DEF 14A of Viridian Therapeutics, Inc.\DE, Apr 26, 2024

DEF 14A of Viridian Therapeutics, Inc.\DE

Filed Apr 26, 2024 · FY20230001193125-24-115928

Open on EDGAR

  1. PROPOSAL 1: ELECTION OF DIRECTORS

    PROPOSAL 1: ELECTION OF DIRECTORS In accordance with our Fourth Amended and Restated Bylaws (the “Bylaws”), the Board has fixed the number of directors constituting the Board at six. At the Annual Meeting, the stockholders will vote to elect the two Class III director nominees named in this Proxy Statement to serve until the 2027 Annual Meeting of Stockholders and until their successors are duly elected and qualified or until their earlier death, resignation or removal. Our Board has nominated Stephen Mahoney and Arlene M. Morris for election to our Board. Mr. Mahoney was appointed to the Board in October 2023. Ms. Morris was most recently elected by stockholders at the 2021 Annual Meeting of Stockholders. Our director nominees have indicated that they are willing and able to serve as our directors. However, if any of them becomes unable or, for good cause, unwilling to serve, proxies may be voted for the election of such other person as shall be designated by our Board, or the Board may decrease the size of the class and Board. The Board recommends a vote “FOR” each of the director nominees set forth above.

  2. Information Regarding Director Nominees and Continuing Directors

    Information Regarding Director Nominees and Continuing Directors Our Board is divided into three classes, with members of each class holding office for staggered three-year terms. There are currently two Class I directors, whose term expires at the 2025 Annual Meeting of Stockholders, two Class II directors, whose term expires at the 2026 Annual Meeting of Stockholders and two Class III directors, who are up for election at this meeting for a term expiring at the 2027 Annual Meeting of Stockholders. The following is a brief biography of each director nominee and continuing director and a discussion of the specific experiences, qualifications, attributes or skills of each director nominee and continuing director that led the Nominating and Corporate Governance Committee of the Board (the “Nominating Committee”) to recommend that person as a director of our Board. Our Nominating Committee seeks to assemble a board that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and high-level management experience necessary to oversee and direct our business. To that end, our Nominating Committee has identified and evaluated the nominees in the broader context of the overall composition of our Board with the goal of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound business judgment and other qualities that our Nominating Committee views as critical to the effective functioning of our Board. 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 the nominees that led our Nominating Committee to believe that the nominees should continue to serve on our Board. However, each of the members of our Nominating Committee may have a variety of reasons why he or she believes a particular person would be an appropriate nominee for our Board, and these views may differ from the views of other members. The following table lists the names and ages of each director nominee and continuing director of the Board:

  3. Information Regarding Director Nominees and Continuing Directors

    | Name | Class | Age (as of April 26, 2024) | Position | | Stephen Mahoney | Class III | 53 | President, Chief Executive Officer and Director | | Dr. Sarah Gheuens(1) | Class I | 45 | Independent Director | | Peter Harwin(1)(2)(3) | Class I | 38 | Independent Director | | Tomas Kiselak(1)(3)(4) | Class II | 37 | Independent Chairman of the Board | | Arlene M. Morris(2)(3)(4) | Class III | 72 | Independent Director | | Jennifer K. Moses(2)(4) | Class II | 49 | Independent Director |

  4. Information Regarding Director Nominees and Continuing Directors

    | (1) Member of the Science and Technology Committee (the “Science Committee”) |

  5. Information Regarding Director Nominees and Continuing Directors

    | (2) Member of the Audit Committee |

  6. Information Regarding Director Nominees and Continuing Directors

    | (3) Member of the Nominating Committee |

  7. Information Regarding Director Nominees and Continuing Directors

    | (4) Member of the Compensation Committee |

  8. Class I Directors Continuing in Office

    Class I Directors Continuing in Office Dr. Sarah Gheuens. Dr. Gheuens has served as a member of our Board since September 2023. Dr. Gheuens has served as Chief Medical Officer of Agios Pharmaceuticals, Inc. (Nasdaq: AGIO) (“Agios”), a pharmaceutical company, since September 2021 and as its Head of Research and Development since July 2022. Previously, she served as Agios’ Head of Clinical Development from December 2019 to September 2021. Prior to joining Agios, Dr. Gheuens worked at Biogen Inc. (Nasdaq: BIIB) (“Biogen”), a multinational biotechnology company, from October 2012 to December 2019, where she held roles of increasing responsibility in safety, medical affairs and clinical development, including most recently as Executive Medical Director, Head of Medical Safety, Late Stage Clinical Development. Prior to joining Biogen, Dr. Gheuens served as a physician at Beth Israel Deaconess Medical Center (“BIDMC”), a hospital, from November 2008 to September 2012. Dr. Gheuens received her M.D. from the Free University of Brussels (VUB), Belgium, and completed her neurology residency at the University Hospital of the Free University of Brussels (VUB), Belgium, followed by an HIV/neurology fellowship at BIDMC. She also received a Ph.D. in Medical Sciences from the University of Antwerp, Belgium and a Master’s in Medical Sciences from Harvard Medical School. We believe Dr. Gheuens is qualified to serve on our Board because of her extensive experience within the biopharmaceutical industry, including in the research and development of drugs, and as a physician. Peter Harwin. Mr. Harwin has served as a member of our Board since October 2020. Mr. Harwin is a Managing Member at Fairmount Funds Management LLC (“Fairmount”), a healthcare investment firm he co-founded in April 2016. Prior to Fairmount, Mr. Harwin was a member of the investment team at Boxer Capital, LLC, an investment fund part of the Tavistock Group, based in San Diego. Mr. Harwin also serves as Chairman of the board of directors of Cogent Biosciences, Inc. (Nasdaq: COGT), a biopharmaceutical company, and as a member of the boards of directors of Apogee Therapeutics, Inc. (Nasdaq: APGE) and Spyre Therapeutics, Inc. (Nasdaq: SYRE), both biotechnology companies. He also serves of the board of Paragon Therapeutics, Inc., a private biotechnology company. He received a B.B.A. from Emory University. We believe Mr. Harwin is qualified to serve on our Board because of his experience serving as a director of biotechnology companies and as a manager of funds specializing in the area of life sciences.

  9. Class II Directors Continuing in Office

    Class II Directors Continuing in Office Tomas Kiselak. Mr. Kiselak has served as Chairman since June 2021 and a member of our Board since October 2020. Mr. Kiselak is a Managing Member at Fairmount, which he co-founded in April 2016. Prior to Fairmount, Mr. Kiselak was a managing director at RA Capital Management, LLC, a healthcare and life science investment firm. Mr. Kiselak also serves as a member of the board of directors of Apogee Therapeutics, Inc. (Nasdaq: APGE), Spyre Therapeutics, Inc. (Nasdaq: SYRE), and Dianthus Therapeutics, Inc. (Nasdaq: DNTH), all biotechnology companies, and several private companies. He received his bachelor’s degree in Neuroscience and Economics from Amherst College. We believe Mr. Kiselak is qualified to serve on our Board because of his experience advising biotechnology companies and as a manager of funds specializing in the area of life sciences. Jennifer K. Moses. Ms. Moses has served as a member of our Board since July 2021. Ms. Moses has served as Chief Financial Officer of Investors Management Corporation (“IMC”), a private holding company of businesses across varied industries since April 2023. Prior to joining IMC, Ms. Moses served as the Chief Financial Officer of G1 Therapeutics, Inc. (Nasdaq: GTHX) (“G1”), a biopharmaceutical company, from May 2019 through April 2023, and she previously served as its Vice President of Finance and Accounting from March 2015 to May 2019. Prior to joining G1, Ms. Moses was a Partner at Rankin McKenzie, LLC (“Rankin McKenzie”), a financial consulting company, from October 2007 to February 2015, where she served as Acting Chief Financial Officer and Controller for venture-backed companies. Prior to joining Rankin McKenzie, Ms. Moses held roles of increasing responsibility at Deloitte & Touche LLP, a professional services company, including providing tax services to clients and later focusing on strategic planning and internal communications in the Office of the Chief Executive Officer of Deloitte Tax LLP. Ms. Moses received a B.S. in Accounting from the Pennsylvania State University and is a C.P.A. We believe Ms. Moses is qualified to serve on our Board because of her financial expertise and experience within the biopharmaceutical industry.

  10. Class III Director Nominees

    Class III Director Nominees Stephen Mahoney. Mr. Mahoney has served as our President and Chief Executive Officer and a member of our Board since October 2023. Prior to joining Viridian, Mr. Mahoney served as Chief Financial and Operating Officer of Magenta Therapeutics, Inc. (“Magenta”) (which later became Dianthus Therapeutics, Inc. (Nasdaq: DNTH)), a biotechnology company, from November 2020 to September 2023, where he was responsible for overseeing the financial and operational aspects of Magenta, and where he was also named President in February 2023 in connection with Magenta’s restructuring plan. Mr. Mahoney has more than 20 years of global biotechnology sector industry experience. Prior to joining Magenta, Mr. Mahoney served as President and Chief Operating Officer of Kiniksa Pharmaceuticals, Ltd. (Nasdaq: KNSA) (“Kiniksa”), a biopharmaceutical company, from August 2015 to November 2019, where he was responsible for overseeing the operational aspects of Kiniksa, including advancement of its existing programs, and as a senior advisor from November 2019 through December 2019. Prior to joining Kiniksa, Mr. Mahoney served as Chief Commercial Officer, among other executive positions of increasing responsibility, at Synageva BioPharma Corp. (“Synageva”). Prior to joining Synageva, he was Regional Director, Legal – Asia Pacific Region for Genzyme Corporation, following other roles in the organization. Mr. Mahoney holds an M.B.A. from the Boston College Carroll School of Management, a J.D. from Boston College Law School and a B.A. from Colorado College. He also serves on the board of directors of Vesselson, Inc., a private company. We believe that Mr. Mahoney is qualified to serve on our Board because of his unique perspective given his role as our Chief Executive Officer, his more than 20 years of global biotechnology sector industry experience and his executive leadership roles at numerous biopharmaceutical companies. Arlene M. Morris. Ms. Morris has served as a member of our Board since January 2018. Ms. Morris has served as Chief Executive Officer at Willow Advisors, LLC, a consultancy advising biotech companies on financing, strategy and business development, since May 2015. From April 2012 until May 2015, Ms. Morris served as the Chief Executive Officer of Syndax Pharmaceuticals, Inc., a then privately-held oncology company focused on the development and commercialization of therapies for treatment-resistant cancers. She also served as a member of the Syndax Pharmaceuticals board of directors from 2011 to 2015. From 2003 to 2011, Ms. Morris served as President, Chief Executive Officer and a member of the board of directors of Affymax, Inc., a biotechnology company. Ms. Morris also held various management and executive positions at Clearview Projects, Inc., a corporate advisory firm; Coulter Pharmaceutical, Inc., a pharmaceutical company; Scios Inc., a biopharmaceutical company; and Johnson & Johnson (NYSE: JNJ), a healthcare company. She is currently a member of the board of directors of TC BioPharma (Holdings) plc (Nasdaq: TCBP), a gamma delta cell therapy company, where she serves as Chair of the board of directors; Palatin Technologies, Inc. (NYSE: PTN), a biopharmaceutical company; and Cogent Biosciences, Inc. (Nasdaq: COGT), a biopharmaceutical company. She was a director of Biodel Inc., a specialty pharmaceutical company, from 2015 until its merger in 2016, Dimension Therapeutics, a gene therapy company, until it was acquired by Ultragenyx in 2017, and Viveve Medical, Inc., a medical device company, from May 2016 until February 2023. She is currently a director of the Charleston Animal Society. Ms. Morris received a B.A. in Biology and Chemistry from Carlow University. We believe Ms. Morris is qualified to serve on our Board because of her relevant industry experience and breadth of expertise from past and continued service on the boards of directors of publicly-traded biotechnology companies, which enable her to contribute important strategic insight to the Board.

  11. PROPOSAL 4: APPROVAL OF A FURTHER AMENDMENT AND RESTATEMENT OF OUR AMENDED AND RESTATED 2016 EQUITY INCENTIVE PLAN

    PROPOSAL 4: APPROVAL OF A FURTHER AMENDMENT AND RESTATEMENT OF OUR AMENDED AND RESTATED 2016 EQUITY INCENTIVE PLAN The Board believes that stock-based incentive awards can play an important role in the success of our Company. These incentives are given to employees, directors and consultants of our Company and provide these individuals with a proprietary interest in our Company. Our Board believes a compensation policy that includes a balanced mix of cash and equity is the most effective way to attract and retain talented service providers whose interests are aligned with stockholders.

  12. Background

    | • | market standards and peer group companies; and |

  13. Key Data

    Key Data When approving the Amended 2016 Plan, our Board considered the burn rate with respect to the equity awards granted by the Company under the Existing 2016 Plan. The Board also considered the Company’s overhang with respect to the Miragen Therapeutics, Inc. 2008 Equity Incentive Plan (the “2008 Plan”), the Existing 2016 Plan, the Viridian Therapeutics, Inc. 2020 Stock Incentive Plan (the “2020 Plan”) and the grant of stock options as inducement awards made outside of the Existing 2016 Plan (the “Inducement Awards”). The burn rate is equal to the total number of equity awards the Company granted in a fiscal year divided by the weighted average common stock outstanding during the year. The Company’s three-year average burn rate through December 31, 2023 relating to the Existing 2016 Plan, at the time our Board approved the Amended 2016 Plan, was approximately 13.8%. The Company’s overhang relating to the 2008 Plan, the Existing 2016 Plan, the 2020 Plan and the Inducement Awards as of March 31, 2024, was 16%. If the Amended 2016 Plan is approved, the Company’s overhang would increase to approximately 18%. The Company has calculated overhang by dividing the factor of total equity awards outstanding, plus shares available for award issuances, by total common stock outstanding including preferred stock on an as-converted to common stock basis. The following table sets forth certain information about the Amended 2016 Plan, as well as the Company’s Existing 2016 Plan, the 2020 Plan, the 2008 Plan and the Inducement Awards as of March 31, 2024:

  14. Key Data

    | Total shares remaining available for new grants under the Existing 2016 Plan(1) | 2,113,343 | | Total shares underlying outstanding stock options | 10,319,573 | | Weighted average exercise price of outstanding stock options | $18.84 | | Weighted average remaining contractual life of outstanding stock options (in years) | 8.09 | | Total shares underlying outstanding restricted stock units | 669,096 | | Number of new shares being authorized under the Amended 2016 Plan | 2,000,000 | | Total number of shares available for future awards under the Amended 2016 Plan if this proposal is approved | 4,113,343 | | Total shares of common stock outstanding including issued and outstanding preferred shares on an as-converted to common basis | 83,863,339 |

  15. Plan Summary

    Plan Summary The following summary of the material terms of the Amended 2016 Plan is qualified in its entirety by reference to the complete text of the Amended 2016 Plan which is set forth in Appendix A to this Proxy Statement. Stockholders are encouraged to read the text of the Amended 2016 Plan in its entirety. Purpose The Amended 2016 Plan is designed to secure and retain the services of the Company’s employees, directors and consultants, provide incentives for the Company employees, directors and consultants to exert maximum efforts for the success of the Company and its affiliates, and provide a means by which the Company’s employees, directors and consultants may be given an opportunity to benefit from increases in the value of its common stock. Types of Awards The terms of the Amended 2016 Plan provide for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, other stock awards and performance awards that may be settled in cash, stock or other property. Shares Available for Awards Subject to adjustment for specified changes in the Company’s capitalization, the aggregate number of shares of common stock of the Company that may be issued under the Amended 2016 Plan, or the Share Reserve, will not exceed 10,693,659 shares plus any shares of common stock subject to outstanding awards under the 2020 Plan and 2008 Plan as of March 31, 2024 that on or after such date are forfeited, terminated, expire or otherwise lapse without being exercised (to the extent applicable), or are settled in cash. Any shares subject to a stock award or award under the 2020 Plan or 2008 Plan that are not issued because such stock award or award under the 2020 Plan or 2008 Plan expires or otherwise terminates without all of the shares covered by such stock award having been issued will again become available for issuance under the Amended 2016 Plan. The following shares of common stock will also revert to the Amended 2016 Plan and will therefore become available for issuance under the Amended 2016 Plan: (i) any shares subject to a stock award or award under the 2020 Plan or 2008 Plan that are not issued because such stock award is settled in cash; (ii) any shares issued pursuant to a stock award or award under the 2020 Plan or 2008 Plan that are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required for the vesting of such shares; and (iii) any shares reacquired by the Company in satisfaction of tax withholding obligations on a stock award or as consideration for the exercise or purchase price of a stock award. Eligibility All of the Company’s (including its affiliates’) employees, non-employee directors and consultants are eligible to participate in the Amended 2016 Plan and may receive all types of awards, provided that incentive stock options may be granted under the Amended 2016 Plan only to the Company’s employees (including officers) and employees of its affiliates. As of March 31, 2024, the Company had 97 eligible employees, 5 eligible non-employee directors and approximately 90 eligible consultants, provided, however, that we do not regularly grant equity awards to consultants. Non-Employee Director Compensation Limit Under the Amended 2016 Plan, the maximum number of shares of common stock of the Company subject to stock awards granted under the Amended 2016 Plan or otherwise during any one calendar year to any non-employee director, taken together with any cash fees paid by the Company to such non-employee director during such calendar year for services on the Board, will not exceed $500,000 in total value (calculating the value of any such stock awards based on the grant date fair value of such stock awards for financial reporting purposes), or, with respect to the calendar year in which a non-employee director is first appointed or elected to the Board, $1,000,000. The Board may make exceptions for individual non-employee directors in extraordinary circumstances, as the Board may determine in its discretion, provided that the non-employee director receiving such additional compensation may not participate in the decision to award such compensation. Administration The Amended 2016 Plan will be administered by the Board, which may in turn delegate authority to administer the Amended 2016 Plan to a committee. The Board delegates concurrent authority to administer the Amended 2016 Plan to the Compensation Committee, but may, at any time, revest in itself some or all of the power delegated to the Compensation Committee. The Board and the Compensation Committee are each considered to be a Plan Administrator for purposes of this Proposal 4. Subject to the terms of the Amended 2016 Plan, the Plan Administrator may determine the recipients, the types of awards to be granted, the number of shares of common stock subject to or the cash value of awards and the terms and conditions of awards granted under the Amended 2016 Plan, including the period of their exercisability and vesting. The Plan Administrator also has the authority to provide for accelerated exercisability and vesting of awards. Subject to the limitations set forth below, the Plan Administrator also determines the fair market value applicable to a stock award and the exercise or strike price of stock options and stock appreciation rights granted under the Amended 2016 Plan. The Plan Administrator may also delegate to one or more officers the authority to designate employees who are not officers to be recipients of certain stock awards and the number of shares of common stock subject to such stock awards. Under any such delegation, the Plan Administrator will specify the total number of shares of common stock that may be subject to the stock awards granted by such officer. The officer may not grant a stock award to himself or herself. Repricing; Cancellation and Re-Grant of Stock Awards Under the Amended 2016 Plan, the Plan Administrator does not have the authority to reprice any outstanding stock option or stock appreciation right by reducing the exercise or strike price of the stock option or stock appreciation right or to cancel any outstanding stock option or stock appreciation right that has an exercise or strike price greater than the then-current fair market value of a share of common stock in exchange for cash or other stock awards without obtaining the approval of the Company’s stockholders. Such approval must be obtained within 12 months prior to such an event. Stock Options Stock options may be granted under the Amended 2016 Plan pursuant to stock option agreements. The Amended 2016 Plan permits the grant of stock options that are intended to qualify as incentive stock options (“ISOs”) and nonstatutory stock options (“NQSOs”). Participants who hold stock options will have no voting rights and will have no rights to receive dividends or dividend equivalents in respect of any share subject to a stock option until such participant has become the holder of record of such shares. The exercise price of a stock option granted under the Amended 2016 Plan may not be less than 100% of the fair market value of the common stock subject to the stock option on the date of grant and, in some cases (see “Limitations on Incentive Stock Options” below), may not be less than 110% of such fair market value.

  16. Plan Summary

    The term of stock options granted under the Amended 2016 Plan may not exceed ten years and, in some cases (see “Limitations on Incentive Stock Options” below), may not exceed five years. Except as otherwise provided in a participant’s stock option agreement or other written agreement with the Company or one of its affiliates, if a participant’s service relationship with the Company or any of its affiliates, referred to in this Proposal No. 4 as continuous service, terminates (other than for cause and other than upon the participant’s death or disability), the participant may exercise any vested stock options for up to three months following the participant’s termination of continuous service. Except as otherwise provided in a participant’s stock option agreement or other written agreement with the Company or one of its affiliates, if a participant’s continuous service terminates due to the participant’s disability or death (or the participant dies within a specified period, if any, following termination of continuous service), the participant, or his or her beneficiary, as applicable, may exercise any vested stock options for up to 12 months following the participant’s termination due to the participant’s disability or for up to 18 months following the participant’s death. Except as explicitly provided otherwise in a participant’s stock option agreement or other written agreement with the Company or one of its affiliates, if a participant’s continuous service is terminated for cause (as defined in the Amended 2016 Plan), all stock options held by the participant will terminate upon the participant’s termination of continuous service and the participant will be prohibited from exercising any stock option from and after such termination date. Except as otherwise provided in a participant’s stock option agreement or other written agreement with the Company or one of its affiliates, the term of a stock option may be extended if the exercise of the stock option following the participant’s termination of continuous service (other than for cause and other than upon the participant’s death or disability) would be prohibited by applicable securities laws or if the sale of any common stock received upon exercise of the stock option following the participant’s termination of continuous service (other than for cause) would violate the Company’s insider trading policy. In no event, however, may a stock option be exercised after its original expiration date. Acceptable forms of consideration for the purchase of common stock pursuant to the exercise of a stock option under the Amended 2016 Plan will be determined by the Plan Administrator and may include payment: (i) by cash, check, bank draft or money order payable to the Company; (ii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board; (iii) by delivery to the Company of shares of common stock (either by actual delivery or attestation); (iv) by a net exercise arrangement (for NQSOs only); or (v) in other legal consideration approved by the Plan Administrator. Stock options granted under the Amended 2016 Plan may become exercisable in cumulative increments, or “vest,” as determined by the Plan Administrator at the rate specified in the stock option agreement. Shares covered by different stock options granted under the Amended 2016 Plan may be subject to different vesting schedules as the Plan Administrator may determine. The Plan Administrator may impose limitations on the transferability of stock options granted under the Amended 2016 Plan in its discretion. Generally, a participant may not transfer a stock option granted under the Amended 2016 Plan other than by will or the laws of descent and distribution or, subject to approval by the Plan Administrator, pursuant to a domestic relations order or an official marital settlement agreement. However, the Plan Administrator may permit transfer of a stock option in a manner that is not prohibited by applicable tax and securities laws. In addition, subject to approval by the Plan Administrator, a participant may designate a beneficiary who may exercise the stock option following the participant’s death. Limitations on Incentive Stock Options The aggregate fair market value, determined at the time of grant, of shares of common stock with respect to ISOs that are exercisable for the first time by a participant during any calendar year under all of the Company’s stock plans may not exceed $100,000. The stock options or portions of stock options that exceed this limit or otherwise fail to qualify as ISOs are treated as NQSOs. No ISO may be granted to any person who, at the time of grant, owns or is deemed to own stock possessing more than 10% of the Company’s total combined voting power or that of any affiliate unless the following conditions are satisfied:

  17. Plan Summary

    Subject to adjustment for specified changes in capitalization, the aggregate maximum number of shares of common stock that may be issued pursuant to the exercise of ISOs under the Amended 2016 Plan is 10,693,659 shares. Stock Appreciation Rights Stock appreciation rights may be granted under the Amended 2016 Plan pursuant to stock appreciation right agreements. Each stock appreciation right is denominated in common stock share equivalents. The strike price of each stock appreciation right will be determined by the Plan Administrator but will in no event be less than 100% of the fair market value of the common stock subject to the stock appreciation right on the date of grant. The Plan Administrator may also impose restrictions or conditions upon the vesting of stock appreciation rights that it deems appropriate. The appreciation distribution payable upon exercise of a stock appreciation right may be paid in shares of common stock of the Company, in cash, in a combination of cash and stock, or in any other form of consideration determined by the Plan Administrator and set forth in the stock appreciation right agreement. Stock appreciation rights will be subject to the same conditions upon termination of continuous service and restrictions on transfer as stock options under the Amended 2016 Plan. Participants who hold stock appreciation rights (“SARs”) will have no voting rights and will have no rights to receive dividends or dividend equivalents in respect of any share subject to a SAR until such participant has become the holder of record of such shares. Restricted Stock Awards Restricted stock awards may be granted under the Amended 2016 Plan pursuant to restricted stock award agreements. A restricted stock award may be granted in consideration for cash, check, bank draft or money order payable to the Company, the participant’s services performed for the Company or any of its affiliates, or any other form of legal consideration acceptable to the Plan Administrator. Shares of common stock acquired under a restricted stock award may be subject to forfeiture to or repurchase by the Company in accordance with a vesting schedule to be determined by the Plan Administrator. Rights to acquire shares of common stock under a restricted stock award may be transferred only upon such terms and conditions as are set forth in the restricted stock award agreement. Any dividends paid on restricted stock will be subject to the same vesting conditions as apply to the shares subject to the restricted stock award. Upon a participant’s termination of continuous service for any reason, any shares subject to restricted stock awards held by the participant that have not vested as of such termination date may be forfeited to or repurchased by the Company. Restricted Stock Unit Awards Restricted stock unit awards may be granted under the Amended 2016 Plan pursuant to restricted stock unit award agreements. Payment of any purchase price may be made in any form of legal consideration acceptable to the Plan Administrator. A restricted stock unit award may be settled by the delivery of shares of common stock of the Company, in cash, in a combination of cash and stock, or in any other form of consideration determined by the Plan Administrator and set forth in the restricted stock unit award agreement. Restricted stock unit awards may be subject to vesting in accordance with a vesting schedule to be determined by the Plan Administrator. Dividend equivalents may be credited in respect of shares of common stock covered by a restricted stock unit award, provided that any such dividend equivalents will be subject to all of the same terms and conditions of the underlying restricted stock unit award. Except as otherwise provided in a participant’s restricted stock unit award agreement or other written agreement with the Company or one of its affiliates, restricted stock units that have not vested will be forfeited upon the participant’s termination of continuous service for any reason. Performance Awards The Amended 2016 Plan allows the Company to grant performance stock and cash awards. A performance stock award is a stock award that is payable (including that may be granted, may vest, or may be exercised) contingent upon the attainment of pre-determined performance goals during a performance period. A performance stock award may require the completion of a specified period of continuous service. The length of any performance period, the performance goals to be achieved during the performance period, and the measure of whether and to what degree such performance goals have been attained will be determined by the Compensation Committee. In addition, to the extent permitted by applicable law and the performance stock award agreement, the Plan Administrator may determine that cash may be used in payment of performance stock awards. A performance cash award is a cash award that is payable contingent upon the attainment of pre-determined performance goals during a performance period. A performance cash award may require the completion of a specified period of continuous service. The length of any performance period, the performance goals to be achieved during the performance period, and the measure of whether and to what degree such performance goals have been attained will be determined by the Compensation Committee. The Plan Administrator may specify the form of payment of performance cash awards, which may be cash or other property, or may provide for a participant to have the option for his or her performance cash award to be paid in cash or other property.

  18. Plan Benefits

    | Name | Restricted Stock Units | Stock Options | | Stephen Mahoney President, Chief Executive Officer and Director | — | — | | Scott D. Myers Former President, Chief Executive Officer and Director | — | — | | Jonathan Violin, Ph.D. Former President, Chief Executive Officer and Director | — | 1,080,175 | | Thomas Beetham Chief Operating Officer | — | — | | Seth Harmon Senior Vice President of Finance and Accounting | — | 270,000 | | All Current Executive Officers as a Group | — | 640,000 | | All Non-Employee Directors as a Group | — | 315,500 | | Each Nominee for Election as a Director | — | 129,100 | | Each Associate of any such Directors, Executive Officers or Nominees | — | — | | Each Other Person who Received or is to Receive 5% of such Options | — | 641,500 | | All Employees (excluding all current Executive Officers) as a Group | 889,198 | 7,167,629 |

  19. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

    SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS The following table contains information about our equity compensation plans as of December 31, 2023. As of such date, we had outstanding awards under four equity compensation plans: our 2008 Plan, our Existing 2016 Plan, our 2020 Plan and our 2016 Employee Stock Purchase Plan (“ESPP”). We also had outstanding stock option awards granted outside of our equity plans as inducement awards in accordance with Nasdaq Listing Rule 5635(c)(4) (the “Inducement Awards”).

  20. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

    | Plan Category | Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights(1) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a)) | | | (a) | (b) | (c) | | Equity compensation plans approved by security holders(2) | 7,794,745(3) | $18.55 | 1,995,819(4) | | Equity compensation plans not approved by security holders | 4,543,686(3) | $21.42 | — | | Total | 12,338,431 | $19.68 | 1,995,819 |

  21. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

    | (1) The weighted-average exercise price does not take into account shares issuable upon vesting of outstanding restricted stock unit awards, if any, which have no exercise price. |

  22. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

    | (2) The equity compensation plans approved by security holders are described in Note 11. “Share-Based Compensation” to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC on February 27, 2024. |

  23. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

    | (3) Represents outstanding options, restricted stock units or warrants to purchase shares of common stock. |

  24. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

    | (4) Represents 1,289,073 shares of common stock available for issuance under our Existing 2016 Plan and 706,746 shares of common stock available for issuance under our ESPP, including 22,642 shares of common stock subject to purchase during the purchase periods in effect as of December 31, 2023. Our ESPP includes an “evergreen” feature, which provides that an additional number of shares will automatically be added to the shares reserved for issuance under such equity incentive plan on January 1 of each year, beginning on January 1, 2018 and ending on (and including) January 1, 2026. The number of shares added each calendar year will equal the lesser of: (i) 1% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, (ii) 24,518 shares of our common stock or (iii) a lesser number of shares determined by the Board. |

  25. 2023 Summary Compensation Table

    2023 Summary Compensation Table The following table summarizes the compensation awarded to, earned by or paid to our NEOs for 2023 and 2022.

  26. 2023 Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | | Stephen Mahoney | | | | | | | | | President, Chief Executive Officer and Director | 2023 | 112,847 | 63,762 | — | 12,302,728 | 184 | 12,479,521 | | Jonathan Violin, Ph.D. | 2023 | 59,209 | — | — | 1,587,151 | 564,712 | 2,211,072 | | Former President, Chief Executive Officer and Director | 2022 | 601,200 | 288,576 | — | 3,754,644 | 2,320 | 4,646,740 | | Scott Myers | | | | | | | | | Former President, Chief Executive Officer and Director | 2023 | 549,475 | — | 8,950,000 | 26,786,134 | 122,381 | 36,407,990 | | Thomas Beetham | | | | | | | | | Chief Operating Officer | 2023 | 86,805 | 40,130 | — | 4,634,282 | 184 | 4,761,401 | | Seth Harmon | | | | | | | | | Senior Vice President of Finance and Accounting | 2023 | 241,427 | 372,200 | — | 5,930,567 | 4,332 | 6,548,526 |

  27. 2023 Summary Compensation Table

    | (1) Amounts shown in these columns do not reflect dollar amounts actually received by our NEOs. Instead, in accordance with the SEC rules, these amounts reflect the aggregate grant date fair value of stock options to purchase common stock and awards of restricted stock units that were granted during the applicable fiscal year, as well as the aggregate incremental fair value of stock options modified during the applicable fiscal year, in each case computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718, “Stock Compensation” (“FASB ASC Topic 718”). Our methodology, including our underlying estimates and assumptions used in calculating these values, is set forth in Note 11, “Share-Based Compensation” in our audited consolidated financial statements included in our Annual |

  28. 2023 Summary Compensation Table

    | Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC on February 27, 2024. |

  29. 2023 Summary Compensation Table

    | (2) The dollar amounts shown in the “All Other Compensation” column reflect the Company’s matching contributions to our NEOs’ 401(k) accounts and life insurance premiums paid by the Company on behalf of our NEOs, as well as, in the case of Dr. Violin and Mr. Myers, the value of severance payments ($562,616 and $120,833, respectively). |

  30. Outstanding Equity Awards at 2023 Fiscal-Year End Table

    Outstanding Equity Awards at 2023 Fiscal-Year End Table The following table sets forth information regarding outstanding equity awards as of December 31, 2023, for each of our NEOs.

  31. Outstanding Equity Awards at 2023 Fiscal-Year End Table

    | | Option Awards(1) | | | | | | | Name | Grant Date | Vesting Commencement Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price | Option Expiration Date | | Stephen Mahoney | 10/30/2023 | 10/30/2023(2) | — | 1,259,400 | $13.02 | 10/29/2033 | | Jonathan Violin, Ph.D. | 9/24/2020 | 9/16/2020(2) | 40,170 | 8,031 | $0.15 | 9/23/2030 | | | 1/18/2021 | 1/18/2021(3) | 756,736 | 33,339 | $23.03 | 1/17/2031 | | | 2/2/2022 | 2/2/2022(3) | 58,334 | 11,666 | $18.51 | 2/1/2032(4) | | Scott Myers | 2/6/2023 | 2/6/2023(2) | 541,666 | — | $35.80 | 2/5/2033(5) | | Thomas Beetham | 10/30/2023 | 10/30/2023(2) | — | 474,400 | $13.02 | 10/29/2033 | | Seth Harmon | 6/1/2023 | 5/22/2023(2) | — | 175,000 | $24.50 | 5/31/2033 | | | 11/10/2023 | 11/10/2023(3) | 5,625 | 264,375 | $13.76 | 11/9/2033 |

  32. Outstanding Equity Awards at 2023 Fiscal-Year End Table

    | (1) The unvested shares subject to these option awards may be subject to accelerated vesting upon a qualifying termination of employment, see “Named Executive Officer Employment Agreements.” |

  33. Outstanding Equity Awards at 2023 Fiscal-Year End Table

    | (2) The option vests as to 25% of the shares subject to the option on the first anniversary of the vesting commencement date and then in monthly installments thereafter over the following three years, subject to continuous service through each applicable vesting date. |

  34. Outstanding Equity Awards at 2023 Fiscal-Year End Table

    | (3) The option vests in equal monthly installments over the four-year period following the vesting commencement date, subject to continuous service through each applicable vesting date. |

  35. Outstanding Equity Awards at 2023 Fiscal-Year End Table

    | (4) Dr. Violin’s continuous service to the Company pursuant to Violin Separation Agreement ended effective as of February 6, 2024, and accordingly these options are set to expire on May 6, 2024. |

  36. Outstanding Equity Awards at 2023 Fiscal-Year End Table

    | (5) These options expired on January 29, 2024 in accordance with their terms following Mr. Myers’ termination of employment. |

  37. 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.

  38. Pay Versus Performance

    | Year | Summary Compensation Table Total for Lee Rauch (1) | Compensation Actually Paid to Ms. Rauch (2) | Summary Compensation Table Total for Dr. Violin (1) | Compensation Actually Paid to Dr. Violin (2) | Summary Compensation Table Total for Mr. Myers (1) | Compensation Actually Paid to Mr. Myers (2) | Summary Compensation Table Total for Mr. Mahoney (1) | Compensation Actually Paid to Mr. Mahoney (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 (“TSR”) (5) | Net Income (6) | | 2023 | — | — | $2,211,072 | $(744,985) | $36,407,990 | $6,248,440 | $12,479,521 | $22,376,680 | $5,654,964 | $8,294,872 | $74.56 | $(237.7) | | 2022 | — | — | $4,646,740 | $7,621,417 | — | — | — | — | $2,067,217 | $3,970,915 | $147.75 | $(129.90) | | 2021 | $1,779,054 | $1,961,634 | $17,408,538 | $14,862,020 | — | — | — | — | $7,938,024 | $7,613,295 | $120.18 | $(79.40) |

  39. Pay Versus Performance

    | (1) The dollar amounts reported are the amounts of total compensation reported for (i) Ms. Rauch in the Summary Compensation Table for 2021 (the last covered year during which she served as our principal executive officer), (ii) Dr. Violin in the Summary Compensation Table for 2021, 2022 and 2023 (covered years during which he served as our principal executive officer), (iii) Mr. Myers in the Summary Compensation Table for 2023 (the covered year during which he served as our principal executive officer) and (iv) Mr. Mahoney in the Summary Compensation Table for 2023 (the covered year during which he served as our principal executive officer). |

  40. Pay Versus Performance

    | (2) 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, these amounts reflect “Total” as set forth in the Summary Compensation Table for each year, adjusted as shown below. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. |

  41. Pay Versus Performance

    | Compensation Actually Paid to PEO | 2023 (Dr. Violin) | 2023 (Mr. Myers) | 2023 (Mr. Mahoney) | | Summary Compensation Table Total | 2,211,072 | 36,407,990 | 12,479,521 | | Less, value of “Option Awards” reported in Summary Compensation Table | (1,587,151) | (26,786,134) | (12,302,728) | | Less, value of “Stock Awards” reported in Summary Compensation Table | — | (8,950,000) | — | | Plus, year-end fair value of outstanding and unvested equity awards granted in the year | — | — | 22,199,887 | | Plus, fair value as of vesting date of equity awards granted and vested in the year | — | 5,576,584 | — | | Plus (less), year over year change in fair value of outstanding and unvested equity awards granted in prior years | (349,488) | — | — | | Plus (less), change in fair value from prior year end to the vesting date of equity awards granted in prior years that vested in the year | 607,092 | — | — | | Less, prior year-end fair value for any equity awards forfeited in the year | (1,626,510) | — | — | | Compensation Actually Paid to PEO | (744,985) | 6,248,440 | 22,376,680 |

  42. Pay Versus Performance

    | (3) The dollar amounts reported represent the average of the amounts reported for our NEOs as a group (excluding our Chief Executive Officers) in the “Total” column of the “Summary Compensation Table” in each applicable year. The names of each of the NEOs (excluding our Chief Executive Officers) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023, Mr. Beetham and Mr. Harmon; (ii) for 2022, Mr. Humer and Dr. Katz; and (iii) for 2021, Mr. Humer and Dr. Katz. |

  43. Pay Versus Performance

    | (4) The dollar amounts reported represent the average amount of “compensation actually paid” to the NEOs as a group (excluding our Chief Executive Officers), as computed in accordance with SEC rules. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding our Chief Executive Officer) during the applicable year. In accordance with the SEC rules, these amounts reflect “Total” as set forth in the Summary Compensation Table for each year, adjusted as shown below. Equity values are calculated in accordance with FASB ASC Topic 718, and the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of the grant. |

  44. Pay Versus Performance

    | Average Compensation Actually Paid to Non-PEO NEOs | 2023 | | Average Summary Compensation Table Total | $5,654,964 | | Less, average value of “Option Awards” reported in Summary Compensation Table | (5,282,425) | | Plus, average year-end fair value of outstanding and unvested equity awards granted in the year | 7,882,482 | | Plus, average fair value as of vesting date of equity awards granted and vested in the year | 39,851 | | Plus (less), average year over year change in fair value of outstanding and unvested equity awards granted in prior years | — | | Plus (less), average change in fair value from prior year end to the vesting date of equity awards granted in prior years that vested in the year | — | | Less, prior year-end fair value for any equity awards forfeited in the year | — | | Average Compensation Actually Paid to Non-PEO NEOs | $8,294,872 |

  45. Pay Versus Performance

    | (5) Cumulative total shareholder return is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s stock price at the end and the beginning of the measurement period by the Company’s stock price at the beginning of the measurement period. The beginning of the measurement period for each year in the table is December 31, 2020. |

  46. Pay Versus Performance

    | (6) The dollar amounts reported represent the amount of net income, in millions, reflected in the Company’s audited financial statements for the applicable year. |

  47. 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. In accordance with SEC rules, the Company is providing the following descriptions of the relationships between information presented in the Pay Versus Performance Table.

  48. Compensation Actually Paid and Cumulative TSR

    Compensation Actually Paid and Cumulative TSR *Compensation actually paid in thousands

  49. Compensation Actually Paid and Net Income (Loss)

    Compensation Actually Paid and Net Income (Loss) *Compensation actually paid and net income (loss) in thousands

  50. Non-Employee Director Compensation

    Non-Employee Director Compensation

  51. Fiscal Year 2023 Non-Employee Director Compensation Table

    Fiscal Year 2023 Non-Employee Director Compensation Table The following table shows the compensation earned in 2023 by the non-employee directors who served on the Board during such year. Dr. Violin, Mr. Myers and Mr. Mahoney did not receive any additional compensation for their 2023 Board service. For additional information on the 2023 compensation of Dr. Violin, Mr. Myers and Mr. Mahoney, see the “Executive Compensation” section above.

  52. Fiscal Year 2023 Non-Employee Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($) | Option Awards(1) ($) | Total ($) | | Dr. Sarah Gheuens | 15,333 | 467,192 | 482,525 | | Peter Harwin(2) | 61,000 | 410,830 | 471,830 | | Tomas Kiselak(2) | 93,000 | 410,830 | 503,830 | | Arlene M. Morris | 67,000 | 410,830 | 477,830 | | Jennifer K. Moses | 57,000 | 410,830 | 467,830 |

  53. Fiscal Year 2023 Non-Employee Director Compensation Table

    | (1) The values set forth in this column do not reflect dollar amounts actually received by our non-employee directors and instead, in accordance with the SEC rules, are based on the aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718. Our methodology, including our underlying estimates and assumptions used in calculating these values, is set forth in Note 11, “Share-Based Compensation” in our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC on February 27, 2024. As of December 31, 2023, each of our then-serving non-employee directors held the following number of options to purchase shares of our common stock: Dr. Gheuens, 40,000 options, Mr. Harwin, 71,600 options, Mr. Kiselak, 71,600 options, Ms. Morris, 74,800 options, and Ms. Moses, 57,500 options. |

  54. Fiscal Year 2023 Non-Employee Director Compensation Table

    | (2) All or a portion of such director’s fees is remitted directly to Fairmount and such director is obligated to turn over to Fairmount any net cash or stock received from the options pursuant to their arrangement with Fairmount. The director disclaims beneficial ownership of the options and underlying shares. |