DEF 14A of Protagonist Therapeutics, Inc, Apr 26, 2024

DEF 14A of Protagonist Therapeutics, Inc

Filed Apr 26, 2024 · FY20230001104659-24-052999

Open on EDGAR

  1. ELECTION OF CLASS II DIRECTOR NOMINEES

    ELECTION OF CLASS II DIRECTOR NOMINEES Protagonist’s Board is divided into three classes. Each class consists of approximately one-third of the total number of directors, and each class is elected for a three-year term. Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A director elected by the Board to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. The Board currently consists of seven members. The terms of office of our three Class II directors expire at this Annual Meeting. The Nominating and Corporate Governance Committee has recommended Sarah A. O’Dowd, William D. Waddill and Lewis T. “Rusty” Williams, M.D., Ph.D. for election to the Board at this Annual Meeting. Each of these nominees is currently a director of the Company and was previously elected by stockholders at the 2021 Annual Meeting of Stockholders. If elected at the Annual Meeting, the three Class II directors would serve until the 2027 Annual Meeting of Stockholders and until their respective successors have been duly elected and qualified, or, if earlier, until their death, resignation or removal. It is the Company’s policy to encourage directors and director nominees to attend Annual Meetings of Stockholders. Six of our directors then-serving on the Board attended the 2023 Annual Meeting of Stockholders. Directors are elected by a plurality of the votes cast. Accordingly, the three nominees receiving the highest number of affirmative votes will be elected. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the three nominees named below. If any nominee becomes unavailable for election or unable to serve, shares that would have been voted for that nominee will instead be voted for the election of a substitute nominee proposed by the Board or the Board may decrease its size. Each person nominated for election has agreed to serve if elected. The Company’s management has no reason to believe that any nominee will be unable to serve. The brief biographies below include information, as of the date of this Proxy Statement, regarding the specific and particular experiences, qualifications, attributes or skills of each nominee for director and each director continuing in office that caused the Nominating and Corporate Governance Committee and the Board to determine that the applicable nominee or director should serve as a member of the Board.

  2. CLASS II DIRECTOR NOMINEES FOR ELECTION FOR TERMS EXPIRING AT THE 2027 ANNUAL MEETING

    CLASS II DIRECTOR NOMINEES FOR ELECTION FOR TERMS EXPIRING AT THE 2027 ANNUAL MEETING

  3. Sarah A. O’Dowd

    Sarah A. O’Dowd Ms. O’Dowd, 74, has served as a member of the Board since August 2020. Ms. O’Dowd is a member of the board of directors of Ichor Holdings, Ltd. (Nasdaq: ICHR), a leader in the design, engineering and manufacturing of critical fluid delivery subsystems and components for semiconductor capital equipment, and is a director of the Independent Institute, a non-profit, non-partisan, public policy research and communications organization. Until her retirement in March 2020, she was Senior Vice President and Chief Legal Officer at Lam Research Corporation (Nasdaq: LRCX), an S&P 500 technology company. For 11 years at Lam, she served as Chief Legal Officer and Secretary. From 2009 to 2012 she also served as Group Vice President of Human Resources at Lam. From February 2007 to September 2008, she served as Vice President of FibroGen, Inc. (Nasdaq: FGEN), a biopharmaceutical company. Ms. O’Dowd received a J.D. from Stanford Law School, an M.A. in Communications from Stanford University and an A.B. in Mathematics from Immaculata College. The Company believes that because of her executive business experience as well as her experience in the biotechnology field and at public companies, Ms. O’Dowd is well positioned to make valuable contributions and provide valuable guidance to the Board.

  4. William D. Waddill

    William D. Waddill Mr. Waddill, 67, has served as a member of the Board since July 2016. From April 2014 to December 2016, Mr. Waddill served as Senior Vice President and Chief Financial Officer, Treasurer and Secretary of Calithera Biosciences, Inc. (OTCMKTS: CALA), a biotechnology company. From October 2007 to March 2014, he served as Senior Vice President and Chief Financial Officer of OncoMed Pharmaceuticals, Inc., a biopharmaceutical company. From October 2006 to September 2007, Mr. Waddill served as the Senior Vice President, Chief Financial Officer of Ilypsa, Inc., a biotechnology company that was acquired in 2007 by Amgen, Inc. From February 2000 to September 2006, he served as a Principal at Square One Finance, a financial consulting business. He has served as a director of Arrowhead Pharmaceuticals, Inc. (Nasdaq: ARWR), a biopharmaceutical company, since January 2018, Annexon, Inc. (Nasdaq: ANNX), a biopharmaceutical company, since August 2021 and Turnstone Biologics Corp. (Nasdaq: TSBX), a biotechnology company, since April 2024. Mr. Waddill received a B.S. in Accounting from the University of Illinois, Chicago, and a certification as a public accountant, which is currently inactive, after working at PricewaterhouseCoopers LLP and Deloitte LLP. The Company believes that Mr. Waddill is qualified to serve on the Board because of his financial expertise and extensive experience in the biotechnology field. Lewis T. “Rusty” Williams, M.D., Ph.D. Dr. Williams, 74, has served as a member of the Board since June 2017. Dr. Williams has served as Executive Chairman of Ten30 Bio, a biotechnology start-up company, since April 2024. He previously served as Chairman and Chief Executive Officer of Walking Fish Therapeutics, a biotechnology start-up company, from February 2019 to March 2024. Dr. Williams has also served as a venture partner of Quan Capital, LLP, a healthcare-focused venture capital firm, since October 2018. He founded and served as a director of Five Prime Therapeutics, Inc., a former public biotechnology company acquired by Amgen, Inc., from January 2002 until January 2020, and served as its President and Chief Executive Officer from April 2011 to December 2017. Previously, Dr. Williams spent seven years at Chiron Corporation, a biopharmaceutical company now known as Novartis Vaccines and Diagnostics, Inc., where he served most recently as its Chief Scientific Officer. He also served on Chiron’s board of directors from 1999 to 2001. Prior to joining Chiron, Dr. Williams was a professor of medicine at the University of California, San Francisco, and served as Director of the University’s Cardiovascular Research Institution and Daiichi Research Center. Dr. Williams also has served on the faculties of Harvard Medical School and Massachusetts General Hospital and co-founded COR Therapeutics, Inc., a biotechnology company focused on cardiovascular disease. He is a member of the National Academy of Sciences and a fellow of the American Academy of Arts and Sciences. Dr. Williams was previously a member of the board of directors of Neoleukin Therapeutics, Inc. (formerly, Nasdaq: NLTX), COR Therapeutics, Inc., and Beckman Coulter, Inc., each of which was a public company during his service as a director. Dr. Williams received a B.S. from Rice University and an M.D. and a Ph.D. from Duke University. The Company believes that Dr. Williams’ extensive experience in drug discovery and development, his executive experience with several pharmaceutical companies and his service as a director of other publicly traded healthcare companies have provided him the qualifications, skills and financial expertise to serve on the Board. THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR ALL” THE CLASS II DIRECTOR NOMINEES. In addition to the Class II director nominees, Protagonist has four other directors who will continue in office after the Annual Meeting, with terms expiring in 2025 and 2026, respectively.

  5. CLASS III DIRECTORS CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING

    CLASS III DIRECTORS CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING Harold E. Selick, Ph.D. Dr. Selick, 69, has served as a member of the Board since February 2009. Dr. Selick is currently Chief Executive Officer and board member of Hinge Bio, Inc., a private biotechnology company focused on developing therapeutics for patients living with cancer. He previously served as Vice Chancellor of Business Development, Innovation and Partnerships at the University of California, San Francisco, from April 2017 to December 2022. Dr. Selick was a Venture Partner at Mission Bay Capital, a venture capital firm, from 2018 until his resignation at the end of 2022. Previously, he was the Chief Executive Officer of Threshold Pharmaceuticals, Inc., a biotechnology company, from June 2002 until the company’s merger with Molecular Templates Inc. in April 2017. From June 2002 until July 2007, Dr. Selick was also a Venture Partner of Sofinnova Ventures, Inc., a venture capital firm. From January 1999 to April 2002, he was Chief Executive Officer of Camitro Corporation, a biotechnology company, which was acquired two years after its founding. From 1992 to 1999, he was at Affymax Research Institute, the drug discovery technology development center for Glaxo Wellcome plc, most recently as Vice President of Research. Prior to working at Affymax he held scientific positions at Protein Design Labs, Inc. and Anergen, Inc. Dr. Selick serves as Chairman of the board of directors of Molecular Templates, Inc. (Nasdaq: MTEM), a biopharmaceutical company. Dr. Selick previously served as Lead Director and then Chairman of PDL BioPharma, Inc., a biopharmaceutical company, from 2009 to December 2019, and served as Chairman of the board of directors of Threshold Pharmaceuticals, Inc. until it merged with Molecular Templates Inc. in April 2017. Dr. Selick received a B.A. in Biophysics and a Ph.D. in Biology from the University of Pennsylvania and was a Damon Runyon-Walter Winchell Cancer Fund Fellow and an American Cancer Society Senior Fellow at the University of California, San Francisco. The Company believes that because of his broad experience in building and running both private and public companies and serving on the boards of directors of a variety of biotechnology companies, Dr. Selick is well positioned to provide guidance and insight to the Board and management team.

  6. Bryan Giraudo

    Bryan Giraudo Mr. Giraudo, 48, has served as a member of the Board since May 2018. Mr. Giraudo has served as Chief Financial Officer of Gossamer Bio, Inc. (Nasdaq: GOSS), a biotechnology company, since May 2018 and as Chief Operating Officer of Gossamer Bio since September 2021. He has completed nearly $1.0 billion in financings for Gossamer Bio since inception, from Series B financing through its initial public offering and additional debt and equity financings. Prior to joining Gossamer Bio, Mr. Giraudo was a Senior Managing Director at Leerink Partners from 2009 to April 2018, where he was responsible for their western North America and Asia Pacific biotechnology and medical technology banking practice. Before joining Leerink, he was a Managing Director with Merrill Lynch and Co.’s Global Healthcare Investment Banking Group. Mr. Giraudo joined Merrill Lynch in 1997. As a banker, he completed over 200 corporate finance, corporate partnership and strategic advisory transactions. Mr. Giraudo has been a member of the board of directors of Valerio Therapeutics, S.A. (EPA: ALVIO) (formerly, Onxeo SA (EPA: ALONX)), a biotechnology company, since November 2021. He received a B.A. from Georgetown University. The Company believes Mr. Giraudo is qualified to serve on the Board because of his extensive experience in the investment banking field, financial expertise and experience in the biotechnology field.

  7. CLASS I DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING

    CLASS I DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING Dinesh V. Patel, Ph.D. Dr. Patel, 67, has served as a member of the Board and as the Company’s President and Chief Executive Officer since December 2008. Dr. Patel has more than 38 years of executive, entrepreneurial and scientific experience spanning the pharmaceutical, biotechnology and biopharmaceutical industries. Prior to joining Protagonist, he served from 2006 to 2008 as President and Chief Executive Officer of Arête Therapeutics, a privately held company focused on the development of novel drugs for metabolic syndrome. Prior to that, Dr. Patel was President, Chief Executive Officer and co-founder of Miikana Therapeutics, an oncology-based company, from 2003 until it was acquired by Entremed (later renamed CASI Pharmaceuticals) in 2005. Prior to Miikana, he held positions of increasing responsibility at Versicor, a biotechnology company (later renamed Vicuron), from 1996 to 2003, most recently as Senior Vice President of Drug Discovery and Licensing. Vicuron’s research and development efforts led to two marketed drugs, anidulafungin (Eraxis®), and Dalbavancin (Dalvance®), and the Company was acquired by Pfizer in 2005 in a $1.9 billion cash transaction. Prior to Vicuron, Dr. Patel was a director of chemistry at the combinatorial chemistry company Affymax, from 1993 to 1996. He was also a medicinal chemist at Bristol Myers Squibb (NYSE: BMY) from 1985 to 1993. Dr. Patel received a Ph.D. in Chemistry from Rutgers University, New Jersey and a B.S. in Industrial Chemistry from S. P. University, Vallabh Vidyanagar, India. The Company believes that because of his expertise, extensive knowledge of the Company and experience as an executive officer of biotechnology companies, Dr. Patel is able to make valuable contributions to the Board. Daniel N. Swisher, Jr. Mr. Swisher, age 61, has served as a member of the Board since October 2023. Mr. Swisher served as a Strategic Advisor to Jazz Pharmaceuticals plc (Nasdaq: JAZZ), a biopharmaceutical company, from September 2023 to March 2024. He previously served as the President of Jazz Pharmaceuticals from January 2018 to September 2023, and also as its Chief Operating Officer from January 2018 until May 2021 and from November 2022 until September 2023. Prior to Jazz Pharmaceuticals, he served in various roles at Sunesis Pharmaceuticals, Inc., a biopharmaceutical company, from 2001 to December 2017, including as its Chief Executive Officer and a member of its board of directors from 2003 to December 2017, and President from 2005 through December 2017. Prior to that, Mr. Swisher held a range of senior management roles, including serving as Senior Vice President of Sales and Marketing at ALZA Corporation, a pharmaceutical and medical systems company that merged with Johnson & Johnson, from 1992 to 2001. Mr. Swisher has served as a director of Cerus Corporation (Nasdaq: CERS), a biopharmaceutical company, since June 2011 and as chairman of the board of directors since October 2013. Mr. Swisher has also served as a director of Corcept Therapeutics Incorporated (Nasdaq: CORT), a pharmaceutical company, since June 2015. Mr. Swisher received a B.A. from Yale University and an M.B.A. from the Stanford Graduate School of Business. The Company believes that Mr. Swisher’s senior leadership and business experience leading biopharmaceutical companies makes him a qualified and valuable member of the Board.

  8. INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

    INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

  9. SUMMARY COMPENSATION TABLE FOR FISCAL 2023

    SUMMARY COMPENSATION TABLE FOR FISCAL 2023

  10. SUMMARY COMPENSATION TABLE FOR FISCAL 2023

    | Name | Year | Salary ($)(1) | Stock Awards ($)(2)(3) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($) | | Dinesh V. Patel, Ph.D. President and Chief Executive Officer | 2023 | 655,200 | — | 6,041,100 | 360,360 | 10,912 | 7,067,572 | | | 2022 | 630,000 | 897,813 | 4,211,963 | 242,550 | 10,912 | 5,993,238 | | Suneel Gupta, Ph.D. Chief Development Officer | 2023 | 515,205 | 251,006 | 1,245,977 | 193,125 | 10,876 | 2,216,189 | | | 2022 | 500,000 | 359,125 | 1,684,785 | 130,000 | 10,894 | 2,684,804 | | Asif Ali EVP, Chief Financial Officer(6) | 2023 | 447,000 | 129,306 | 641,867 | 178,800 | 5,242 | 1,402,215 |

  11. SUMMARY COMPENSATION TABLE FOR FISCAL 2023

    (1) The amounts in the “Salary” column reflect each NEO’s base salary. (2) The amounts in the “Stock Awards” and “Option Awards” columns reflect the aggregate grant date fair value of restricted stock units (“RSUs”), performance stock units (“PSUs”) and stock options, as applicable, granted during the calendar year and computed in accordance with the provisions of Accounting Standards Codification (“ASC”) 718, Compensation — Stock Compensation. The valuation methodology of these awards is described in the notes to the Company’s financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2023. These amounts do not reflect the actual economic value that will be realized by the NEO upon the vesting of the RSUs, PSUs and stock options, the exercise of the stock options, or the sale of the common stock underlying such awards. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. With respect to option awards only, the NEOs will only realize compensation to the extent the trading price of the common stock is greater than the exercise price of such stock options. (3) PSUs granted in 2022 were deemed to have no reportable accounting grant date value because the performance goal was not likely to be achieved as of the grant date. The PSUs granted in 2022 vested 100% on May 31, 2023, the date that the Compensation Committee determined, in its sole discretion, that the Company’s forecasted cash and cash equivalents were sufficient to fund the Company’s operations through at least December 31, 2025. The maximum value of the PSUs at grant date for 2022, assuming the performance conditions were achieved, was $262,800 for Dr. Patel and $105,120 for Dr. Gupta. (4) The amounts in the “Non-Equity Incentive Plan Compensation” column for 2023 reflect cash bonuses earned for the 2023 fiscal year, which were paid in 2024, based on the achievement of certain predetermined corporate objectives specified by the Board, including operating targets and research and development outcomes. In December 2023, the Compensation Committee determined that the Company met 100% of its 2023 corporate objectives and approved the amount of each NEO’s bonus. The amount of the bonus that each NEO earned for the fiscal year ended on December 31, 2023 is listed in the table below.

  12. SUMMARY COMPENSATION TABLE FOR FISCAL 2023

    | Name | 2023 Base Salary ($) | Target Bonus (As a % of Base Salary) | Amount of Bonus Earned ($) | | Dinesh V. Patel, Ph.D. | 655,200 | 55% | 360,360 | | Suneel Gupta, Ph.D. | 515,205 | 40% | 193,125 | | Asif Ali | 447,500 | 40% | 178,800 |

  13. SUMMARY COMPENSATION TABLE FOR FISCAL 2023

    The amounts noted for 2023 include $6,858 in group term life insurance for Drs. Patel and Gupta and $1,242 group term life insurance for Mr. Ali, and $4,000 in 401(k) plan matching contributions paid by the Company for each of Drs. Patel and Gupta and Mr. Ali. The amounts for 2023 for Drs. Patel and Gupta also include premiums paid for elective LifeLock identity protection services pursuant to Company-wide policy. Mr. Ali was not an NEO in 2022.

  14. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

    POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL The Company is party to an Employee Severance Agreement with each of its NEOs and certain of its other executives. If the Company terminates the employee’s employment without “cause” or the employee terminates employment for “good reason” (each as defined in the agreement), the employee will receive: (a) salary continuation for 12 months, for the Chief Executive Officer, or nine months, for the other NEOs (18 months and 12 months, respectively, in the case of a change in control termination); (b) COBRA continuation for the salary continuation period (or an equivalent cash payment if required by law); (c) in the case of a change in control termination only, a monthly payment equal to one twelfth of the target bonus for the severance period; and (d) in the case of a change in control termination only, acceleration of the vesting (and exercisability, if relevant) of equity awards held as of the date of termination. A “change in control termination” is a termination by the Company without “cause” or the employee for “good reason” that occurs within twelve months following the date of a “change in control,” as defined in the agreement. Payments and benefits under the agreement are subject to the execution of an effective release.

  15. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

    OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END The following table shows for the fiscal year ended December 31, 2023, certain information regarding outstanding equity awards at fiscal year end for the NEOs.

  16. OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2023

    OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2023

  17. OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2023

    | | Option Awards | | | | | Stock Awards | | | | | | | | | | | | | | | Equity Incentive Plan Awards | | | | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Vesting Commencement Date | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Yet Vested ($) | | Dinesh V. Patel, Ph.D. | 04/29/2016 | 54,000 | — | $4.21 | 04/25/2016 | 04/28/2026 | — | — | — | — | | | 10/11/2016 | 320,000 | — | $21.58 | 08/10/2016 | 10/10/2026 | — | — | — | — | | | 02/28/2018 | 150,000 | — | $16.95 | 02/28/2018 | 02/27/2028 | — | — | — | — | | | 08/15/2018 | 54,700 | — | $8.58 | 08/05/2018 | 08/14/2028 | — | — | — | — | | | 02/28/2019(1) | 172,500 | — | $8.02 | 02/28/2019 | 02/27/2029 | — | — | — | — | | | 02/28/2020(1) | 225,208 | 9,792 | $7.80 | 02/28/2020 | 02/27/2030 | — | — | — | — | | | 02/26/2021(1)(2)(3) | 159,375 | 65,625 | $23.57 | 02/26/2021 | 02/25/2031 | 25,000 | 573,250 | 25,000 | 573,250 | | | 02/15/2022(1)(4) | 85,937 | 101,563 | $28.73 | 02/15/2022 | 02/14/2032 | 20,834 | 477,724 | — | — | | | 01/16/2023(1) | 137,500 | 462,500 | $12.17 | 01/16/2023 | 01/15/2033 | — | — | — | — | | Suneel Gupta, Ph.D. | 01/15/2019 | 50,000 | — | $7.38 | 01/07/2019 | 01/14/2029 | — | — | — | — | | | 02/28/2019(1) | 45,000 | — | $8.02 | 02/28/2019 | 02/27/2029 | — | — | — | — | | | 02/28/2020(1) | 81,458 | 3,542 | $7.80 | 02/28/2020 | 02/27/2030 | — | — | — | — | | | 02/26/2021(1)(2)(3) | 56,666 | 23,334 | $23.57 | 02/26/2021 | 02/25/2031 | 12,000 | 275,160 | 12,000 | 275,160 | | | 02/15/2022(1)(4) | 34,375 | 40,625 | $28.73 | 02/15/2022 | 02/14/2032 | 8,334 | 191,099 | — | — | | | 01/16/2023(1)(4) | 28,359 | 95,391 | $12.17 | 01/16/2023 | 01/15/2033 | 20,625 | 472,931 | — | — | | Asif Ali | 04/18/2022(5)(6) | 34,375 | 48,125 | $19.19 | 04/18/2022 | 04/17/2032 | 10,313 | 236,477 | — | — | | | 01/16/2023(1)(4) | 14,609 | 49,141 | $12.17 | 01/16/2023 | 01/15/2033 | 10,625 | 243,631 | — | — |

  18. OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2023

    The shares subject to the option vest as to 1/48 of the shares in equal monthly installments following the vesting commencement date, subject to the holder continuing to provide services through the applicable vesting date. The option is subject to accelerated vesting in the event of an acquisition and in the event of a qualifying termination that occurs in the twelve months following the acquisition as described in “— Potential Payments upon Termination or Change in Control” above. (2) 100% of the stock award vests three years from the grant date subject to the holder continuing to provide services through the applicable vesting date. The award is subject to accelerated vesting in the event of an acquisition and in the event of a qualifying termination that occurs in the twelve months following the acquisition as described in “— Potential Payments upon Termination or Change in Control” above. (3) 100% of the equity incentive plan award vests upon the first to occur of a submission of (i) a New Drug Application to the U.S. Food and Drug Administration or (ii) a European Union marketing authorization for a product candidate, subject to the holder continuing to provide services through the applicable vesting date. The award is subject to accelerated vesting in the event of an acquisition and in the event of a qualifying termination that occurs in the twelve months following the acquisition as described in “— Potential Payments upon Termination or Change in Control” above. (4) 1/3 of the stock award shares vest in equal yearly installments over three years subject to the holder continuing to provide services through the applicable vesting date. The award is subject to accelerated vesting in the event of an acquisition and in the event of a qualifying termination that occurs in the twelve months following the acquisition as described in “— Potential Payments upon Termination or Change in Control” above. 25% of the stock award shares vest in equal yearly installments over four years subject to the holder continuing to provide services through the applicable vesting date. The award is subject to accelerated vesting in the event of an acquisition and in the event of a qualifying termination that occurs in the twelve months following the acquisition as described in “— Potential Payments upon Termination or Change in Control” above. 25% of the shares subject to the option vest on the first anniversary of the vesting commencement date, and the remainder vests in 36 equal monthly installments thereafter, subject to the holder continuing to provide services through the applicable vesting date. The option is subject to accelerated vesting in the event of an acquisition and in the event of a qualifying termination that occurs in the twelve months following the acquisition as described in “— Potential Payments upon Termination or Change in Control” above.

  19. NONQUALIFIED DEFERRED COMPENSATION

    NONQUALIFIED DEFERRED COMPENSATION The Company does not maintain any nonqualified deferred compensation plans. The Board may elect to provide the Company’s officers and other employees with nonqualified deferred compensation benefits in the future if it determines that doing so is in the Company’s best interests.

  20. 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 and certain financial performance of the Company.

  21. PAY VERSUS PERFORMANCE

    | Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(4) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return(5) | Net Loss(6) | | 2023 | $7,067,572 | $15,327,386 | $1,809,202 | $4,027,890 | $113.74 | $(75,955,225) | | 2022 | $5,993,238 | $(5,174,369) | $2,466,805 | $(1,687,548) | $54.12 | $(127,393,315) | | 2021 | $5,544,733 | $12,111,993 | $2,222,969 | $4,761,991 | $169.64 | $(125,550,748) |

  22. PAY VERSUS PERFORMANCE

    (1) The dollar amounts reported are the amounts of total compensation reported in our Summary Compensation Table for each of 2023, 2022 and 2021 for Dr. Patel, our President and Chief Executive Officer. The dollar amounts reported represent the amount of “compensation actually paid,” as computed in accordance with SEC rules. The dollar amounts do not reflect the actual amount of compensation earned by or paid during the applicable year. In accordance with SEC rules, the following adjustments were made to total compensation in 2023 to determine the compensation actually paid:

  23. PAY VERSUS PERFORMANCE

    | Year | Reported Summary Compensation Table Total for PEO | Reported Value of Equity Awards(a) | Equity Award Adjustments(b) | Compensation Actually Paid to PEO | | 2023 | $7,067,572 | $(6,041,100) | $14,300,914 | $15,327,386 |

  24. Analysis of the Information Presented in the Pay versus Performance Table

    Analysis of the Information Presented in the Pay versus Performance Table The Company’s executive compensation program reflects a variable pay-for-performance philosophy. While the Company utilizes several performance measures to align executive compensation with Company performance, all of those Company measures are not presented in the Pay versus Performance table. Moreover, the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance measures with compensation that is actually paid (as computed in accordance with SEC rules) for a particular year. In accordance with SEC rules, the Company is providing the following graphs depicting the relationships between information presented in the Pay versus Performance table.

  25. Compensation Actually Paid and Cumulative TSR

    Compensation Actually Paid and Cumulative TSR Compensation Actually Paid and Net Loss

  26. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The following table shows for the fiscal year ended December 31, 2023 certain information with respect to the compensation of all non-employee directors of the Company:

  27. NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2023

    NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2023

  28. NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2023

    | Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1)(2) | Total ($) | | Bryan Giraudo | 60,000 | 296,517 | 356,517 | | Sarah Noonberg, M.D., Ph.D.(3) | 25,000 | 591,741 | 616,741 | | Sarah A. O’Dowd | 45,000 | 296,517 | 341,517 | | Harold E. Selick, Ph.D. | 98,750 | 296,517 | 395,267 | | Daniel N. Swisher, Jr. | 7,174 | 530,982 | 538,156 | | William D. Waddill | 67,500 | 296,517 | 364,017 | | Lewis T. Williams, M.D., Ph.D. | 55,000 | 296,517 | 351,517 |

  29. NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2023

    (1) The amounts in the “Option Awards” column reflect the aggregate grant date fair value of stock options granted during the calendar year and the aggregate incremental fair value of stock options modified during the calendar year, in each case computed in accordance with the provisions of ASC 718, Compensation — Stock Compensation. The valuation assumptions used in determining such amounts are described in the notes to the Company’s financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2023. These amounts do not reflect the actual economic value that will be realized by the directors upon the vesting of the stock options, the exercise of the stock options, or the sale of the common stock underlying such stock options. (2) The aggregate number of stock option awards for each non-employee director that were outstanding as of the end of fiscal year 2023 is shown in the table below. Our non-employee directors did not hold any other outstanding stock awards as of such date. (3) Dr. Noonberg served on the Board until the 2023 Annual Meeting of Stockholders, after which time she provided consulting services through January 31, 2024. Her stock options continued to vest through such date and her vested options will remain outstanding until April 30, 2024. She did not receive any other compensation in exchange for such consulting services, but the change in vesting provisions resulted in incremental fair value ($295,224) as described in footnote (1).

  30. NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2023

    | Name | Aggregate Number of Option Awards Outstanding as of December 31, 2023 | | Bryan Giraudo | 131,000 | | Sarah Noonberg, M.D., Ph.D.(1) | 99,000 | | Sarah A. O’Dowd | 98,000 | | Harold E. Selick, Ph.D. | 174,514 | | Daniel N. Swisher, Jr. | 45,000 | | William D. Waddill | 143,975 | | Lewis T. Williams, M.D., Ph.D. | 131,000 |

  31. NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2023

    (1) Dr. Noonberg served on the Board until the 2023 Annual Meeting of Stockholders, after which time she provided consulting services through January 31, 2024. Her stock options continued to vest through such date and her vested options will remain outstanding until April 30, 2024. She did not receive any other compensation in exchange for such consulting services. In September 2016, the Board adopted a non-employee director compensation policy. The Compensation Committee made certain changes to the non-employee director compensation policy effective as of January 1, 2020, May 16, 2022, January 1, 2023 (to increase the number of options granted as part of the annual equity award from 20,000 to 30,000) and October 26, 2023 (to increase the number of options granted as part of the initial equity award from 30,000 to 45,000). Pursuant to this policy, the Company compensates its non-employee directors with a combination of cash and equity. The annual cash compensation contained in this policy, set forth below, is payable in equal quarterly installments, in advance during the last month of each quarter in which service occurred, prorated for any months of partial service. Annual Board Service Retainer: Non-employee directors other than the non-executive chairperson: $40,000 • Non-executive chairperson: $75,000 • Annual Committee Service Retainer (Chairperson): • Chairperson of the Audit Committee: $20,000 • Chairperson of the Compensation Committee: $15,000 • Chairperson of the Nominating and Corporate Governance Committee: $10,000 • Chairperson of the Research Committee: $10,000 • Annual Committee Service Retainer (Non-Chairperson): • Audit Committee: $10,000 • Compensation Committee: $7,500 • Nominating and Corporate Governance Committee: $5,000 • Research Committee: $5,000 The Company’s non-employee director compensation policy also provides for equity compensation to each non-employee director as follows: • Initial Grant: At the time he or she joins the Board, each new non-employee director will receive an initial stock option grant to purchase 45,000 shares of common stock. The awards shall vest in equal monthly installments over three years. • Annual Grant: Each non-employee director will also be granted an option to purchase 30,000 shares of common stock on the same day as the annual employee refresher awards. The awards shall vest in equal monthly installments over twelve months. All options granted to the Company’s non-employee directors under the policy will vest in full upon the completion of a change in control.

  32. NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2024

    NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2024 After consultation with Radford and pursuant to the compensation review process described above, effective January 1, 2024, the number of shares subject to the annual option grant to be awarded in fiscal year 2024 to our non-employee directors was set at 25,700 shares.