DEF 14A of Anaptysbio, Inc, Apr 24, 2024

DEF 14A of Anaptysbio, Inc

Filed Apr 24, 2024 · FY20230001370053-24-000019

Open on EDGAR

  1. Considerations in Evaluating Director Nominees

    Considerations in Evaluating Director Nominees The nominating and corporate governance committee is responsible for identifying, evaluating and recommending candidates to the Board for board membership. A variety of methods are used to identify and evaluate director nominees, with the goal of maintaining and further developing a diverse, experienced and highly qualified Board. Candidates may come to our attention through current members of our Board, professional search firms, stockholders or other persons. The nominating and corporate governance committee will recommend to the Board for selection all nominees to be proposed by the Board for election by the stockholders, including approval or recommendation of a slate of director nominees to be proposed by the Board for election at each annual meeting of stockholders, and will recommend all director nominees to be appointed by the Board to fill interim director vacancies. Our Board encourages selection of directors who will contribute to the Company’s overall corporate goals. The nominating and corporate governance committee may from time to time review and recommend to the Board the desired qualifications, expertise and characteristics of directors, including such factors as business experience, diversity and personal skills in life sciences and biotechnology, finance, marketing, financial reporting and other areas that are expected to contribute to an effective Board. Exceptional candidates who do not meet all of these criteria may still be considered. In evaluating potential candidates for the Board, the nominating and corporate governance committee considers these factors in the light of the specific needs of the Board at that time. In addition, under our Corporate Governance Guidelines, a director is expected to spend the time and effort necessary to properly discharge such director’s responsibilities. Accordingly, a director is expected to regularly attend meetings of the Board and committees on which such director sits, and to review prior to meetings material distributed in advance for such meetings. Thus, the number of other public company boards and other boards (or comparable governing bodies) on which a prospective nominee is a member, as well as his or her other professional responsibilities, will be considered. Under our Corporate Governance Guidelines, there are no limits on the number of three-year terms that may be served by a director. However, in connection with evaluating recommendations for nomination for reelection, the nominating and corporate governance committee considers director tenure. We value diversity on a company-wide basis, but have not adopted a specific policy regarding board diversity.

  2. Stockholder Recommendations for Nominations to the Board

    Stockholder Recommendations for Nominations to the Board The nominating and corporate governance committee will consider properly submitted stockholder recommendations for candidates for our Board who meet the minimum qualifications as described above. The nominating and corporate governance committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether or not the candidate was recommended by a stockholder. A stockholder of record can nominate a candidate for election to the Board by complying with the procedures in Article I, Section 1.12 of our Bylaws. Any eligible stockholder who wishes to submit a nomination should review the requirements in the Bylaws on nominations by stockholders. Any nomination should be sent in writing to our Corporate Secretary, AnaptysBio, Inc., 10770 Wateridge Circle, Suite 210, San Diego, CA 92121. Submissions must include the full name of the proposed nominee, complete biographical information, a description of the proposed nominee’s qualifications as a director, other information regarding the nominee and proposing stockholder as specified in our Bylaws, and certain representations regarding the nomination. Any such submission must be accompanied by the written consent of the proposed nominee to be named as a nominee and to serve as a director if elected. These candidates are evaluated at meetings of the nominating and corporate governance committee, and may be considered at any point during the year. If any materials are provided by a stockholder in connection with the recommendation of a director candidate, such materials are forwarded to the nominating and corporate governance committee. All proposals of stockholders that are intended to be presented by such stockholder at an annual meeting of stockholders must be in writing and notice must be delivered to the Corporate Secretary at our principal executive offices not later than the close of business on the 75th day nor earlier than the close of business on the 105th day prior to the first anniversary of the preceding year’s annual meeting. Stockholders are also advised to review our Bylaws, which contain additional requirements with respect to advance notice of stockholder proposals and director nominations. In addition to satisfying the foregoing requirements under the Bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees for the 2025 Annual Meeting of Stockholders must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act.

  3. PROPOSAL NO. 1 ELECTION OF CLASS I DIRECTORS

    PROPOSAL NO. 1 ELECTION OF CLASS I DIRECTORS Our Board is divided into three classes. Each class serves for three years, with the terms of office of the respective classes expiring in successive years. Directors and director nominees in Class I will stand for election at this meeting. The terms of office of directors in Class II and Class III do not expire until the annual meetings of stockholders to be held in 2025 and 2026, respectively. Our Class I directors, whose terms will expire at this Annual Meeting, are Mr. Faga, Dr. Fenton and Mr. Nodelman. Our nominating and corporate governance committee recommended to our Board, and our Board nominated, Mr. Faga, Dr. Fenton and Mr. Nodelman, each an incumbent Class I director, for election as Class I directors at the Annual Meeting. At the recommendation of our nominating and corporate governance committee, our Board proposes that each of Mr. Faga, Dr. Fenton and Mr. Nodelman be elected as a Class I director for a three-year term expiring at the annual meeting of stockholders to be held in 2027 and until such director’s successor is duly elected and qualified or until such director’s earlier resignation or removal. Each director will be elected by a plurality of the votes present in person or represented by proxy at the meeting and entitled to vote on the election of directors. This means that the three individuals nominated for election to the Board at the meeting receiving the highest number of “FOR” votes will be elected. You may either vote “FOR” one or more nominees or “WITHHOLD” your vote with respect to any or all of the individuals nominated for election to the Board. A “WITHHOLD” vote will have the same effect as an abstention. You may not cumulate votes in the election of directors. Shares represented by proxies will be voted “FOR” the election of each of the Class I nominees, unless the proxy is marked to withhold authority to so vote. If any nominee for any reason is unable to serve, the proxies may be voted for such substitute nominee as the proxy holders, who are officers of our company, determine. Each nominee has consented to being named in this proxy statement and to serve if elected. Proxies may not be voted for more than three directors.

  4. Nominees to the Board

    Nominees to the Board The nominees and their ages are provided in the table below. Additional biographical information for each nominee is set forth in the text below the table.

  5. Nominees to the Board

    | Name | Age | Position and Class | | Daniel Faga(1) | 44 | Director, Class I | | Dennis Fenton, Ph.D.(2) | 72 | Director, Class I | | Oleg Nodelman(3) | 47 | Director, Class I |

  6. Nominees to the Board

    ______________________ (1) Mr. Faga is our President and Chief Executive Officer (2) Member of the compensation committee (3) Member of the nominating and corporate governance committee Daniel Faga has served as a member of our Board since November 2021, and has served as our President and Chief Executive Officer since August 2023. Mr. Faga previously served as our Interim President and Chief Executive Officer from March 2022 to August 2023. From January 2020 to November 2021, Mr. Faga served as Chief Operating Officer at Mirati Therapeutics, responsible for leading the company’s corporate strategy, finance, legal and other business operations. Prior to joining Mirati, Mr. Faga served as the Chief Business Officer for Spark Therapeutics, Inc. from May 2016 through December 2019, where he was responsible for leading the company’s corporate strategy, portfolio and new product planning, patient advocacy, business development, alliance management, asset & program management and corporate communications functions. From July 2009 until April 2016, Mr. Faga was a Managing Director at Centerview Partners, an investment banking and advisory firm, where he served as a founding member of Centerview’s healthcare advisory practice. Prior to Centerview, Mr. Faga worked at Merrill Lynch in its healthcare investment banking group and as a management consultant in the Life Sciences Practice at PRTM. Mr. Faga earned a B.S. in Engineering from Cornell University and an M.B.A. in Health Care Management from The Wharton School at the University of Pennsylvania. Our Board believes that Mr. Faga’s extensive industry experience and executive experience provides him with the qualifications and skills to serve on our Board. Dennis Fenton, Ph.D. has served as a member of our Board since March 2018. From 1981 to 2008, Dr. Fenton held numerous positions at Amgen, Inc., a biotechnology company, including Executive Vice President from 2000 until 2008, Senior Vice President of Operations from 1995 until 2000 and Senior Vice President of Sales, Marketing and Process Development from 1992 until 1995. Prior to his time at Amgen, Inc., Dr. Fenton served as Senior Research Scientist at Pfizer, Inc., and previously was a research associate and graduate student at Rutgers University. Dr. Fenton previously served on the boards of directors of Sienna Biopharmaceuticals, Inc. from October 2016 to December 2019, Portola Pharmaceuticals, Inc. from February 2015 to July 2020 and Pfenex Inc., a publicly traded company, from September 2015 to May 2018. Dr. Fenton holds a B.S. in Biology from Manhattan College and a Ph.D. in Microbiology from Rutgers University. Our Board believes that Dr. Fenton’s extensive experience in the life sciences industry provides him with the qualifications and skills to serve on our Board. Oleg Nodelman has served as a member of our Board since April 2021. Since October 2013, Mr. Nodelman has served as the Founder and Portfolio Manager of EcoR1 Capital LLC, a biotech-focused investment advisory firm established in 2013, and one of our principal shareholders. Previously, Mr. Nodelman served as a Portfolio Manager at BVF Partners from 2001 to 2012. Mr. Nodelman earned a B.S.F.S. in Science and Technology from Georgetown University, School of Foreign Service in 1999. Mr. Nodelman currently serves on the board of directors of Prothena Corporation plc, and served on the board of directors of Nuvation Bio Inc. from February 2021 to December 2023 and Panacea Acquisition Corp. II from April 2020 to February 2021. Our Board believes that Mr. Nodelman’s extensive industry experience provides him with the qualifications and skills to serve on our Board.

  7. Continuing Directors

    Continuing Directors The directors who are serving or who have been appointed for terms that end following the meeting, and their ages (as of the date of this Proxy Statement), occupations and length of board service are provided in the table below. Additional biographical information for each nominee is set forth in the text below the table.

  8. Continuing Directors

    | Name | Age | Position and Class | | Rita Jain, M.D.(1) | 61 | Director, Class II | | John Orwin(2) | 62 | Chairman of the Board, Class II | | J. Anthony Ware, M.D.(2)(3) | 71 | Director, Class II | | Magda Marquet, Ph.D.(3) | 65 | Director, Class III | | Hollings Renton(2) | 77 | Director, Class III | | John P. Schmid(1)(3) | 61 | Director, Class III |

  9. Continuing Directors

    _________________ (1) Member of the compensation committee (2) Member of the nominating and corporate governance committee (3) Member of the audit committee Rita Jain, M.D. has served as a member of our Board since April 2023. Dr. Jain is a rheumatologist and currently a member of the board of directors of Celldex Therapeutics, Inc. She previously served on the supervisory board of AM-Pharma B.V. from 2020 until September 2023 and the board of directors of Provention Bio, Inc. from 2020 until its acquisition by Sanofi in April 2023, and ChemoCentryx, Inc. from 2019 until its acquisition by Amgen in 2022. From 2021 to 2022, Dr. Jain served as Executive Vice President, Chief Medical Officer of ChemoCentryx, Inc. and in 2021 served as Chief Medical Officer of Immunovant, Inc. From August 2021 to December 2023, Dr. Jain has served as Chief Executive Officer of Heartwood Biopharma Group, a private consulting group. From 2017 to 2019, Dr. Jain was Senior Vice President and Chief Medical Officer at Akebia Therapeutics, Inc. From 2013 to 2016, Dr. Jain was a Vice President in Clinical Development at AbbVie Inc., including Vice President of Men’s and Women’s Health and Metabolic Development. Dr. Jain also held various leadership roles at Abbott Laboratories from 2003 through 2012, including as Divisional Vice President of Pain, Respiratory and Metabolic Disease Development. Dr. Jain received her B.S. degree in biology from the Long Island University, and her M.D. from the State University of New York at Stony Brook School of Medicine. Our Board believes that Dr. Jain’s extensive life sciences experience provides her with the qualifications and skills to serve on our Board. John Orwin has served as a member and Chairman of our Board since September 2023. Mr. Orwin has been President and Chief Executive of Officer of Atreca, Inc. since April 2018. He also has served as a member of the board of directors of CARGO Therapeutics, Inc. since August 2022 and Travere Therapeutics, Inc. since March 2017. He previously served as a member of the member of the boards of directors of Seagen, Inc. from January 2014 until its acquisition by Pfizer Inc. in December 2023 and Array BioPharma, Inc. from November 2012 to July 2019. Mr. Orwin received a B.A. in Economics from Rutgers, The State University of New Jersey and an M.B.A. from New York University. Our Board believes that Mr. Orwin’s extensive industry experience and executive positions at multiple biopharmaceutical companies qualify him to serve on our Board. J. Anthony Ware, M.D. has served as a member of our Board since August 2017. From 2001 to January 2018, Dr. Ware held numerous positions at Eli Lilly and Company, a global pharmaceutical company, including Senior Vice President of Product Development of Lilly Bio-Medicines from October 2009 to January 2018 and Interim President of Lilly Bio-Medicines from January 2017 to April 2017. Before joining Eli Lilly and Company, Dr. Ware served as Professor of Medicine and Molecular Pharmacology at Albert Einstein College of Medicine in New York, where he was also Chief of Cardiology at Montefiore Medical Center from 1996 to 2001. Before joining Albert Einstein College of Medicine, Dr. Ware was on the faculty of Harvard Medical School from 1984 to 1996 and served as a senior physician and Director of the Coronary Care Unit at Beth Israel Hospital. Dr. Ware received his B.S. from Washburn University, and his M.D. from the University of Kansas. He completed internships and residency at The University of Texas at Houston and Baylor College of Medicine, where he also served as Chief Resident. He completed fellowships both at Baylor and at Harvard Medical School, and is board certified both in internal medicine and cardiovascular disease. Our Board believes that Dr. Ware’s extensive academic and industry experience and significant knowledge of scientific matters provide him with the qualifications and skills to serve on our Board. Magda Marquet, Ph.D. has served as a member of our Board since January 2021. As a former founder and Chief Executive Officer, Dr. Marquet holds a Ph.D. in Biochemical Engineering from INSA/University of Toulouse, France. She has received numerous prestigious awards throughout her career including the 2005 Regional Ernst & Young Entrepreneur of the Year award in the Life Sciences category, the Athena Pinnacle award, the Director of the Year award (Corporate Governance) from the Corporate Directors Forum and has been inducted into the CONNECT Entrepreneur Hall of Fame. Dr. Marquet currently serves on the boards of directors of Arcturus Therapeutics Holdings, Inc., Transcode Therapeutics, Inc., and chairs its compensation committee and is a member of its audit committee, and Immix Biopharma, Inc., and serves as the chair of its compensation committee. In the last five years, Dr. Marquet also served on the board of directors of Pfenex, Inc., a publicly traded company, until its acquisition by Ligand Pharmaceuticals. Our Board believes Dr. Marquet’s broad operational, fundraising expertise including venture, private equity and venture debt, as well as her expertise in M&A, global commercial development, regulatory strategies and building a winning culture of innovation and strategic growth provides her with the qualifications and skills to serve our Board. Hollings Renton has served as a member of our Board since June 2015. Mr. Renton previously served as the Chief Executive Officer and President of Onyx Pharmaceuticals, Inc. from 1993 to 2008 and as the chairperson of its board of directors from 2000 to 2008. Before joining Onyx Pharmaceuticals, Mr. Renton served as the President and Chief Operating Officer of Chiron Corporation, a pharmaceutical company, from 1991 to 1993, following its acquisition of Cetus Corporation. Mr. Renton served as the President of Cetus Corporation from 1990 to 1991, as Chief Operating Officer from 1987 to 1990, and as Chief Financial Officer from 1983 to 1987. Mr. Renton currently serves on the board of Zymeworks, Inc., a publicly traded company. Mr. Renton previously served on the board of directors of the publicly traded company Portola Pharmaceuticals, Inc from March 2010 to June 2020. Mr. Renton received his M.B.A. from the University of Michigan and his B.S. in Mathematics from Colorado State University. Our Board believes that Mr. Renton’s extensive industry experience and board memberships provide him with the qualifications and skills to serve on our Board. John P. Schmid has served as a member of our Board since June 2015. Mr. Schmid served as Chief Financial Officer of Auspex Pharmaceuticals, Inc. from September 2013 to June 2015. Before joining Auspex Pharmaceuticals, Mr. Schmid co-founded Trius Therapeutics, a publicly traded biopharmaceutical company, where he served as the Chief Financial Officer from June 2004 until its merger with Cubist Pharmaceuticals, Inc., in September 2013. Before he joined Trius Therapeutics, Mr. Schmid served as the Chief Financial Officer at GeneFormatics, Inc., a private biotechnology company, from 1998 to 2003, and at Endonetics, a private medical device company, from 1995 to 1998. Mr. Schmid currently serves as a member of the boards of directors of the publicly traded companies Design Therapeutics Inc., Poseida Therapeutics, Inc., and Xeris Pharmaceuticals, all pharmaceutical companies, as well as Helix Acquisition Corp. II, a special purpose acquisition company. In the last five years, Mr. Schmid has previously served on the board of directors of Helix Acquisition Corp., a special purpose acquisition company and Neos Therapeutics, a pharmaceutical company. Mr. Schmid received his M.B.A. from the University of San Diego and his B.A. from Wesleyan University. Our Board believes that Mr. Schmid’s extensive industry experience and executive positions at multiple biopharmaceutical companies qualify him to serve on our Board.

  10. Continuing Directors

    There are no familial relationships among any of our directors and executive officers.

  11. Non-Employee Director Compensation

    Non-Employee Director Compensation The following table presents the total compensation for each person who served as a non-employee member of our Board in the year ended December 31, 2023. Mr. Faga is not paid any fees or other compensation for services as a member of our Board. For Mr. Faga’s compensation as our President and Chief Executive Officer, see the section below entitled “Executive Compensation.”

  12. Non-Employee Director Compensation

    | Name(1) | Fees Earned or Paid in Cash ($) | Option Awards(2) ($) | Stock Awards(2) ($) | Total ($) | | Dennis Fenton, Ph.D. | 62,500 | 178,787 | 90,597 | 331,884 | | Laura J. Hamill(3) | 13,750 | 178,787 | 90,597 | 283,134 | | Rita Jain, M.D.(4) | 34,500 | 303,514 | 157,590 | 495,604 | | Magda Marquet, Ph.D. | 49,000 | 178,787 | 90,597 | 318,384 | | Oleg Nodelman | — | — | — | — | | Hollings Renton | 73,000 | 178,787 | 90,597 | 342,384 | | John P. Schmid | 66,000 | 178,787 | 90,597 | 335,384 | | James N. Topper, M.D., Ph.D.(5) | 65,250 | 178,787 | 90,597 | 334,634 | | John Orwin(6) | 22,598 | 199,745 | 115,733 | 338,076 | | J. Anthony Ware, M.D. | 69,000 | 178,787 | 90,597 | 338,384 |

  13. Non-Employee Director Compensation

    _____________________ (1) As of December 31, 2023, Dr. Fenton held outstanding options to purchase 59,307 shares of common stock and 3,900 RSUs (as defined below); Dr. Jain held outstanding options to purchase 18,615 shares of common stock and 7,134 RSUs; Mr. Nodelman did not hold outstanding options to purchase shares of common stock or RSUs; Dr. Marquet held outstanding options to purchase 42,584 shares of common stock and 3,900 RSUs; Mr. Renton held outstanding options to purchase 119,956 shares of common stock and 3,900 RSUs; Mr. Schmid held outstanding options to purchase 111,137 shares of common stock and 3,900 RSUs; Mr. Orwin held outstanding options to purchase 13,911 shares of common stock and 5,935 RSUs; and Dr. Ware held outstanding options to purchase 93,065 shares of common stock and 3,900 RSUs. (2) The amounts reported in the Option Awards and the Stock Awards columns represent the grant date fair value of such awards granted to the directors during the year ended December 31, 2023 as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”). The assumptions used in calculating the grant date fair value of the stock options reported in the Option Awards column are set forth in Note 8 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. Note that the amounts reported in this column reflect the accounting cost for these stock options and RSUs, and do not correspond to the actual economic value that may be received by our directors from the options. (3) Ms. Hamill resigned from our Board, effective April 1, 2023. (4) Dr. Jain was appointed to our Board, effective April 3, 2023. (5) Dr. Topper resigned from our Board, effective September 15, 2023. (6) Mr. Orwin was appointed to our Board, effective September 15, 2023. Our compensation arrangements for non-employee directors are reviewed periodically by our compensation committee and our Board of Directors. In addition, Compensia, the compensation committee’s independent compensation consultant, provided a competitive analysis of director compensation levels, practices and design features as compared to the general market as well as to our compensation peer group. Based on this analysis, certain of the compensation terms described below were increased from the prior year to better align with compensation paid by our peer group and market practices and to remain competitive. Cash Compensation Pursuant to our non-employee director compensation policy each of our non-employee directors is provided with an annual retainer of $40,000. Additionally, our non-executive chairpersons of our Board, audit, compensation, nominating and corporate governance, and research and development committees will receive an additional annual payment of $35,000, $20,000, $15,000, $10,000 and $15,000, respectively; and the other members of our audit, compensation, nominating and corporate governance, and research and development committees will receive an additional annual payment of $10,000, $6,750, $5,000 and $10,000, respectively. Cash compensation is paid quarterly in arrears, and is prorated for partial service during a quarter. Equity Compensation Each of our non-employee directors generally receives an annual stock option grant in January to purchase 16,510 shares of common stock and 6,030 restricted stock units (“RSUs”). The stock option vests in equal monthly installments over one year and the RSUs vest on the date of the next annual meeting, in each case subject to the director’s continued service. Additionally, new non-employee directors will receive a stock option to purchase 16,510 shares of common stock and 6,030 RSUs as well as a prorated annual equity grant. The new director stock option will vest in equal monthly installments over three years and the new director RSUs award will vest in equal annual installments over three years, subject to the director’s continued service. All equity awards held by our non-employee directors will accelerate in full upon a change in control. OUR BOARD RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE NOMINATED CLASS I DIRECTORS.

  14. Stockholder Advisory Vote to Approve Named Executive Officer Compensation

    Stockholder Advisory Vote to Approve Named Executive Officer Compensation At our 2023 Annual Meeting of Stockholders, we conducted a non-binding stockholder advisory vote on the compensation of our named executive officers (commonly known as a “Say-on-Pay” vote). Our Board and our compensation committee consider the results of the Say-on-Pay vote in determining the compensation of our executive officers, including our named executive officers. At our 2023 Annual Meeting of Stockholders, approximately 68% of the votes cast approved our executive compensation program. We take our Say-on-Pay vote results seriously and engaged with our stockholders to seek feedback on the results of our 2023 Say-on-Pay vote and the design of our executive compensation program. We have spoken with the corporate governance teams at several of our major stockholders. The primary stockholder concern involved the initial new hire grant made to our new Interim Chief Executive Officer as well as certain 280G gross-up terms in his agreement. While we recognize and consider the concerns raised by our stockholders, we believe that such 2022 compensation was a one-time outlier, as reflected in the 2023 compensation disclosed in this proxy statement, including the termination on March 22, 2024 of the 280G gross-up. We value the opinion of our stockholders. Our Board and our compensation committee will continue to consider the result of the Say-on-Pay vote, as well as feedback received throughout the year, when making compensation decisions for our executive officers. In addition, consistent with the recommendation of our Board and the preference of our stockholders as reflected in the non-binding stockholder advisory vote on the frequency of future Say-on-Pay votes held at our 2019 Annual Meeting of Stockholders, we continue to hold future Say-on-Pay votes on an annual basis. Accordingly, after the vote at the Annual Meeting to which this Proxy Statement relates, our next Say-on-Pay vote will be conducted at our 2025 Annual Meeting of Stockholders.

  15. Executive Compensation Philosophy & Objectives

    Executive Compensation Philosophy & Objectives The principal objectives of our executive compensation program, policies, and practices are to: •offer competitive compensation which enables us to attract and retain high-caliber executives; •reward the achievement of our business objectives by directly linking annual bonuses to the achievement of objectives that build long-term stockholder value; •recognize both corporate and individual performance by providing opportunities for career advancement and opportunities for above-median short-term and long-term compensation based on measurable corporate and individual performance; and •align the interests of our executives with those of our stockholders by incentivizing and rewarding the creation of stockholder value. Our compensation committee believes an appropriate, well-designed compensation program should align executive interests with the drivers of growth and stockholder returns by supporting the achievement of our primary business goals. Further, the compensation program must enable us to attract and retain employees whose talents, expertise and leadership can drive our success and sustained growth in long-term stockholder value. Our executive compensation program has reflected, and we expect that it will continue to reflect, our industry and life-cycle stage, including the fact that we are a biotechnology company whose product candidates are in pre-clinical and clinical development and remain subject to regulatory approval. As a result, our revenues have been and will continue to be limited, and we expect to continue to incur net losses for at least the next several years. Our historical compensation programs have focused on long-term incentive compensation in the form of equity awards relative to cash compensation. This approach seeks to place a substantial portion of executive compensation at risk by rewarding our named executive officers, in a manner comparable to our stockholders, for achieving our business and financial objectives. In addition, we have a performance-oriented compensation philosophy focused on creating long-term value. Our executive compensation program is heavily weighted toward variable, at-risk performance based bonuses and long-term equity awards. We maintain an annual performance-based cash bonus plan for our named executive officers. Payments under this cash bonus plan are based primarily on our level of achievement of pre-established corporate performance goals to tie compensation of our named executive officers to achievement of key corporate objectives, which will ultimately create shareholder value. We also provide long-term equity awards to motivate our named executive officers in a manner that directly aligns their interest with our long-term strategic direction and the interests of our stockholders, as well as providing our executive officers with an incentive to remain with us as their equity awards vest. When considering the total variable pay-mix for our executive officers, we seek to design and implement a competitive executive compensation program that combines both cash and incentive elements based on annual performance objectives and long-term equity elements that will be flexible and complementary to meet our compensation objectives. Our compensation committee has not adopted any formal policies or guidelines for allocating compensation between current and long-term compensation, between cash and non-cash compensation, or among different forms of non-cash compensation. The factors taken into account by our compensation committee in setting the level of fixed and variable cash compensation and non-cash compensation are described in greater detail below in “Compensation Setting Process”, “Setting Target Total Direct Compensation” and “Compensation Elements.”

  16. Updated Competitive Positioning

    Updated Competitive Positioning In later 2023, our compensation committee directed Compensia to again refresh our compensation peer group in light of our adjusted market capitalization. In evaluating the companies to comprise the compensation peer group at that time, Compensia considered the following criteria: (i) biotechnology and pharmaceutical companies with therapeutic similarity in inflammation, immune-oncology, and other antibody-based therapies; (ii) with lead drugs in phase II or III or pending approval; (iii) ~50 - ~250 employees (~0.5 to ~2.5 of our current headcount); and (iv) a market capitalization of 0.33x to 3.0x our market capitalization. Based on a review of the analysis prepared by Compensia, in September 2022 our compensation committee approved an updated compensation peer group, referred to as the 2023 peer group, consisting of the following companies:

  17. Updated Competitive Positioning

    | Alector | IGM Biosciences | Prothena | | ALX Oncology | iTeos Therapeutics | RAPT Therapeutics | | Atara Biotherapeutics | Kezar Life Sciences | Sangamo Therapeutics | | Avidity Biosciences | Kodiak Sciences | Syndax Pharmaceuticals | | Crinetics Pharmaceuticals | Kura Oncology | Xencor | | Forma Therapeutics | Mersana Therapeutics | | | Gossamer Bio | NGM Biopharmaceuticals | |

  18. Updated Competitive Positioning

    Our compensation committee used this compensation peer group as a reference for its compensation decisions in December 2022. The compensation practices of the peer group was the primary guide used by our compensation committee to compare the competitiveness of each compensation element and overall compensation levels (base salary, target annual cash bonus opportunities, and long-term incentive compensation) for purposes of decisions relating to compensation. Our compensation committee reviews our compensation peer group each year (or more frequently if there have been significant changes to either our business model or market capitalization) and makes adjustments to its composition if warranted, taking into account changes in both our business and the businesses of the companies in the peer group.

  19. Base Salary

    Base Salary Base salary represents the fixed portion of the compensation of our named executive officers and is an important element of compensation intended to attract and retain highly-talented individuals by providing an amount of fixed pay that compensates executives for their scope of responsibility, skill-level and performance. In December 2022, our compensation committee reviewed the base salaries of our named executive officers, taking into consideration a competitive market analysis prepared by its compensation consultant using the then-current peer group and the other factors described in “-Compensation-Setting Process - Setting Target Total Direct Compensation” above. Following this review, our compensation committee approved base salary increases for each of our named executive officers, effective January 1, 2023, to bring their base salaries to levels that were comparable to those of similarly-situated executives at the companies in our compensation peer group. The base salaries paid to our named executive officers during 2023 are set forth in the “Executive Compensation Tables —2023 Summary Compensation Table” below.

  20. Annual Performance-Based Cash Bonuses

    Annual Performance-Based Cash Bonuses We use an annual performance-based cash bonus plan to motivate our employees, including our named executive officers, to achieve our key annual corporate business objectives. In December 2022, our compensation committee and Board of Directors adopted an annual cash bonus plan for 2023 (the “2023 Cash Bonus Plan”) to provide financial incentives related to the achievement of principal goals set forth in our 2023 annual operating plan. The 2023 Cash Bonus Plan provided for bonus payments to be funded based on our level of achievement with respect to corporate performance goals (as described below). For purposes of the 2023 Cash Bonus Plan, cash bonus payments were based upon a specific percentage of each participant’s base salary. In December 2022, our compensation committee reviewed the target annual cash bonus opportunities of our named executive officers, taking into consideration the factors described in “Compensation-Setting Process - Setting Target Total Direct Compensation” above and approved the target annual cash bonus opportunities for each of the named executive officers. The table below shows the 2023 target annual cash bonus opportunities for our named executive officers, expressed as a percentage of base salary:

  21. Annual Performance-Based Cash Bonuses

    | Named Executive Officer | 2023 Target Annual Cash Bonus Opportunity (as a percentage of base salary) | | Daniel Faga | 55% | | Paul Lizzul M.D., Ph.D. | 40% | | Eric Loumeau, J.D. | 40% |

  22. Corporate Performance Goals

    Corporate Performance Goals Participants in the 2023 Cash Bonus Plan were eligible to receive a bonus payment based upon the attainment of one or more corporate performance goals that were selected and approved by our compensation committee and which related to financial and operational metrics that were important to us. The corporate performance component of the 2023 Cash Bonus Plan was to be funded based on our actual results for the year as evaluated against these performance goals and account for 100% of the Named Executive Officers total bonus opportunity. In December 2022, our compensation committee and Board of Directors approved corporate performance goals in each of the following categories for purposes of the 2023 Cash Bonus Plan: i.Rosnilimab Program – Initiate Phase 2 trial in RA by Q3 2023 and recommend whether to initiate a second Phase 2 trial by the end of 2023; ii.BTLA Agonist (ANB032) Program – Initiate Phase 2 trial in AD in Q2 2023; iii.Portfolio Planning and Corp. Development – Align on multi-year integrated clinical development plan across the portfolio; iv.Imsidolimab (anti-IL-36R) Program – Gemini-1 primary endpoint by October 31, 2023; v.Early Portfolio – ANB033 (CD122 antagonist) on track to initiate a Phase1 clinical trial in 2024; vi.Finance - manage operating expenses within approved budget; and vii.Organizational Talent and Culture – Retain, develop and recruit leadership to support future growth expectations and ensure consistent company culture, vision and values. Each corporate performance goal was evaluated and selected according to our compensation committee’s assessment of its relative importance to the execution of our annual business plan. Our primary focus was on our clinical development and research programs, as they are key drivers of our business. We allocated the remainder of the bonus opportunity to managing operations such as finance, retaining, developing and recruiting leadership to support future growth, and ensuring consistent company culture, which are also necessary for the execution of our business plan. For purposes of the 2023 Cash Bonus Plan, our compensation committee reserved the discretion to consider the level of achievement of a particular performance goal, or other corporate achievements during 2023 when determining the actual funding level for this component of the plan. This discretion enables our executive officers to focus on the pre-established corporate goals, while also providing flexibility for our executive officers to be nimble in responding to new developments and setbacks, which is necessary for the execution of our business plan. In December 2023, our compensation committee reviewed performance against the corporate goals. Our compensation committee recognized the effective execution and significant progress made on certain critical business goals, including the advancement of our clinical programs and the achievement of our internal research goals and those related to our partnered programs. Accordingly, our compensation committee recommended and our board of directors determined that our corporate goals were achieved at 100% of target. The 2023 bonuses earned by our named executive officers are set forth in “Executive Compensation Tables – 2023 Summary Compensation Table” below.

  23. Long-Term Incentive Compensation

    Long-Term Incentive Compensation Our long-term, equity-based incentive awards are designed to align the interests of our named executive officers with the interests of our stockholders. Because vesting is generally subject to continued service over a period of several years following the date of grant, our equity-based incentives also serve as a retention device for our named executive officers. We generally provide initial equity-based incentive awards in connection with the commencement of employment of our named executive officers as an inducement to commencement of employment. We award annual equity-based incentive awards at or shortly following the end of each year. Awards are subject to vesting over a period of multiple years to provide long-term incentives to deliver sustained stockholder value and to facilitate retention. From time to time, we may also grant awards with performance-based metrics to incentivize and reward targeted corporate goals. The compensation committee views stock options as inherently performance-based compensation that provides a direct link between executive pay and stockholder return, as the value realized, if any, by the executive, is dependent upon, and directly proportionate to, appreciation in stock price over the exercise period and throughout the remaining term prior to exercise. Additionally, stock options will not provide value to the holder if the value of our stock price does not increase after the award is granted. For our 2023 executive long-term incentive mix, the compensation committee determined, in consultation with Compensia, to again include restricted stock units (“RSUs”). The compensation committee noted that RSUs are becoming more prevalent in the pre-commercial biotech space in which we primarily compete for talent. Further, RSUs can provide a strong retention vehicle, particularly during any periods of stock price volatility. Finally, the compensation committee noted the additional benefit of reducing share usage and managing our available equity pool more efficiently. As such, the compensation committee approved a mix of stock options and RSUs for executives in 2023. The RSUs will vest in annual equal installments over a four-year period. Typically, we have granted equity based awards of our common stock to our named executive officers as part of our compensation committee’s annual review of executive compensation. To date, our compensation committee has not applied a rigid formula in determining the size of these equity awards. Instead, our compensation committee determines the amount of the equity award for each named executive officer after taking into consideration a compensation analysis performed by its compensation consultant using market data, the equity award recommendations of our Chief Executive Officer (except with respect to his own award), the amount of equity compensation held by the named executive officer (including the current economic value of his or her unvested equity and the ability of these unvested holdings to satisfy our retention objectives), and the factors described in “Compensation Setting Process - Setting Target Total Direct Compensation” above. January 2023 “Refresh” Equity Awards In January 2023, based upon the considerations and analysis described above, our compensation committee determined to grant options to purchase shares of our common stock and RSUs to our named executive officers in amounts that it considered to be consistent with our compensation philosophy and its desired market positioning and which also recognized the performance of each of our named executive officers. The stock options and RSUs granted to our named executive officers in January 2023 were as follows:

  24. Long-Term Incentive Compensation

    | Named Executive Officer | Number of Shares Underlying Stock Options (1) (#) | Number of RSUs(2) (#) | | Daniel Faga | 194,900 | 71,400 | | Paul Lizzul M.D., Ph.D. | 67,070 | 24,580 | | Eric Loumeau, J.D. | 60,530 | 22,180 |

  25. Long-Term Incentive Compensation

    (1) The options to purchase shares of our common stock vest and become exercisable over a four-year period, with 25% of the shares of our common stock subject to the options vesting on the first anniversary of the date of grant and 1/48th of the shares of our common stock subject to the options vesting in equal monthly installments thereafter, contingent upon the named executive officer remaining continuously employed by us through each applicable vesting date. (2) The RSUs vest in annual equal installments over four years, contingent upon the named executive officer remaining continuously employed by us through each applicable vesting date.

  26. Summary Compensation Table

    Summary Compensation Table The following table presents summary information regarding the total compensation that was awarded to, earned by or paid to our named executive officers for services rendered during the years ended December 31, 2023 and 2022.

  27. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Stock Awards(1) ($) | Option Awards(1) ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | Daniel Faga(2) | 2023 | 640,605 | 1,658,622 | 3,287,320 | 352,333 | 1,523,040(3)(4) | 7,461,920 | | President and Chief Executive Officer and Director | 2022 | 483,578(5) | 23,506,640 | 200,618(6) | 240,609 | 8,905(4) | 24,440,350 | | Paul Lizzul | 2023 | 509,479 | 570,993 | 1,131,250 | 203,792 | 25,603(7) | 2,441,117 | | Chief Medical Officer | 2022 | 471,740 | 283,440 | 2,872,730 | 174,544 | 10,074(7) | 3,812,528 | | Eric Loumeau | 2023 | 493,823 | 515,241 | 1,020,941 | 197,529 | 30,650(8) | 2,258,185 | | Chief Legal Officer | 2022 | 474,830 | 283,440 | 2,872,730 | 197,648 | 13,115(8) | 3,841,763 |

  28. Summary Compensation Table

    _____________________ (1) The amounts reported in the Option Awards and Stock Awards columns represent the grant date fair value of the stock options and RSUs granted to the named executive officers during the years ended December 31, 2023 and 2022 as computed in accordance with ASC Topic 718. The assumptions used in calculating the grant date fair value of the stock options reported in the Option Awards column are set forth in Note 8 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. Note that the amounts reported in these columns reflect the accounting cost for these stock options and RSUs, and do not correspond to the actual economic value that may be received by our named executive officers from such awards. (2) Mr. Faga was appointed Interim President and Chief Executive Officer, effective March 21, 2022 and President and Chief Executive Officer, effective August 3, 2023. (3) Includes a $1,500,000 transition bonus paid to Mr. Faga in connection with his transition from Interim President and Chief Executive Officer to President and Chief Executive Officer. In the event that Mr. Faga’s employment is terminated by the Company due to “cause” or by Mr. Faga without “good reason” prior to August 4, 2024, Mr. Faga will be required to re-pay the transition bonus, and will be required to re-pay a prorated amount if his employment is terminated with “cause” or he resigns without “good reason” after August 4, 2024 but before August 4, 2025. (4) Includes 401(k) matching contributions and group term life insurance premiums paid by us on behalf of Mr. Faga. (5) Includes $10,000 in director fees paid to Mr. Faga for his service as a director prior to his appointment Interim President and Chief Executive Officer on March 21, 2022. For Mr. Faga’s compensation as a director, see the section above titled “Proposal No. 1 Election of Class I Directors — Non-Employee Director Compensation.” (6) Includes $200,618 of option awards granted to Mr. Faga for his service as a director, prior to his appointment as Interim President and Chief Executive Officer on March 21, 2022. For Mr. Faga’s compensation as a director, see the section above titled “Proposal No. 1 Election of Class I Directors — Non-Employee Director Compensation.” (7) Reflects 401(k) matching contributions and group term life insurance premiums paid by us on behalf of Dr. Lizzul. (8) Reflects 401(k) matching contributions and group term life insurance premiums paid by us on behalf of Mr. Loumeau.

  29. Outstanding Equity Awards at Fiscal Year-End Table

    Outstanding Equity Awards at Fiscal Year-End Table The following table presents, for each of the named executive officers, information regarding outstanding stock options and RSUs held as of December 31, 2023.

  30. Outstanding Equity Awards at Fiscal Year-End Table

    | | Option Awards | | | | | Stock Awards | | | Name | Grant Date(1) | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | | Daniel Faga(3) | 11/26/2021 | 2,321 | — | 31.12 | 11/25/2031 | | | | | 11/26/2021 | 7,639 | 3,361 | 31.12 | 11/25/2031 | | | | | 02/10/2022 | 9,200 | — | 30.44 | 02/09/2032 | | | | | 3/21/2022 | | | | | 887,043 | 19,000,461 | | | 01/06/2023 | | | | | 71,400 | 1,529,388 | | | 01/06/2023 | — | 194,900 | 23.23 | 01/05/2033 | | | | Paul Lizzul (4) | 07/30/2020 | 76,875 | 13,125 | 18.50 | 07/29/2030 | | | | | 02/10/2021 | 31,875 | 13,125 | 29.70 | 02/09/2031 | | | | | 02/10/2021 | 10,000 | — | 29.70 | 02/09/2031 | | | | | 02/10/2022 | 32,083 | 37,917 | 30.44 | 02/09/2032 | | | | | 12/15/2022 | — | 15,000 | 28.64 | 12/14/2032 | | | | | 12/15/2022 | 15,000 | — | 28.64 | 12/14/2023 | | | | | 09/14/2022 | | | | | 6,000 | 128,520 | | | 01/06/2023 | | | | | 24,580 | 526,504 | | | 01/06/2023 | — | 67,070 | 23.23 | 01/05/2033 | | | | Eric Loumeau(5) | 08/06/2018 | 40,000 | — | 78.18 | 08/05/2028 | | | | | 02/08/2019 | 35,000 | — | 68.89 | 02/07/2029 | | | | | 08/18/2019 | 17,500 | — | 49.20 | 08/17/2029 | | | | | 12/06/2019 | 83,000 | — | 14.02 | 12/05/2029 | | | | | 07/13/2020 | 6,042 | 1,458 | 20.16 | 07/12/2030 | | | | | 02/10/2021 | 10,000 | — | 29.70 | 02/09/2031 | | | | | 02/10/2021 | 31,875 | 13,125 | 29.70 | 02/09/2031 | | | | | 02/10/2022 | 32,083 | 37,917 | 30.44 | 02/09/2032 | | | | | 12/15/2022 | — | 15,000 | 28.64 | 12/14/2032 | | | | | 12/15/2022 | 15,000 | — | 28.64 | 12/14/2032 | | | | | 09/14/2022 | | | | | 6,000 | 128,520 | | | 01/06/2023 | | | | | 22,180 | 475,096 | | | 01/06/2023 | — | 60,530 | 23.23 | 01/05/2033 | | |

  31. Outstanding Equity Awards at Fiscal Year-End Table

    ______________________ (1) Except where otherwise noted, the underlying shares of each option vest over four years, with 1/4 of the underlying shares vesting on the first calendar anniversary of the grant date and, thereafter, 1/48 of the underlying shares vest on the same day of each succeeding calendar month, subject to the optionee’s employment through each applicable vesting date, such that 100% of the underlying shares will have vested on the fourth calendar anniversary of the grant date. (2) Based on the closing price of our common stock on December 29, 2023, the last trading date of 2023, of $21.42. (3) The options vest as to their underlying shares as follows: (i) the shares underlying the 2,321 options granted on November 26, 2021 have fully vested; (ii) of the 11,000 shares underlying the option granted on November 26, 2021, 1/36 vested on December 26, 2021, and 1/36 vest on the twenty-sixth day of each succeeding calendar month, starting January 26, 2022; (iii) the 9,200 shares underlying the option granted on February 10, 2022 have fully vested; (iv) of the 194,900 shares underlying the option granted on January 6, 2023, 1/4 vested on January 6, 2024, and 1/48 vest on the sixth of each succeeding calendar month, starting February 6, 2024; (v) the shares underlying the 887,043 RSUs granted on March 21, 2022 vested in full on March 21, 2024 and (vi) of the shares underlying the 71,400 RSUs granted on January 6, 2023, 1/4 vested on January 6, 2024 and 1/4 will vest annually beginning on January 6, 2025. If we experience a change in control and Mr. Faga is terminated without “cause” or resigns for “good reason” (each as defined in the Faga Employment Agreement (as defined below)) upon the occurrence of, or within 13 months following, such change of control, and provided that Mr. Faga delivers a signed settlement and general release in favor of us and satisfies all conditions to make such release effective, then each of Mr. Faga’s then currently outstanding equity awards will vest in full. (4) The options vest as to their underlying shares as follows: (i) the shares underlying the 10,000 options granted on February 10, 2021 have fully vested; (ii) of the 90,000 shares underlying the option granted on July 30, 2020, 1/4 vested on July 30, 2021, and 1/48 vest on the thirtieth day of each succeeding calendar month, starting August 30, 2021; (iii) of the 45,000 shares underlying one of the options granted on February 10, 2021, 1/4 vested on February 10, 2022, and 1/48 vest on the tenth day of each succeeding calendar month, starting March 10, 2022; (iv) of the 70,000 shares underlying the options granted on February 10, 2022, 1/4 vested on February 10, 2023, and 1/48 vest on the tenth day of each succeeding calendar month, starting March 10, 2023; (v) 15,000 shares underlying one of the options granted on December 15, 2022 vested upon achievement of certain performance conditions; (vi) 15,000 shares underlying one of the options granted on December 15, 2022 vest upon achievement of certain performance conditions; (vii) of the 67,070 shares underlying the option granted on January 6, 2023, 1/4 vested on January 6, 2024, and 1/48 vest on the sixth of each succeeding calendar month, starting February 6, 2024, (viii) of the shares underlying the 12,000 RSUs granted on September 14, 2022, 1/2 vested on September 14, 2023 and 1/2 vest on September 14, 2024 and (ix) of the of the shares underlying the 24,580 RSUs granted on January 6, 2023, 1/4 vested on January 6, 2024 and 1/4 will vest annually beginning on January 6, 2025. If we experience a change in control and Dr. Lizzul is terminated without “cause” or resigns for “good reason” (each as defined in the Lizzul Employment Agreement (as defined below)) upon the occurrence of, or within 13 months following, such change of control, and provided that Dr. Lizzul delivers a signed settlement and general release in favor of us and satisfies all conditions to make such release effective, then each of Dr. Lizzul’s then currently outstanding equity awards will vest in full. (5) The options vest as to their underlying shares as follows: (i) the shares underlying the 40,000 options granted on August 6, 2018 have fully vested; (ii) shares underlying the 35,000 options granted on February 8, 2019 have fully vested; (iii) the shares underlying the 17,500 options granted on August 18, 2019 have fully vested; (iv) the shares underlying the 83,000 options granted on December 6, 2019 have fully vested; (v) of the 7,500 shares underlying the options granted on July 13, 2020, 1/4 vested on July 13, 2021, and 1/48 vest on the thirteenth day of each succeeding calendar month, starting August 13, 2021; (vi) 10,000 shares underlying the options granted on February 10, 2021 have fully vested; (vii) of the 45,000 shares underlying the options granted on February 10, 2021, 1/4 vested on February 10, 2022, and 1/48 vest on the tenth day of each succeeding calendar month, starting March 10, 2022; (viii) of the 70,000 shares underlying the options granted on February 10, 2022,1/4 vested on February 10, 2023, and 1/48 vest on the tenth day of each succeeding calendar month, starting March 10, 2023; (ix) 15,000 shares underlying one of the options granted on December 15, 2022, vested upon achievement of certain performance conditions; (x) 15,000 shares underlying one of the options granted on December 15, 2022, vest upon achievement of certain performance conditions; (xi) of the 60,530 shares underlying the option granted on January 6, 2023, 1/4 vested on January 6, 2024, and 1/48 vest on the sixth of each succeeding calendar month, starting February 6, 2024, (xii) of the shares underlying the 12,000 RSUs granted on September 14, 2022, 1/2 vested on September 14, 2023 and 1/2 vest on September 14, 2024, and (xiii) of the of the shares underlying the 22,180 RSUs granted on January 6, 2023, 1/4 vested on January 6, 2024 and 1/4 will vest annually beginning on January 6, 2025. If we experience a change in control and Mr. Loumeau is terminated without “cause” or resigns for “good reason” (each as defined in the Loumeau Employment Agreement (as defined below)) upon the occurrence of, or within 13 months following, such change of control, and provided that Mr. Loumeau delivers a signed settlement and general release in favor of us and satisfies all conditions to make such release effective, then each of Mr. Loumeau’s then currently outstanding equity awards will vest in full.

  32. Potential Payments upon Termination or Change in Control

    Potential Payments upon Termination or Change in Control