Compensation Committee may also, in its sole discretion, determine to either increase annual cash incentive bonus payouts for extraordinary achievement or to reduce payouts if economic and business conditions warrant. For the 2024 cash incentive bonuses, the Compensation Committee did not modify any goals or the individual bonus payout. Our corporate goals are collectively designed to emphasize success with respect to our diverse business efforts and encourage our Named Executive Officers to support each goal as a multi-disciplinary function. For 2024, our corporate goals were a combination of the following:

  15. Annual Cash Incentive Bonus

    | Goal | Weight | Achievement | | ZYNRELEF and APONVIE revenue between $25.7 million and $31.1 million | 40% | Met - $30.1 million | | CINVANTI and SUSTOL revenue between $102.3 million and $110.1 million | | Exceeded - $114.2 million | | Total Net Revenue between $128 million and $141.2 million | | Exceeded - $144.2 million | | Operating Expense(1) between $112.9 million and $116 million | 30% | Exceeded - $103.8 million | | EBITDA(2) between ($16.7) million and ($19.8) million | | Exceeded - $3.9 million | | Cash(3) on hand between $30 million and $33 million | | Exceeded - $59.3 million | | Submission of VAN PAS in Q2 2024 | 30% | Met | | VAN PAS approval in Q4 2024 | | Met | | PFS product development milestones in Q3 and Q4 2024 | | Met | | ZYNRELEF sNDA approval in Q1 2024 | | Met |

  16. Annual Cash Incentive Bonus

    Operating expense is defined as GAAP operating expense less stock compensation expense and depreciation expense. (2) EBITDA is defined as operating income (loss) less stock compensation expense and depreciation expense. (3) Cash is defined as cash and cash equivalents and short term investments. The Compensation Committee’s analysis of the level of achievement for each goal was subjective and the goals were considered in the aggregate, without a formulaic evaluation. In the aggregate, the Compensation Committee determined that overall, the corporate performance goals had been achieved at a level of one hundred fifteen percent (115%) for all Named Executive Officers. The 115% achievement was determined principally as a result of all goals being met and certain goals being exceeded. Corresponding payouts are noted in the table below. The bonus targets for the Named Executive Officers were not increased from 2023.

  17. Annual Cash Incentive Bonus

    | Executive | 2024 Base Salary | 2024 Target | 2024 Corporate Performance Achievement | 2024 Annual Cash Incentive Bonus | | Craig Collard | $669,500 | 75% | 115% | $577,444 | | Ira Duarte | $515,000 | 50% | 115% | $296,125 | | William Forbes | $592,250 | 50% | 115% | $340,544 |

  18. Equity-Based Compensation

    Equity-Based Compensation Under our 2007 Plan, the Board (or a committee thereof, including the Compensation Committee) may grant stock options, shares of stock, restricted stock units, stock appreciation rights and performance awards. In granting these equity awards, the Board (or a committee thereof, including the Compensation Committee) may establish any conditions or restrictions it deems appropriate. The 2024 equity awards to our Named Executive Officers consist of a mix of time-based stock options, and time-based restricted stock unit awards. The time-based stock options vest over a four-year period, with 1/48th of the covered shares vesting on each monthly anniversary of the grant date, subject to the respective grantee’s continued service through the applicable vesting date. The time-based restricted stock units also vest over four years with 1/16th of the covered shares vesting on each quarterly anniversary of the grant date, subject to the respective grantee’s continued service through the applicable vesting date. In determining the appropriate target value for these equity awards, the Compensation Committee considered several factors, including the specific responsibilities and experience of each Named Executive Officer, his or her individual performance, Company performance, parity among our Named Executive Officers, and the recommendations of our CEO (except with respect to his own equity award). The Compensation Committee-approved equity grants were as follows:

  19. Equity-Based Compensation

    | Executive | Option Awards | Restricted Stock Unit Awards | | Craig Collard | 1,324,502 | 220,750 | | Ira Duarte | 371,935 | 61,989 | | William Forbes | 371,935 | 61,989 |

  20. Equity-Based Compensation

    Equity awards are discretionary. The Compensation Committee generally grants equity awards to Named Executive Officers during its regularly scheduled meeting early in the fiscal year. However, the timing of this approval may be changed in the event of extraordinary circumstances, including in connection with mid-year promotions and new-hires. Eligible employees, including our Named Executive Officers, may voluntarily enroll in our Amended and Restated 1997 Employee Stock Purchase Plan ("Employee Stock Purchase Plan") and receive an option to purchase shares at a discount using payroll deductions accumulated during the prior six-month period. Purchase dates under the Employee Stock Purchase Plan are generally the last trading day in April and October. The Compensation Committee did not take material nonpublic information into account when determining the timing and terms of equity awards in 2024. The Compensation Committee does not time the release of material nonpublic information to affect the value of executive compensation.

  21. Employment and Separation Arrangements

    Employment and Separation Arrangements We have entered into employment agreements with each continuing Named Executive Officer, the terms of which provide, among other things, for certain termination and change-in-control payments and benefits. Our Board approved the termination and change-in-control payments and benefits in order to maintain market-competitive compensation practices and to mitigate some of the risk that exists for executives working in a biopharmaceutical company at our current stage of operation, where the possibility exists that a change in control could occur if our business efforts succeed. These arrangements are intended to retain highly skilled executives who have, or who may seek, alternatives that may appear to them to be less risky in terms of the potential loss of their position following a change in control, particularly where the services of these executive officers may not be required following a transaction. We do not provide any of our Named Executive Officers with gross-up protection for “golden parachute” excise taxes in any of these arrangements. A summary of the terms of each of the arrangements we have with each Named Executive Officer who is currently employed by the Company and the payments and benefits on termination of employment or change in control is provided in the executive compensation tables below under the heading “Employment Arrangements”.

  22. Taxation of “Parachute” Payments and Deferred Compensation

    Taxation of “Parachute” Payments and Deferred Compensation We do not provide our Named Executive Officers with a “gross-up” or other reimbursement payment for any tax liability that the Named Executive Officer might owe as a result of the application of Sections 280G, 4999, or 409A of the Code. Sections 280G and 4999 of the Code provide that executive officers, directors who hold significant equity interests in our Company, and certain other service providers may be subject to an excise tax if they receive payments or benefits in connection with a change of control of our Company that exceeds certain prescribed limits, and that the Company, or a successor, may forfeit a deduction on the amounts subject to this additional tax. Section 409A of the Code also imposes additional significant taxes on an executive officer, director or other service provider to the Company in the event that he or she receives “deferred compensation” that does not meet certain requirements of Section 409A of the Code.

  23. Accounting for Stock-Based Compensation

    Accounting for Stock-Based Compensation We follow the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 for our stock-based awards. FASB ASC Topic 718 generally requires companies to measure the compensation expense for all share-based payment awards made to employees and directors, including stock options, restricted stock unit awards and performance unit awards (including PSUs), based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below for equity awards to our Named Executive Officers as required by the applicable SEC rules. FASB ASC Topic 718 also generally requires companies to recognize the compensation cost of their stock-based compensation awards in their income statements over the period that the recipient of such compensation is required to render service in exchange for the option or other award. For performance unit awards (including PSUs), stock-based compensation expense recognized may be adjusted over the performance period based on interim estimates of performance against pre-set objectives.

  24. Executive Compensation Tables

    | Name and Principal Position | Year | Salary | Stock Awards (1) | Option Awards (1) | Non-Equity Incentive Plan Compensation (2) | All Other Compensation (3) | Total | | | 2024 | $669,500 | $461,368 | $1,687,180 | $577,444 | $— | $3,395,492 | | Craig Collard (4), (5) Chief Executive Officer | 2023 | $492,986 | $547,273 | $9,257,049 | $326,957 | $151,553 | $10,775,818 | | | 2022 | $— | $— | $— | $— | $— | $— | | | 2024 | $515,000 | $129,557 | $473,779 | $296,125 | $10,350 | $1,424,811 | | Ira Duarte (4) EVP, Chief Financial Officer | 2023 | $271,154 | $60,500 | $1,066,875 | $128,844 | $7,500 | $1,534,873 | | | 2022 | $— | $— | $— | $— | $— | $— | | | 2024 | $592,250 | $129,557 | $473,779 | $340,544 | $— | $1,536,130 | | William Forbes (4) EVP, Chief Development Officer | 2023 | $329,519 | $55,500 | $917,433 | $155,654 | $— | $1,458,106 | | | 2022 | $— | $— | $— | $— | $— | $— |

  25. 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 information about the relationship between executive compensation actually paid to certain individuals by the Company and certain financial performance of the Company. For further information concerning the Company’s pay for performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to the Compensation Discussion and Analysis section of this Proxy Statement.

  26. Pay versus Performance

    | | | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year | Summary Compensation Table Total for Current PEO ($)(1) | Summary Compensation Table Total for Former PEO ($)(1) | Compensation Actually Paid to Current PEO ($)(2) | Compensation Actually Paid to Former PEO ($)(2) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(3) | Average Compensation Actually Paid to Non- PEO NEOs ($)(4) | Total Shareholder Return(5) | Peer Group Total Shareholder Return(6) | Net Income/(Loss) (millions)(7) | Total Net Revenue (millions) (9) | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | | 2024 | $3,395,491 | $— | $3,473,940 | $— | $1,480,471 | $1,671,651 | $7.23 | $90.58 | $(14) | $144 | | 2023 | $10,775,818 | $4,030,347 | $10,869,399(8) | $836,461(8) | $1,623,453 | $1,794,691(8) | $8.03 | $91.84 | $(111) | $127 | | 2022 | $— | $1,145,704 | $— | $(2,798,657) | $1,438,169 | $357,507 | $11.81 | $88.53 | $(182) | $108 | | 2021 | $— | $5,430,828 | $— | $(1,032,982) | $1,581,471 | $(619,359) | $43.14 | $99.37 | $(221) | $86 |

  27. Pay versus Performance

    (1) The dollar amounts reported in columns (a) and (b) are the amounts of total compensation reported for Craig Collard and Barry Quart (our former Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table for the applicable year. (2) The dollar amounts reported in column (c) and (d) represent the amount of “compensation actually paid” to Craig Collard and Barry Quart, as computed in accordance with Item 402(v) of Regulation S-K for the applicable year. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Craig Collard or Barry Quart during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Craig Collard's and Barry Quart’s total compensation for 2023 and 2024 to determine the compensation actually paid, in the applicable year (2023 is included due to the administrative error correction described in footnote 8):

  28. Pay versus Performance

    | Year | Reported Summary Compensation Table Total for Current PEO ($) | Reported Summary Compensation Table Total for Former PEO ($) | Reported Value of Equity Awards to Current PEO ($) | Reported Value of Equity Awards to Former PEO ($) | Equity Award Adjustments - Current PEO ($) | Equity Award Adjustments - Former PEO ($) | Compensation Actually Paid to Current PEO ($) | Compensation Actually Paid to Former PEO ($) | | 2024 | $3,395,491 | $— | $(2,148,547) | $— | $2,226,996 | $— | $3,473,940 | $— | | 2023 | $10,775,818 | $4,030,347 | $(9,804,322) | $(2,414,240) | $9,897,903(8) | $(779,646)(8) | $10,869,399(8) | $836,461(8) |

  29. Pay versus Performance

    • The “Reported Value of Equity Awards” represents the aggregate grant date fair value of equity awards granted to the applicable PEO in the corresponding year, which represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year for such PEO. The amounts in this column for the applicable fiscal year are replaced with the corresponding amount reported under the “Equity Award Adjustments” column for the applicable PEO in the corresponding year in order to arrive at “compensation actually paid” for the applicable PEO for the corresponding year. The “Equity Award Adjustments” represents an adjustment to the amounts in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year (a “Subject Year”) for the applicable PEO. For a Subject Year, the equity award adjustments include the addition (or subtraction, as applicable) of the following for that Subject Year: (i) the year-end fair value of any equity awards granted in the Subject Year that are outstanding and unvested as of the end of the Subject Year; (ii) the amount of change as of the end of the Subject Year (from the end of the prior year) in the fair value of any awards granted in prior years that are outstanding and unvested as of the end of the Subject Year; (iii) for awards that are granted and vest in the Subject Year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the Subject Year, the amount equal to the change as of the vesting date (from the end of the prior year) in the fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the Subject Year, a deduction for the amount equal to the fair value at the end of the prior year; and (vi) the dollar value of any dividends or other earnings paid on equity awards in the Subject Year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the Subject Year. The fair value or change in fair value, as applicable, of equity awards was determined by reference to (x) for RSU awards, the closing price of our common stock on the applicable measurement date, (y) for market-conditioned performance-based equity awards, a Monte Carlo simulation with reference to the risk free rate, dividend yield and volatility assumptions as of the applicable measurement date and (z) for options, the closing stock price, in addition to the stock option’s strike price, expected life, volatility, expected dividend yield, and risk-free rate as of the measurement date. The amounts deducted or added in calculating the equity award adjustments are as follows:

  30. Pay versus Performance

    | Year | Year End Fair Value of Equity Awards Granted in the Year - Current PEO ($) | Year Over Year Change in Fair Value of Outstanding and Unvested Equity Awards at Year End Granted in Prior Years ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Change in Fair Value (from the end of the prior year) of Equity Awards Granted in Prior Years that Vested in the Year ($) | Fair Value at the End of the Prior Year of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions in the Covered Year | Value of Dividends or other Earnings Paid on Stock Awards not Otherwise Reflected in Fair Value or Total Compensation in the Summary Compensation Table for the Year | Total Equity Award Adjustments - Current PEO ($) | | 2024 | $1,498,562 | $(950,498) | $727,402 | $951,530 | $— | $— | $2,226,996 | | 2023 | $9,887,321(8) | $— | $10,582 | $— | $— | $— | $9,897,903(8) |

  31. Pay versus Performance

    | Year | Year End Fair Value of Equity Awards Granted in the Year - Former PEO ($) | Year Over Year Change in Fair Value of Outstanding and Unvested Equity Awards at Year End Granted in Prior Years ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Change in Fair Value (from the end of the prior year) of Equity Awards Granted in Prior Years that Vested in the Year ($) | Fair Value at the End of the Prior Year of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions in the Covered Year | Value of Dividends or other Earnings Paid on Stock Awards not Otherwise Reflected in Fair Value or Total Compensation in the Summary Compensation Table for the Year | Total Equity Award Adjustments - Former PEO ($) | | 2023 | $— | $— | $82,734(8) | $(469,212)(8) | $(393,168) | $— | $(779,646)(8) |

  32. Pay versus Performance

    (3) The dollar amounts reported in column (e) represent the average of the amounts reported for the NEOs as a group (excluding the current PEO and the former PEO in each respective year) in the “Total” column of the Summary Compensation Table in each applicable year. The NEOs (excluding the current PEO and the former PEO) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2024, Ira Duarte, and William Forbes, (ii) for 2023, Ira Duarte, William Forbes, and David Szekeres; (iii) for 2022, Kimberly Manhard, and David Szekeres and (iv) for 2021, Kimberly Manhard, John Poyhonen, David Szekeres and Lisa Peraza. (4) The dollar amounts reported in column (f) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding the current PEO and the former PEO), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding the current PEO and the former PEO) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding the current PEO and the former PEO) for fiscal years 2023 and 2024 to determine the compensation actually paid, using the same methodology described above (2023 is included due to the administrative error correction described in footnote 8):

  33. Pay versus Performance

    | Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs ($) | Average Reported Value of Equity Awards - NEOs ($) | Average Equity Award Adjustments - NEOs ($) | Average Compensation Actually Paid to Non- PEO NEOs ($) | | 2024 | $1,480,471 | $(603,336) | $794,516 | $1,671,651 | | 2023 | $1,623,453 | $(833,743)(8) | $1,004,981(8) | $1,794,691(8) |

  34. Pay versus Performance

    The fair value or change in fair value, as applicable, of equity awards was determined by reference to (x) for RSU awards, the closing price of our common stock on the applicable measurement date, (y) for market-conditioned performance-based equity awards, a Monte Carlo simulation with reference to the risk free rate, dividend yield and volatility assumptions as of the applicable measurement date and (z) for options, the closing stock price, in addition to the stock option’s strike price, expected life, volatility, expected dividend yield, and risk-free rate as of the measurement date. The amounts deducted or added in calculating the total average equity award adjustments are as follows:

  35. Pay versus Performance

    | Year | Average Year End Fair Value of Equity Awards Granted in the Year ($) | Year Over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards at Year End Granted in Prior Years ($) | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Average Change in Fair Value (from the end of the prior year) of Equity Awards Granted in Prior Years that Vested in the Year ($) | Average Fair Value at the end of the prior year of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions in the covered year | Average Value of Dividends or other Earnings Paid on Stock Awards not Otherwise Reflected in Fair Value or Total Compensation in the Summary Compensation Table for the Fiscal Year | Total Average Equity Award Adjustments - NEOs ($) | | 2024 | $420,813 | $(224,906) | $204,263 | $394,346 | $— | $— | $794,516 | | 2023 | $1,237,300(8) | $— | $— | $(124,334)(8) | $(107,985)(8) | $— | $1,004,981(8) |

  36. Pay versus Performance

    This column represents cumulative Company total shareholder return (“TSR”) and is calculated by assuming that a $100 investment was made on the day prior to the first fiscal year reported and reinvesting all dividends until the last day of each reported fiscal year. (6) This column represents cumulative peer group TSR computed in accordance with Note 5. The peer group used for this purpose is the following published industry index: Nasdaq Biotech Index. (7) The dollar amounts reported in column (i) represent the amount of net income (loss) reflected in the Company’s audited financial statements for the applicable year. (8) Due to administrative errors in the calculations, the 2023 amounts reported in the Company's proxy statement filed on April 29, 2024 have been corrected. (9) We determined total net revenue to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and Non-PEO NEOs in 2024. This performance measure may not have been the most important financial performance measure for previous years, and we may determine a different financial performance measure to be the most important financial performance measure in future years.

  37. Analysis of the Information Presented in the Pay Versus Performance Table

    Analysis of the Information Presented in the Pay Versus Performance Table We generally seek to incentivize long-term performance, and therefore do not specifically align our performance measures with “compensation actually paid” (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following description of the relationships between information presented in the Pay Versus Performance table. Cumulative TSR of the Company and Cumulative TSR of the Peer Group The TSR of the Company, assuming an initial fixed $100 investment and computed in accordance with the requirements of Item 402(v) of Regulation S-K, was $7.23, $8.03, $11.81, and $43.14 for 2021-2024, 2021-2023, 2021-2022, and 2021, respectively. The TSR of the Company’s Peer Group (the NASDAQ Biotechnology index), assuming an initial fixed $100 investment and computed in accordance with the requirements of Item 402(v) of Regulation S-K, was $90.58, $91.84, $88.53, and $99.37 for 2021-2024, 2021-2023, 2021-2022, and 2021, respectively. A $100 investment made in the Company on the day prior to the first fiscal year reported in the Pay Versus Performance table, assuming reinvestment of all dividends, would have declined to $7.23 by the last day of the last fiscal year reported in the Pay Versus Performance table. In directional alignment, a $100 investment made in the Company’s Peer Group on the day prior to the first fiscal year reported in the Pay Versus Performance table, assuming reinvestment of all dividends, would have declined to $90.58 by the last day of the last fiscal year reported in the Pay Versus Performance table. While directionally aligned, the decline in the investment in the Company was more significant. Compensation Actually Paid and Cumulative Company TSR The compensation actually paid to our current PEO and former PEO, as computed in accordance with the requirements of Item 402(v) of Regulation S-K, aggregated, was $3,473,940, $11,705,860, $(2,798,657), and $(1,032,982) for 2024, 2023, 2022, and 2021, respectively. The average amount of compensation actually paid to the NEOs as a group (excluding our current and former PEO), as computed in accordance with Item 402(v) of Regulation S-K, was $1,671,651, $1,794,691, $357,507, and $(619,359) for 2024, 2023, 2022, and 2021, respectively. The TSR of the Company, assuming an initial fixed $100 investment and computed in accordance with the requirements of Item 402(v) of Regulation S-K, was $7.23, $8.03, $11.81, and $43.14 for 2021-2024, 2021-2023, 2021-2022, and 2021, respectively. Over the period covered by the pay versus performance table, the cumulative TSR of the Company declined while the compensation actually paid to the PEO and former PEO, aggregated, and the average amount of compensation actually paid to the NEOs as a group (excluding our current and former PEO), increased. Compensation Actually Paid and Company Net Loss The compensation actually paid to our current PEO and former PEO, as computed in accordance with the requirements of Item 402(v) of Regulation S-K, was $3,473,940, $11,705,860, $(2,798,657), and $(1,032,982) for 2024, 2023, 2022, and 2021, respectively. The average amount of compensation actually paid to the NEOs as a group (excluding our current and former PEO), as computed in accordance with Item 402(v) of Regulation S-K, was $1,671,651, $1,794,691, $357,507, and $(619,359) for 2024, 2023, 2022, and 2021, respectively. The Company’s net loss, as computed in accordance with Item 402(v) of Regulation S-K and reflected in the Company’s audited financial statements for the applicable fiscal year, was $(13,580,000), $(110,559,000), $(182,024,000), and $(220,683,000) for 2024, 2023, 2023, and 2021, respectively. Over the period covered by the pay versus performance table, the Company’s net loss decreased. In other words, over the period covered by the pay versus performance table, the Company’s net income increased. In directional alignment, the compensation actually paid to the PEO and former PEO, aggregated, and the average amount of compensation actually paid to the NEOs as a group (excluding our current and former PEO), also increased. Compensation Actually Paid and Total Net Revenue The compensation actually paid to our current PEO and former PEO, as computed in accordance with the requirements of Item 402(v) of Regulation S-K, was $3,473,940, $11,705,860, $(2,798,657), and $(1,032,982) for 2024, 2023, 2022, and 2021, respectively. The average amount of compensation actually paid to the NEOs as a group (excluding our current and former PEO), as computed in accordance with Item 402(v) of Regulation S-K, was $1,671,651, $1,794,691, $357,507, and $(619,359) for 2024, 2023, 2022, and 2021, respectively. The Company’s total net revenue, as computed in accordance with Item 402(v) of Regulation S-K and reflected in the Company’s audited financial statements for the applicable fiscal year, was $144,285,000, $127,044,000, $107,672,000, and $86,346,000 for 2024, 2023, 2022, and 2021, respectively. Over the period covered by the pay versus performance table, the Company’s revenue increased. In directional alignment, the compensation actually paid to the PEO and former PEO, aggregated, and the average amount of compensation actually paid to the NEOs as a group (excluding our current and former PEO), also increased. All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference in any filing of our Company under the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

  38. PROPOSAL 1 - ELECTION OF DIRECTORS

    PROPOSAL 1 - ELECTION OF DIRECTORS At the Annual Meeting, the stockholders will vote to elect six nominees to serve as directors of the Company until the 2026 Annual Meeting of Stockholders and until their successors are duly elected and qualified or until their earlier death, resignation or removal. Ms. Rodriguez is not standing for re-election at the Annual Meeting. Pursuant to the Cooperation Agreement, the Company agreed to initially appoint Messrs. Collard and Morgan to the Board and include Messrs. Collard and Morgan in the Company’s slate of nominees for the election of directors at the 2023 Annual Meeting of Stockholders and recommend that the Company’s stockholders vote in favor of their election at the 2023 Annual Meeting of Stockholders. Messrs. Collard and Morgan were subsequently elected as directors by our stockholders at the 2024 Annual Meeting of Stockholders. Following their service on the Board during 2024, the Governance Committee has unanimously recommended their nomination as directors at the Annual Meeting. Upon such recommendation of the Governance Committee and the Governance Committee’s nominations with respect to the other director nominees named in this Proxy Statement, our Board has unanimously nominated Dr. Dissanaike, and Messrs. Collard, Johnson, Kaseta, Morgan and Waage for election as directors of the Company at the Annual Meeting and recommends that the Company’s stockholders vote in favor of their election at the Annual Meeting. The foregoing director nominees have indicated that they are willing and able to serve as directors if elected. If any of these individuals becomes unable or unwilling to serve, the accompanying proxy card may be voted for the election of such other person as shall be designated by our Board or our Board may decrease the size of our Board. The proxies being solicited may be voted for no more than six director nominees at the Annual Meeting. The director nominees shall be elected by a majority of the votes cast with respect to that director nominee, provided a quorum is established. Abstentions and broker non-votes will have no effect on the outcome of this proposal. The Board of Directors recommends a vote “FOR” the election of each of the director nominees named in this Proxy Statement. Unless otherwise instructed, it is the intention of the persons named in the accompanying proxy card to vote shares represented by properly executed proxy cards for the election of Dr. Dissanaike and Messrs. Collard, Johnson, Kaseta, Morgan, and Waage.