ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State of Incorporation) |
(I.R.S. Employer Identification No.) | |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading symbol |
Name of exchange registered | ||
☒ | Accelerated Filer | ☐ | ||||
Non-accelerated filer |
☐ | Smaller reporting company | ||||
Emerging growth company |
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Name |
Age |
Position | ||
Executive Officers: |
||||
Stephen J. Farr, Ph.D. |
63 | President, Chief Executive Officer and Director | ||
Michael P. Smith |
53 | Executive Vice President, Chief Financial Officer and Treasurer | ||
Bradley M. Galer, Ph.D. |
59 | Executive Vice President, Chief Medical Officer | ||
Gail M. Farfel, Ph.D. |
57 | Executive Vice President, Chief Development Officer | ||
Shawnte M. Mitchell |
44 | Executive Vice President, General Counsel and Corporate Secretary | ||
Ashish M. Sagrolikar |
55 | Executive Vice President, Chief Commercial Officer | ||
Non-Employee Directors: |
||||
Louis C. Bock |
57 | Director | ||
James B. Breitmeyer, M.D., Ph.D. |
68 | Director | ||
Cam L. Garner |
72 | Chairman of the Board of Directors | ||
Caroline M. Loewy |
55 | Director | ||
Erle T. Mast |
59 | Director | ||
Mary E. Stutts |
66 | Director | ||
Renee P. Tannenbaum, Pharm.D., MBA |
70 | Director | ||
Denelle J. Waynick |
54 | Director | ||
Mark Wiggins |
66 | Director |
• | selecting and engaging our independent registered public accounting firm; |
• | evaluating the qualifications, independence and performance of our independent registered public accounting firm; |
• | approving the audit and non-audit services to be performed by our independent registered public accounting firm; |
• | reviewing the design, implementation, adequacy and effectiveness of our internal controls and our critical accounting policies; |
• | discussing with management and the independent registered public accounting firm the results of our annual audit and the review of our quarterly unaudited financial statements; |
• | reviewing, overseeing and monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to financial statements or accounting matters; |
• | reviewing with management and our auditors any earnings announcements and other public announcements regarding our results of operations; |
• | preparing the report that the SEC requires in our annual proxy statement; |
• | reviewing and approving any related party transactions and reviewing and monitoring compliance with our code of conduct and ethics; and |
• | reviewing and evaluating, at least annually, the performance of the audit committee and its members including compliance of the audit committee with its charter. |
• | evaluating the composition, size and governance of our board of directors and its committees and making recommendations regarding future planning and the appointment of directors to our committees; |
• | administering a policy for considering stockholder nominees for election to our board of directors; |
• | evaluating and recommending candidates for election to our board of directors; |
• | developing guidelines for board compensation; |
• | overseeing our board of directors’ performance and self-evaluation process; |
• | reviewing our corporate governance principles and providing recommendations to the board regarding possible changes; and |
• | reviewing and evaluating, at least annually, the performance of the nominating/corporate governance committee and its members including compliance of the nominating/corporate governance committee with its charter. |
ITEM 11. |
EXECUTIVE COMPENSATION |
• | Stephen J. Farr, Ph.D., our Chief Executive Officer and President; |
• | Michael P. Smith, our Executive Vice President, Chief Financial Officer and Treasurer; |
• | Shawnte M. Mitchell, our Executive Vice President, General Counsel and Corporate Secretary; |
• | Bradley S. Galer, M.D., our Executive Vice President and Chief Medical Officer; |
• | Ashish M. Sagrolikar, our Executive Vice President, Chief Operating Officer; and |
• | Gail M. Farfel, Ph.D., our Executive Vice President, Chief Development Officer. |
• | To attract, engage and retain an executive team who will provide leadership for our future success by providing competitive total pay opportunities. |
• | To establish a direct link between our business results, individual executive performance and total executive compensation. |
• | To align the interests of our executive officers with those of our stockholders. |
Description and Purpose | ||
Base Salary |
Competitive fixed cash compensation used to attract and retain talented executives. | |
Annual Cash Incentive Awards |
Cash incentives designed to reward executive officers for successful corporate performance against board approved annual bonus targets and, for our named executive officers other than our Chief Executive Officer, individual performance toward achieving corporate goals. | |
Annual Long-Term Equity Awards |
Stock option, RSU and PSU awards subject to time-based and/or performance-based vesting designed to align each executive officer’s incentives with stockholder value creation. |
• | conducting market research and analysis of current practices of comparable public companies to assist the compensation committee in developing director and executive compensation levels; |
• | reviewing our peer group to determine whether additional or different peer companies or groups are necessary to provide appropriate information on market practices and compensation levels; |
• | advising with regard to the amendment and restatement of our equity plan during 2021; and |
• | providing general information concerning director and executive compensation trends and developments. |
Market Capitalization |
Market capitalization between $350 million and $3.5 billion, when the peer group was first approved by the compensation committee for 2021 compensation purposes. Zogenix had a 30-day average market capitalization of $1.1 billion as of such date, and ranked in the 16th percentile relative to the peer group on this metric. | |
Sector and Stage |
Recently commercial publicly-traded biopharma/biotech companies. Zogenix was considered a commercial stage company at the time the peer group was approved. | |
Revenue |
Below $200 million in revenue. Zogenix had trailing 12-month revenue of $5 million at the time the peer group was approved and ranked in the 9th percentile relative to the peer group on this metric. | |
Headcount |
Less than 500 employees. Zogenix had 327 employees as of the same date and ranked in the 10 th percentile relative to the peer group on this metric. | |
Geographic Location |
Focus on companies in the Bay Area, Boston or other biotech “hub” locations. Zogenix’s headquarters is in Emeryville, California. |
Aerie Pharmaceuticals Alector Amicus Therapeutics Atara Biotherapeutics Biohaven Pharmaceutical Cytokinetics Deciphera Pharmaceuticals Dicema Pharmaceuticals Enanta Pharmaceuticals Epizyme |
Esperion Therapeutics FibroGen Global Blood Therapeutics GW Pharmaceuticals Heron Therapeutics Insmed Karyopharm Therapeutics Kronos Bio Sangamo Therapeutics Xencor |
Named Executive Officer |
2021 Base Salary Approved in February 2021 |
|||
Dr. Farr |
$ | 647,900 | ||
Mr. Smith |
$ | 453,200 | ||
Ms. Mitchell |
$ | 443,000 | ||
Dr. Galer |
$ | 468,000 | ||
Mr. Sagrolikar |
$ | 455,000 | (1) | |
Dr. Farfel |
$ | 462,000 |
(1) | Mr. Sagrolikar’s annual base salary was further increased in August 2021 to $490,000 in connection with his promotion to Executive Vice President and Chief Operating Officer. |
2021 CORPORATE OBJECTIVE |
WEIGHTING |
2021 HIGHLIGHTS |
PERFORMANCE |
WEIGHTED PERFORMANCE | ||||
FINTEPLA ® DRAVET SYNDROME |
35% |
• Global revenue met targeted level • Launched in Germany, UK and Italy and completed launch preparation for France • J-NDA submission in fourth quarter• Established distribution partnerships or named patient programs • Increased awareness among target US health care providers |
102% |
35.5% | ||||
FINTEPLA ® INDICATION EXPANSION |
25% |
• LGS supplemental NDA submitted |
112% |
28% | ||||
|
|
• LGS EU Type II variation submitted • LGS launch preparations in place |
|
| ||||
MT1621 DEVELOPMENT |
20% |
• Completed development of drug substance and product manufacturing to support future regulatory submissions |
87% |
17.3% | ||||
|
|
• Held successful health authority meetings to clarify requirements for future regulatory submissions |
|
| ||||
FINANCIAL PERFORMANCE |
10% |
• Maintain cash operating expenses within budget and year end cash reserves at targeted levels |
100% |
10% | ||||
COMPANY CULTURE |
10% |
• 85% response rate to employee survey and program to address need identified from results • Create and implement equitable recruitment, retention and promotion practices |
100% |
10% | ||||
TOTAL |
|
|
|
101% |
Target Cash Incentive Award for 2021 |
Annual Cash Incentive Award for 2021 |
|||||||||||||||||||||
Named Executive Officer |
Percentage of Base Salary |
Corporate Performance Weighting |
Performance Percentage |
Individual Performance Weighting |
Individual Performance Percentage |
|||||||||||||||||
Dr. Farr |
65% | 100 | % | 101 | % | 0 | % | — | $ | 425,346 | ||||||||||||
Mr. Smith |
45% | 90 | % | 101 | % | 10 | % | 101 | % | $ | 205,979 | |||||||||||
Ms. Mitchell |
45% | 90 | % | 101 | % | 10 | % | 101 | % | $ | 201,344 | |||||||||||
Dr. Galer |
45% | 90 | % | 101 | % | 10 | % | 101 | % | $ | 212,706 | |||||||||||
Mr. Sagrolikar |
50% | 90 | % | 101 | % | 10 | % | 101 | % | $ | 247,450 | |||||||||||
Dr. Farfel |
45% | 90 | % | 101 | % | 10 | % | 101 | % | $ | 209,979 |
• | Stock options are an important vehicle for tying executive pay to performance, because they deliver future value only if the value of our common stock increases above the exercise price. As a result, they provide strong incentives for our executive officers to increase the value of our common stock over the long term, and they tightly align the interests of our executives with those of our stockholders. |
• | RSU awards are granted because they are less dilutive to our stockholders, as fewer shares of our common stock are granted to achieve an equivalent value relative to stock options, and because RSU awards are an effective retention tool that maintain value even in cases where the share price is trading lower than the initial grant price. |
• | PSU awards are granted to align the compensation of our executive officers with company performance, as further described below. |
Name and Principal Position |
Year |
Salary ($) |
Bonus ($) |
Stock Awards ($)(1) |
Option Awards ($)(1) |
Non-Equity Incentive Plan Compensation ($)(2) |
All Other Compensation ($)(3) |
Total ($) |
||||||||||||||||||||||||
Stephen J. Farr, Ph.D. |
2021 | 642,425 | — | 1,750,871 | 1,134,235 | 425,346 | 13,381 | 3,966,258 | ||||||||||||||||||||||||
Chief Executive Officer |
2020 | 615,750 | — | 752,400 | 2,977,359 | 390,600 | 11,400 | 4,747,509 | ||||||||||||||||||||||||
and President |
2019 | 578,750 | — | 1,053,200 | 8,425,600 | 280,800 | 8,400 | 10,346,750 | ||||||||||||||||||||||||
Michael P. Smith |
2021 | 449,900 | — | 469,000 | 303,808 | 205,979 | 8,382 | 1,437,069 | ||||||||||||||||||||||||
Executive Vice President, Chief Financial Officer, |
2020 | 433,000 | 177,840 | 703,739 | 190,870 | 9,723 | 1,515,172 | |||||||||||||||||||||||||
Treasurer and Secretary |
2019 | 409,000 | — | 427,863 | 3,357,075 | 156,700 | 7,639 | 4,358,277 | ||||||||||||||||||||||||
Shawnte M. Mitchell |
2021 | 439,750 | — | 469,000 | 303,808 | 201,344 | 65,758 | 1,479,660 | ||||||||||||||||||||||||
Executive Vice President, General Counsel and Corporate Secretary |
2020 | 301,326 | — | — | 1,914,759 | 186,530 | 96,772 | 2,499,387 | ||||||||||||||||||||||||
Bradley S. Galer, M.D. |
2021 | 463,500 | — | 637,100 | 364,569 | 212,706 | — | 1,677,875 | ||||||||||||||||||||||||
Executive Vice President |
2020 | 444,375 | 177,840 | 703,739 | 197,240 | — | 1,523,194 | |||||||||||||||||||||||||
and Chief Medical Officer |
2019 | 424,375 | — | 427,863 | 3,357,075 | 157,700 | — | 4,367,013 | ||||||||||||||||||||||||
Ashish M. Sagrolikar (5) |
2021 | 461,646 | — | 1,068,600 | 796,825 | 247,450 | 14,500 | 2,589,021 | ||||||||||||||||||||||||
Executive Vice President |
2020 | 416,450 | 273,600 | 1,082,676 | 186,280 | 14,250 | 1,973,256 | |||||||||||||||||||||||||
and Chief Operating Officer |
2019 | 389,350 | — | 427,863 | 3,357,075 | 144,200 | 7,687 | 4,326,175 | ||||||||||||||||||||||||
Gail M. Farfel, Ph.D. |
2021 | 456,500 | — | 562,800 | 364,569 | 209,979 | 14,500 | 1,608,348 | ||||||||||||||||||||||||
Executive Vice President |
2020 | 433,000 | — | 164,160 | 631,561 | 190,870 | 14,250 | 1,433,841 | ||||||||||||||||||||||||
and Chief Research Officer |
2019 | 409,000 | — | 427,863 | 3,357,075 | 148,300 | 11,200 | 4,353,438 |
(1) | The amounts shown in these columns constitute stock options, RSUs and PSUs, as applicable, granted under our equity incentive programs. The amounts are valued based on the aggregate grant date fair value of the award in accordance with ASC 718. See Note 14 to our consolidated financial statements in this Annual Report for a discussion of the relevant assumptions used in determining the grant date fair value of equity awards pursuant to ASC 718. These amounts do not reflect whether the recipient has actually realized or will realize a financial benefit from the awards (such as by exercising stock options). Whether, and to what extent, a named executive officer realizes a |
financial benefit from the awards will depend on our actual operating performance, stock price fluctuations and the named executive officer’s continued service to us. With respect to the PSUs granted to the named executive officers during 2021, the grant date fair value, assuming achievement in full of all of the performance objectives, would be as follows: Dr. Farr, $875,435.40; Mr. Smith, $234,500; Ms. Mitchell, $234,500; Dr. Galer, $281,400; Mr. Sagrolikar, $469,000; and Dr. Farfel, $281,400. |
(2) | These amounts represent performance bonuses earned under our executive bonus program, which is described above under “Compensation Discussion and Analysis — Performance Bonuses.” |
(3) | The amounts represent 401(k) plan matching contributions paid by us and generally available to all full-time U.S. employees and, for Ms. Mitchell for 2020, relocation expenses in the amount of $61,203 and related tax gross-ups for such relocation expenses in the amount of $27,447. |
Name |
Grant Date |
Date of Approval of Equity Awards |
Estimated Future Payouts Under Non-Equity IncentivePlan Awards(1) |
Estimated Future Payouts Under Equity Incentive Plan Awards(2) |
All Other Stock Awards Number of Shares of Stock or Units (#)(3) |
All Other Option Awards Number of Securities Underlying Options (#)(4) |
Exercise or Base Price of Option Award ($/sh) |
Grant Date Fair Value of Stock and Option Awards $)(5) |
||||||||||||||||||||||||||||||||||||||||
Threshold $ |
Target $ |
Maximum $ |
Threshold # |
Target # |
Maximum # |
|||||||||||||||||||||||||||||||||||||||||||
Stephen J. Farr, Ph.D. |
— | — | — | 421,135 | 526,419 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
3/26/2021 | 3/25/2021 | — | — | — | — | — | — | — | 93,335 | 18.76 | 1,134,235 | |||||||||||||||||||||||||||||||||||||
3/26/2021 | 3/25/2021 | — | — | — | — | — | — | 46,665 | — | — | 875,435.40 | |||||||||||||||||||||||||||||||||||||
3/26/2021 | 3/25/2021 | — | — | — | — | 46,665 | — | — | — | — | 875,435.40 | |||||||||||||||||||||||||||||||||||||
Michael P. Smith |
— | — | — | 203,940 | 254,925 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
3/26/2021 | 3/25/2021 | — | — | — | — | — | — | — | 25,000 | 18.76 | 303,808 | |||||||||||||||||||||||||||||||||||||
3/26/2021 | 3/25/2021 | — | — | — | — | — | — | 12,500 | — | — | 234,500 | |||||||||||||||||||||||||||||||||||||
3/26/2021 | 3/25/2021 | — | — | — | — | 12,500 | — | — | — | — | 234,500 | |||||||||||||||||||||||||||||||||||||
Shawnte M. Mitchell |
— | — | — | 199,350 | 249,188 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
3/26/2021 | 3/25/2021 | — | — | — | — | — | — | — | 25,000 | 18.76 | 303,808 | |||||||||||||||||||||||||||||||||||||
3/26/2025 | 3/25/2021 | — | — | — | — | — | — | 12,500 | — | — | 234,500 | |||||||||||||||||||||||||||||||||||||
3/26/2021 | 3/25/2021 | — | — | — | — | 12,500 | — | — | — | — | 234,500 | |||||||||||||||||||||||||||||||||||||
Bradley S. Galer, M.D. |
— | — | — | 210,600 | 263,250 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
3/26/2021 | 3/25/2021 | — | — | — | — | — | — | — | 30,000 | 18.76 | 364,569 | |||||||||||||||||||||||||||||||||||||
3/26/2021 | 3/25/2021 | — | — | — | — | — | — | 15,000 | — | — | 281,400 | |||||||||||||||||||||||||||||||||||||
3/26/2025 | 3/25/2021 | — | — | — | — | 15,000 | — | — | — | — | 281,400 | |||||||||||||||||||||||||||||||||||||
8/9/2021 | 8/3/2021 | — | — | — | — | — | — | 5,000 | — | — | 74,300 | |||||||||||||||||||||||||||||||||||||
Ashish M. Sagrolikar |
— | — | — | 227,500 | 284,375 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
3/26/2021 | 3/25/2021 | — | — | 50,000 | 18.76 | 607,615 | ||||||||||||||||||||||||||||||||||||||||||
3/26/2021 | 3/25/2021 | — | — | — | 25,000 | — | — | 469,000 | ||||||||||||||||||||||||||||||||||||||||
3/26/2021 | 3/25/2021 | — | — | — | — | 25,000 | — | — | — | — | 469,000 | |||||||||||||||||||||||||||||||||||||
8/9/2021 | 8/3/2021 | — | — | — | 20,000 | 14.86 | 189,210 | |||||||||||||||||||||||||||||||||||||||||
Gail M. Farfel, Ph.D. |
— | — | — | 207,900 | 259,875 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
3/26/2021 | 3/25/2021 | — | — | — | — | — | — | — | 30,000 | 18.76 | 303,808 | |||||||||||||||||||||||||||||||||||||
3/26/2021 | 3/25/2021 | — | — | — | — | — | — | 15,000 | — | — | 281,400 | |||||||||||||||||||||||||||||||||||||
3/26/2021 | 3/25/2021 | — | — | — | — | 15,000 | — | — | — | — | 281,400 |
(1) | Amounts in this column represent target and maximum cash performance bonus opportunities for the named executive officers in 2021 under our executive bonus program, which is described above under “— Compensation Discussion and Analysis — Performance Bonuses.” |
(2) | Amounts represent the target number of shares underlying PSUs based on performance objectives related to regulatory and commercial objectives: 35% of the PSUs will vest upon the achievement of trailing annual sales of $100 million prior to March 1, 2025, 30% of the PSUs will vest upon the achievement of trailing annual sales of $150 million prior to March 1, 2025, and 35% of the PSUs will vest upon sNDA approval for LGS prior to March 1, 2025, in each case subject to continued employment through the applicable vesting date. In addition, all of the PSUs shall vest upon a change in control. |
(3) | The RSUs vest over a four-year period at the rate of 25% of the RSUs on each of March 15, 2022, 2023, 2024 and 2025, subject to continuous service through each vesting date. For a description of the accelerated vesting applicable to the foregoing equity awards, see “—Employment Agreements” below. |
(4) | The option awards vest in equal monthly installments over the four-year period of continuous service following the grant date. All option awards have a 10-year term from the grant date. For a description of the accelerated vesting applicable to the foregoing equity awards, see “Employment Agreements” below. |
(5) | The applicable grant-date fair value of each option, RSU and PSU award was calculated in accordance with ASC 718. For a discussion of our valuation methodology used, see Note 14 to our consolidated financial statements for the year-end December 31, 2021 included in this Annual Report. These amounts do not reflect whether the recipient has actually realized or will realize. Whether, and to what extent, a named executive officer realizes a financial benefit from the awards will depend on our actual operating performance, stock price fluctuations and the named executive officer’s continued service to us. |
• | the acquisition by any person or entity or related group of persons or entities (other than us, our subsidiaries, an employee benefit plan maintained by us or any of our subsidiaries or a person or entity that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, us) of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of more than 50% of the total combined voting power of our securities outstanding immediately after such acquisition; |
• | during any two-year period, individuals who, at the beginning of such period, constitute our board of directors together with any new director(s) whose election by our board of directors or nomination for election by our stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of our board of directors; or (1) a merger, consolidation, reorganization, or business combination or (2) the sale, exchange or transfer of all or substantially all of our assets in any single transaction or series of transactions or (3) the acquisition of assets or stock of another entity, in each case other than a transaction: |
• | which results in our voting securities outstanding immediately before the transaction continuing to represent, directly or indirectly, at least a majority of the combined voting power of the successor entity’s outstanding voting securities immediately after the transaction, and |
• | after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of us or our successor; provided, however, that no person or group is treated as beneficially owning 50% or more of combined voting power of us or our successor solely as a result of the voting power held in us prior to the consummation of the transaction. |
Option Awards |
Stock Awards |
|||||||||||||||||||||||||||||||||||
Name |
Grant Date |
Number of Securities Underlying Unexercised Options Exercisable (#) |
Number of Securities Underlying Unexercised Options Unexercisable (#)(1)(2) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#)(1)(3) |
Market Value of Shares or Units of Stock That Have Not Vested ($)(4) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(5) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(4) |
|||||||||||||||||||||||||||
Stephen J. Farr, Ph.D. |
3/26/2021 | 17,500 | 75,835 | 18.76 | 3/26/2031 | — | — | — | — | |||||||||||||||||||||||||||
3/26/2021 | — | — | — | — | 46,665 | 758,306 | — | — | ||||||||||||||||||||||||||||
3/26/2021 | — | — | — | — | — | — | 46,665 | 758,306 | ||||||||||||||||||||||||||||
3/4/2020 | (6) |
72,188 | 92,812 | 27.36 | 3/4/2030 | — | — | — | — | |||||||||||||||||||||||||||
3/4/2020 | — | — | — | — | 20,625 | 335,156 | — | — | ||||||||||||||||||||||||||||
3/22/2019 | 110,000 | 50,000 | 52.66 | 3/22/2029 | — | — | — | — | ||||||||||||||||||||||||||||
3/22/2019 | — | — | — | — | 10,000 | 162,500 | — | — | ||||||||||||||||||||||||||||
3/15/2018 | 150,000 | 10,000 | 42.65 | 3/15/2028 | — | — | — | — | ||||||||||||||||||||||||||||
3/15/2018 | — | — | — | — | 5,000 | 81,250 | — | — | ||||||||||||||||||||||||||||
3/14/2017 | 85,937 | — | 10.20 | 3/14/2027 | — | — | — | — | ||||||||||||||||||||||||||||
3/14/2016 | 90,767 | — | 10.35 | 3/14/2026 | — | — | — | — | ||||||||||||||||||||||||||||
5/13/2015 | 93,750 | — | 11.04 | 5/13/2025 | — | — | — | — | ||||||||||||||||||||||||||||
3/17/2015 | 26,583 | — | 10.64 | 3/17/2025 | — | — | — | — | ||||||||||||||||||||||||||||
3/25/2014 | 43,749 | — | 24.56 | 3/25/2024 | — | — | — | — | ||||||||||||||||||||||||||||
3/15/2013 | 69,373 | — | 15.92 | 3/15/2023 | — | — | — | — | ||||||||||||||||||||||||||||
4/27/2012 | 87,499 | — | 15.04 | 4/27/2022 | — | — | — | — | ||||||||||||||||||||||||||||
Michael P. Smith |
3/26/2021 | 4,688 | 20,312 | 18.76 | 3/26/2031 | — | — | — | — | |||||||||||||||||||||||||||
3/26/2021 | — | — | — | — | 12,500 | 203,125 | — | — | ||||||||||||||||||||||||||||
3/26/2021 | — | — | — | — | — | — | 12,500 | 203,125 | ||||||||||||||||||||||||||||
3/4/2020 | (6) |
17,063 | 21,937 | 27.36 | 3/4/2030 | — | — | — | — | |||||||||||||||||||||||||||
3/4/2020 | — | — | — | — | 4,875 | 79,219 | — | — | ||||||||||||||||||||||||||||
3/22/2019 | 43,828 | 19,922 | 52.66 | 3/22/2029 | — | — | — | — | ||||||||||||||||||||||||||||
3/22/2019 | — | — | — | — | 4,062 | 66,008 | — | — | ||||||||||||||||||||||||||||
3/15/2018 | 35,156 | 2,344 | 42.65 | 3/15/2028 | — | — | — | — | ||||||||||||||||||||||||||||
3/15/2018 | — | — | — | — | 1,562 | 25,383 | — | — | ||||||||||||||||||||||||||||
1/16/2017 | (7) |
67,500 | — | 10.35 | 1/16/2027 | — | — | — | — | |||||||||||||||||||||||||||
Shawnte M. Mitchell |
3/26/2021 | 4,688 | 20,312 | 18.76 | 3/26/2031 | — | — | — | — | |||||||||||||||||||||||||||
3/26/2021 | — | — | — | — | 12,500 | 203,125 | — | — | ||||||||||||||||||||||||||||
3/26/2021 | — | — | — | — | — | — | 12,500 | 203,125 | ||||||||||||||||||||||||||||
4/20/2020 | (7) |
45,833 | 64,167 | 26.68 | 4/19/2030 | — | — | — | — | |||||||||||||||||||||||||||
Bradley S. Galer, M.D. |
8/9/2021 | — | — | — | — | 5,000 | 81,250 | — | — | |||||||||||||||||||||||||||
3/26/2021 | 5,625 | 24,375 | 18.76 | 3/26/2031 | — | — | — | — | ||||||||||||||||||||||||||||
3/26/2021 | — | — | — | — | 15,000 | 243,750 | — | — | ||||||||||||||||||||||||||||
3/26/2021 | — | — | — | — | — | — | 15,000 | 243,750 | ||||||||||||||||||||||||||||
3/4/2020 | (6) |
17,063 | 21,937 | 27.36 | 3/4/2030 | — | — | — | — | |||||||||||||||||||||||||||
3/4/2020 | — | — | — | — | 4,875 | 79,219 | — | — | ||||||||||||||||||||||||||||
3/22/2019 | 43,828 | 19,922 | 52.66 | 3/22/2029 | — | — | — | — | ||||||||||||||||||||||||||||
3/22/2019 | — | — | — | — | 4,062 | 66,008 | — | — | ||||||||||||||||||||||||||||
3/15/2018 | 35,156 | 2,344 | 42.65 | 3/15/2028 | — | — | — | — | ||||||||||||||||||||||||||||
3/15/2018 | — | — | — | — | 1,562 | 25,383 | — | — | ||||||||||||||||||||||||||||
3/14/2017 | 60,000 | — | 10.20 | 3/14/2027 | — | — | — | — | ||||||||||||||||||||||||||||
3/14/2016 | 60,000 | — | 10.35 | 3/14/2026 | — | — | — | — | ||||||||||||||||||||||||||||
10/05/2015 | 28,500 | — | 13.32 | 10/5/2025 | — | — | — | — | ||||||||||||||||||||||||||||
3/17/2015 | 28,125 | — | 10.64 | 3/17/2025 | — | — | — | — | ||||||||||||||||||||||||||||
6/02/2014 | 8,125 | — | 16.64 | 6/2/2024 | — | — | — | — | ||||||||||||||||||||||||||||
12/17/2013 | 53,125 | — | 24.16 | 12/17/2023 | — | — | — | — |
Ashish M. Sagrolikar |
8/9/2021 | 1,667 | 18,333 | 14.86 | 8/9/2031 | — | — | — | — | |||||||||||||||||||||||||||
8/9/2021 | — | — | — | — | 10,000 | 162,500 | — | — | ||||||||||||||||||||||||||||
3/26/2021 | 9,375 | 40,625 | 18.76 | 3/26/2031 | — | — | — | — | ||||||||||||||||||||||||||||
3/26/2021 | — | — | — | — | 25,000 | 406,250 | — | — | ||||||||||||||||||||||||||||
3/26/2021 | — | — | — | — | — | — | 25,000 | 406,250 | ||||||||||||||||||||||||||||
3/4/2020 | (6) |
26,250 | 33,750 | 27.36 | 3/4/2030 | — | — | — | — | |||||||||||||||||||||||||||
3/4/2020 | — | — | — | — | 7,500 | 121,875 | — | — | ||||||||||||||||||||||||||||
3/22/2019 | 43,828 | 19,922 | 52.66 | 3/22/2029 | — | — | — | — | ||||||||||||||||||||||||||||
3/22/2019 | — | — | — | — | 4,062 | 66,008 | — | — | ||||||||||||||||||||||||||||
7/2/2018 | (7) |
85,417 | 14,583 | 43.70 | 7/2/2028 | — | — | — | — | |||||||||||||||||||||||||||
7/2/2018 | (8) |
— | — | — | — | 3,750 | 60,938 | — | — | |||||||||||||||||||||||||||
Gail M. Farfel, Ph.D. |
3/26/2021 | 5,625 | 24,375 | 18.76 | 3/26/2031 | — | — | — | — | |||||||||||||||||||||||||||
3/26/2021 | — | — | — | — | 15,000 | 243,750 | — | — | ||||||||||||||||||||||||||||
3/26/2021 | — | — | — | — | — | — | 15,000 | 243,750 | ||||||||||||||||||||||||||||
3/4/2020 | (6) |
15,313 | 19,687 | 27.36 | 3/4/2030 | — | — | — | — | |||||||||||||||||||||||||||
3/4/2020 | — | — | — | — | 4,500 | 73,125 | — | — | ||||||||||||||||||||||||||||
3/22/2019 | 43,828 | 19,922 | 52.66 | 3/22/2029 | — | — | — | — | ||||||||||||||||||||||||||||
3/22/2019 | — | — | — | — | 4,062 | 66,008 | — | — | ||||||||||||||||||||||||||||
3/15/2018 | 37,500 | 2,500 | 42.65 | 3/15/2028 | — | — | — | — | ||||||||||||||||||||||||||||
3/15/2018 | — | — | — | — | 1,625 | 26,406 | — | — | ||||||||||||||||||||||||||||
3/14/2017 | 52,500 | — | 10.20 | 3/14/2027 | — | — | — | — | ||||||||||||||||||||||||||||
3/14/2016 | 45,000 | — | 10.35 | 3/14/2026 | — | — | — | — | ||||||||||||||||||||||||||||
10/05/2015 | 14,250 | — | 13.32 | 10/5/2025 | — | — | — | — | ||||||||||||||||||||||||||||
7/01/2015 | 30,289 | — | 13.96 | 7/1/2025 | — | — | — | — |
(1) | Vesting of each stock option and stock award is contingent upon the named executive officer’s continued service, except as may be accelerated on certain events described above under “—Employment Agreements” and under “—Potential Payments Upon Termination or Change in Control” described below. |
(2) | Except as described below in footnotes 6 and 7, all option awards have a term of ten years from the date of grant and vest in successive equal monthly installments over a four-year period of continuous service following the grant date. |
(3) | Except as described below in footnote 8, the RSUs vest in a series of four successive equal annual installments on each March 15 of the first four calendar years following the calendar year in which the grant date occurs. |
(4) | Market value is calculated based on the closing price of our common stock of $16.25 per share on December 31, 2021 times the number of shares subject to the stock award. |
(5) | The PSUs vest upon the attainment of pre-determined performance objectives related to regulatory and commercial objectives: 35% of the PSUs will vest upon the achievement of trailing annual sales of $100 million prior to March 1, 2025, 30% of the PSUs will vest upon the achievement of trailing annual sales of $150 million prior to March 1, 2025, and 35% of the PSUs will vest upon sNDA approval for LGS prior to March 1, 2025, in each case subject to the named executive officer’s continued employment through the applicable vesting date. |
(6) | The option award vests in a series of forty-eight (48) successive, equal monthly installments with the first tranche vesting on April 15, 2020. |
(7) | 25% of the shares underlying the options vest on the first anniversary of the grant date and the remaining 75% vest in successive equal monthly installments over the following 36 months of continuous service. |
(8) | The RSUs vest over a four-year period at the rate of 25% of the stock award on each of the first four anniversaries of the grant date. |
Stock Awards |
||||||||
Name |
Number of Shares Acquired on Vesting (#) |
Value Realized on Vesting ($)(1) |
||||||
Stephen J. Farr, Ph.D. |
16,875 | 349,313 | ||||||
Michael P. Smith |
5,218 | 108,013 | ||||||
Shawnte M. Mitchell |
— | — | ||||||
Bradley S. Galer, M.D. |
5,218 | 108,013 | ||||||
Ashish M. Sagrolikar |
7,744 | 160,317 | ||||||
Gail M. Farfel, Ph.D. |
5,218 | 106,729 |
(1) | The value realized is based on the closing price of our common stock on the vesting date as reported on the Nasdaq Stock Market multiplied by the number of RSUs vested. |
Triggering Event |
Lump Sum Cash Severance ($)(1) |
Accelerated Options ($)(2) |
Accelerated RSUs ($)(3) |
Accelerated PSUs ($)(3) |
Health Benefits ($)(4) |
Total ($) |
||||||||||||||||||
Stephen J. Farr, Ph.D. |
||||||||||||||||||||||||
Involuntary Termination Without Cause/Resignation for Good Reason Apart from a CIC |
677,100 | — | 463,795 | — | 26,571 | 1,167,466 | ||||||||||||||||||
Death/Disability |
677,100 | — | 463,795 | — | 26,571 | 1,167,466 | ||||||||||||||||||
Involuntary Termination Without Cause/Resignation for Good Reason in Connection with a CIC |
1,042,682 | — | 1,337,213 | — | 26,571 | 2,406,466 | ||||||||||||||||||
CIC Only (Continued Employment) |
— | — | 668,607 | 758,306 | — | 1,426,913 | ||||||||||||||||||
Michael P. Smith |
||||||||||||||||||||||||
Involuntary Termination Without Cause/Resignation for Good Reason Apart from a CIC |
473,600 | — | 135,586 | — | 27,150 | 636,336 | ||||||||||||||||||
Death/Disability |
473,600 | — | 135,586 | — | 27,150 | 636,336 | ||||||||||||||||||
Involuntary Termination Without Cause/Resignation for Good Reason in Connection with a CIC |
658,116 | — | 373,734 | — | 27,150 | 1,059,000 | ||||||||||||||||||
CIC Only (Continued Employment) |
— | — | 186,867 | 203,125 | — | 389,992 | ||||||||||||||||||
Shawnte M. Mitchell |
||||||||||||||||||||||||
Involuntary Termination Without Cause/Resignation for Good Reason Apart from a CIC |
463,000 | — | 50,781 | — | 34,175 | 547,956 | ||||||||||||||||||
Death/Disability |
463,000 | — | 50,781 | — | 34,175 | 547,956 | ||||||||||||||||||
Involuntary Termination Without Cause/Resignation for Good Reason in Connection with a CIC |
592,291 | — | 203,125 | — | 34,175 | 829,591 | ||||||||||||||||||
CIC Only (Continued Employment) |
— | — | 101,563 | 203,125 | — | 304,688 |
Bradley S. Galer, M.D. |
||||||||||||||||||||||||
Involuntary Termination Without Cause/Resignation for Good Reason Apart from a CIC |
489,100 | — | 166,055 | — | 34,660 | 689,815 | ||||||||||||||||||
Death/Disability |
489,100 | — | 166,055 | — | 34,660 | 689,815 | ||||||||||||||||||
Involuntary Termination Without Cause/Resignation for Good Reason in Connection with a CIC |
678,315 | — | 495,609 | — | 34,660 | 1,208,584 | ||||||||||||||||||
CIC Only (Continued Employment) |
— | — | 247,804 | 243,750 | — | 491,554 | ||||||||||||||||||
Ashish M. Sagrolikar |
||||||||||||||||||||||||
Involuntary Termination Without Cause/Resignation for Good Reason Apart from a CIC |
512,100 | 25,483 | 276,758 | — | 29,563 | 843,904 | ||||||||||||||||||
Death/Disability |
512,100 | 25,483 | 276,758 | — | 29,563 | 843,904 | ||||||||||||||||||
Involuntary Termination Without Cause/Resignation for Good Reason in Connection with a CIC |
704,743 | 25,483 | 817,570 | — | 29,563 | 1,577,359 | ||||||||||||||||||
CIC Only (Continued Employment) |
— | 12,741 | 408,785 | 406,250 | — | 827,776 | ||||||||||||||||||
Gail M. Farfel, Ph.D. |
||||||||||||||||||||||||
Involuntary Termination Without Cause/Resignation for Good Reason Apart from a CIC |
482,800 | — | 144,727 | — | 34,363 | 661,890 | ||||||||||||||||||
Death/Disability |
482,800 | — | 144,727 | — | 34,363 | 661,890 | ||||||||||||||||||
Involuntary Termination Without Cause/Resignation for Good Reason in Connection with a CIC |
665,850 | — | 409,289 | — | 34,363 | 1,109,502 | ||||||||||||||||||
CIC Only (Continued Employment) |
— | — | 204,644 | 243,750 | — | 448,394 |
(1) | Lump sum cash severance amount represents 12 months of base salary for each named executive officer (except in the event of an involuntary termination without cause or resignation for good reason within 60 days prior to, or 12 months following a change in control, in which case each named executive officer is entitled to receive 12 months of base salary (18 months in the case of Dr. Farr) plus the average of his or her bonus awarded for fiscal 2021, 2020 and 2019 (or such lesser number of years he or she has been employed by us)). The definition of “bonus” is described above under the heading “Employment Agreements.” |
(2) | The value attributable to the accelerated options represents the excess of the fair market value of our common stock of $16.25 on December 31, 2021 over the exercise price of the unvested options the vesting of which accelerates in connection with the specified event. In the event of an involuntary termination without cause or resignation for good reason apart from a CIC and death/disability, shares subject to acceleration represent the vesting and exercisability of outstanding unvested option awards as to the number of option awards that would have vested over the 12-month period following termination had such officer remained continuously employed by us during such period. In the event of a change in control, shares subject to acceleration represent the vesting and exercisability of 50% of all outstanding unvested option awards and, in the event an executive officer is terminated without cause or resigns for good reason within three months prior to (as opposed to 60 days prior to for cash severance) or 12 months following a change in control, shares subject to acceleration represent the vesting and exercisability of 100% of all outstanding unvested option awards. |
(3) | Represents the aggregate value of the accelerated vesting of RSU awards and PSU awards, calculated by multiplying the fair market value of our common stock of $16.25 on December 31, 2021 by the number of RSUs and PSUs the vesting of which accelerates in connection with the applicable triggering event. In the event of an involuntary termination without cause or resignation for good reason apart from a CIC and death/disability, shares subject to acceleration represent the vesting and exercisability of outstanding unvested RSUs as to the number of RSUs that would have vested over the 12- month period following termination had such officer remained continuously employed by us during such period. In the event of a change in control, shares subject to acceleration represent the vesting and exercisability of 50% of all outstanding unvested RSU awards and 100% of all outstanding unvested PSU awards and, in the event an executive officer is terminated without cause or resigns for good reason within 12 months following a change in control, shares subject to acceleration represent the vesting and exercisability of 100% of all outstanding unvested RSUs. |
(4) | Represents the value of the continuation of health benefits for a period of 12 months following the date of the named executive officer’s termination. |
• | for employees who were hired in 2020, but did not work for us for the entire fiscal year, we annualized their compensation as if they had been employed by us for all of 2020; |
• | no cost of living adjustment was applied; |
• | for an employee paid in a currency other than U.S. dollars, their compensation was converted into U.S. dollars, using exchange rates as of December 31, 2020; and |
• | three employees located in Japan were excluded from our employee population, as permitted under SEC rules, because they represented less than 5% of our employee population. |
• | our Chief Executive Officer’s annual total compensation, as reported in the Summary Compensation Table included elsewhere in this Proxy Statement, was $3,966,258; and |
• | our median employee’s annual total compensation was $302,719. |
Service |
Annual Retainer |
|||
Board Service |
$ | 45,000 | (1) | |
Non-employee director |
$ | 40,000 | ||
Additional retainer - chairperson |
$ | 60,000 | ||
Audit Committee Service |
||||
Chair |
$ | 25,000 | ||
Member |
$ | 10,000 | ||
Compensation Committee Service |
||||
Chair |
$ | 15,000 | ||
Member |
$ | 7,500 | ||
Nominating/Corporate Governance Committee Service |
||||
Chair |
$ | 10,000 | ||
Member |
$ | 5,000 |
(1) | The annual retainer for our non-employee directors was increased from $40,000 to $45,000 effective May 27, 2021. |
Number of shares |
Vesting Schedule |
|||||||
Initial option grant |
30,000 | 36 monthly installments | ||||||
Annual option grant |
22,000 | 12 monthly installments |
Name |
Fees Earned or Paid in Cash ($) |
Option Awards ($) (1) |
Total ($) |
|||||||||
Louis C. Bock |
100,000 | 236,239 | 336,269 | |||||||||
James B. Breitmeyer, M.D., Ph.D. |
70,000 | 236,239 | 306,269 | |||||||||
Cam L. Garner |
65,000 | 236,239 | 301,269 | |||||||||
Caroline M. Loewy |
60,000 | 236,239 | 296,269 | |||||||||
Erle T. Mast |
52,500 | 236,239 | 288,769 | |||||||||
Mary E. Stutts |
47,500 | 236,239 | 283,769 | |||||||||
Renee P. Tannenbaum, Pharm.D. |
40,000 | 236,239 | 276,269 | |||||||||
Denelle J. Waynick |
40,000 | 236,239 | 276,269 | |||||||||
Mark Wiggins |
40,000 | 236,239 | 276,269 |
(1) | The amounts in this column represent the grant-date fair value of option awards made to each board member during 2021. The applicable grant-date fair value of each option award was calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation non-employee director realizes a financial benefit from the awards will depend on our actual operating performance, stock price fluctuations and the non-employee director’s continued service on our board. |
Name |
Number of Securities Underlying Options Outstanding |
|||
Louis C. Bock |
112,000 | |||
James B. Breitmeyer, M.D., Ph.D. |
117,625 | |||
Cam L. Garner |
103,000 | |||
Caroline M. Loewy |
42,000 | |||
Erle T. Mast |
134,500 | |||
Mary E. Stutts |
42,000 | |||
Renee P. Tannenbaum, Pharm.D. |
66,000 | |||
Denelle J. Waynick |
42,000 | |||
Mark Wiggins |
128,250 |
(A) Number of Securities To Be Issued Upon Exercise Outstanding Options, Warrants and Rights(2) |
(B) Weighted- Average Exercise Price of Outstanding Options, Warrants and Right(3) |
(C) Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (A)) |
||||||||||
Equity compensation plans approved by security holders: |
||||||||||||
Equity compensation plans approved by security holders (1)(4) |
6,921,248 | $ | 25.89 | 6,309,435 | ||||||||
Equity compensation plans not approved by security holders (1) |
868,735 | $ | 28.60 | — | ||||||||
|
|
|
|
|||||||||
Total Equity Incentive Plans(1) |
7,789,983 | 6,914,025 |
(1) | The material features of our equity incentive plans are more fully described in Note 14 to our consolidated financial statements included in this Annual Report. |
(2) | Includes shares subject to outstanding options and RSUs granted under our equity compensation plans. |
(3) | The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding stock options and does not reflect the shares that will be issued upon the vesting of outstanding awards of RSUs, which have no exercise price. |
(4) | Represents 385,515 shares available for issuance under the Employee Stock Purchase Plan as of December 31, 2021 (all of which were eligible to be purchased during the offering period in effect on such date), and 6,528,510 available for future issuance under our Restated 2010 Equity Incentive Award Plan. |
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
• | each person, or group of affiliated persons, known to us to be the beneficial owner of more than 5% of our common stock; |
• | each of our named executive officers; |
• | each of our directors; and |
• | all of our executive officers and directors as a group. |
Shares Beneficially Owned |
||||||||
Beneficial Owner |
Number |
Percentage |
||||||
Blackrock, Inc. (1) 55 East 52nd Street New York, NY 10055 |
5,734,099 | 10.2 | % | |||||
Cadian Capital Management, LP and affiliates (2) 535 Madison Avenue 36 th FloorNew York, NY 10022 |
4,240,846 | 7.5 | % | |||||
The Vanguard Group (3) 100 Vanguard Blvd. Malvern, PA 19355 |
3,958,779 | 7.0 | % | |||||
Morgan Stanley (4) 1585 Broadway New York, NY 10036 |
3,696,860 | 6.6 | % | |||||
RA Capital Management, L.P. and affiliates (5) 200 Berkeley Street 18 th FloorBoston, MA 02116 |
3,333,700 | 5.9 | % | |||||
Franklin Resources, Inc.(6) One Franklin Parkway San Mateo, CA 94403 |
3,210,788 | 5.8 | % | |||||
Stephen J. Farr, Ph.D. (7) |
1,012,771 | 1.8 | % | |||||
Michael P. Smith (8) |
197,364 | * | ||||||
Bradley S. Galer, M.D. (9) |
384,886 | * | ||||||
Shawnte M. Mitchell (10) |
65,392 | * | ||||||
Ashish M. Sagrolikar (11) |
218,123 | * | ||||||
Gail M. Farfel, Ph.D. (12) |
282,487 | * | ||||||
Louis C. Bock (13) |
110,167 | * | ||||||
James B. Breitmeyer, M.D., Ph.D. (14) |
117,042 | * | ||||||
Cam L. Garner (15) |
183,010 | * | ||||||
Caroline M. Loewy (16) |
30,723 | * | ||||||
Erle T. Mast (17) |
119,444 | * | ||||||
Mary E. Stutts (18) |
30,723 | * | ||||||
Renee P. Tannenbaum, Pharm.D., MBA (19) |
96,734 | * | ||||||
Denelle J. Waynick (20) |
31,307 | * | ||||||
Mark Wiggins (21) |
128,917 | * | ||||||
All current directors and executive officers as a group (15 persons) (22) |
3,009,090 | 5.1 | % |
1. | Based on information contained in Schedule 13G/A filed with the SEC on January 27, 2022 by Blackrock, Inc. The Schedule 13G, as amended, states that Blackrock, Inc. has sole voting power over 5,402,285 shares and sole dispositive power over all the reported shares. |
2. | Based on information contained in Schedule 13G/A filed with the SEC on February 14, 2022 by Cadian Capital Management, LP, Cadian Capital Management GP, LLC and Eric Bannasch (collectively, the “Cadian Advisors”). The Schedule 13G/A states that Cadian Advisors has shared voting and dispositive power over all the reported shares of common stock held by Cadian Master Fund L.P., for which Cadian Capital Management, LP serves as investment adviser. Cadian Capital Management GP, LLC is the general partner of the Cadian Capital Management, LP. Eric Bannasch is the sole managing member of Cadian Capital Management GP, LLC. |
3. | Based on information contained in Schedule 13G/A filed with the SEC on February 10, 2022 by The Vanguard Group. The Schedule 13G/A states that The Vanguard Group has shared voting power over 42,871 shares of our common stock, sole dispositive power over 3,872,922 shares of our common stock, and shared dispositive power over 85,857 shares of our common stock. |
4. | Based on information contained in Schedule 13G/A filed with the SEC on February 11, 2022 by Morgan Stanley. The Schedule 13G/A states that Morgan Stanley has shared voting power over 3,650,913 shares of our common stock, and shared dispositive power over all the reported shares. |
5. | Based on information contained in Schedule 13G/A filed with the SEC on February 14, 2022 by, RA Capital Management, L.P. (“RAC Management”), Peter Kolchinsky, Rajeev Shah and RA Capital Healthcare Fund, L.P. The Schedule 13G, as amended, states that RAC Management, Peter Kolchinsky and Rajeev Shah have shared voting and dispositive power over all such shares of common stock held by RA Capital Healthcare Fund, L.P. (the “RAC Fund”) for which RAC Management acts as the general partner. The RAC Fund has delegated to RAC Management the sole power to vote and the sole power to dispose of all securities held in the Fund’s portfolio, including all of the reported shares. Dr. Kolchinsky and Mr. Shah are the controlling persons of RA Capital Management GP, LLC, the general partner of RAC Management. |
6. | Based on information contained in a Schedule 13G filed on February 3, 2022, by Franklin Resources, Inc. (“FRI”), Charles B. Johnson, Rupert H. Johnson, Jr. and Franklin Advisers, Inc. The Schedule 13G states that these securities are beneficially owned by one or more open- or closed-end investment companies or other managed accounts that are investment management clients of investment managers that are direct and indirect subsidiaries of FRI. Charles B. Johnson and Rupert H. Johnson, Jr. each own in excess of 10% of the outstanding common stock of FRI and are the principal stockholders of FRI. Franklin Advisers, Inc., one of the subsidiaries of FRI, has sole voting power and sole dispositive power with respect to 3,209,857 shares and Fiduciary Trust International LLC, one of the subsidiaries of FRI, has sole voting and dispositive power with respect to 931 shares. |
7. | Includes 892,207 shares issuable pursuant to stock options exercisable within 60 days of February 28, 2022, 28,542 shares of common stock issuable upon the vesting of RSUs within 60 days of February 28, 2022 and 92,022 shares held directly by Dr. Farr. |
8. | Includes 181,225 shares issuable pursuant to stock options exercisable within 60 days of February 28, 2022, 8,343 shares of common stock issuable upon the vesting of RSUs within 60 days of February 28, 2022 and 7,796 shares held directly by Mr. Smith. |
9. | Includes 352,954 shares issuable pursuant to stock options exercisable within 60 days of February 28, 2022, 8,968 shares of common stock issuable upon the vesting of RSUs within 60 days of February 28, 2022 and 22,964 shares held directly by Dr. Galer. |
10. | Includes 61,771 shares issuable pursuant to stock options exercisable within 60 days of February 28, 2022, 3,125 shares of common stock issuable upon the vesting of RSUs within 60 days of February 28, 2022 and 496 shares held directly by Ms. Mitchell. |
11. | Includes 191,016 shares issuable pursuant to stock options exercisable within 60 days of February 28, 2022, 10,781 shares of common stock issuable upon the vesting of RSUs within 60 days of February 28, 2022 and 16,326 shares held directly by Mr. Sagrolikar. |
12. | Includes 257,534 shares issuable pursuant to stock options exercisable within 60 days of February 28, 2022, 8,906 shares of common stock issuable upon the vesting of RSUs within 60 days of February 28, 2022 and 16,047 shares held directly by Dr. Farfel. |
13. | Consists solely of 110,167 shares issuable pursuant to stock options exercisable within 60 days of February 28, 2022. |
14. | Includes 115,792 shares issuable pursuant to stock options exercisable within 60 days of February 28, 2022 and 1,250 shares held directly by Dr. Breitmeyer. |
15. | Includes 101,167 shares issuable pursuant to stock options exercisable within 60 days of February 28, 2022, 40,843 shares held by Garner Investments, LLC, an entity Mr. Garner serves as managing member, and 41,000 shares held by Garner Family Trust for which Mr. Garner serves as trustee. |
16. | Consists solely of 30,723 shares issuable pursuant to stock options exercisable within 60 days of February 28, 2022. |
17. | Includes 116,417 shares issuable pursuant to stock options exercisable within 60 days of February 28, 2022 and 3,027 shares held directly by Mr. Mast. |
18. | Consists solely of 30,723 shares issuable pursuant to stock options exercisable within 60 days of February 28, 2022. |
19. | Includes 64,167 shares issuable pursuant to stock options exercisable within 60 days of February 28, 2022 and 32,567 shares held directly by Dr. Tannenbaum. |
20. | Consists solely of 30,723 shares issuable pursuant to stock options exercisable within 60 days of February 28, 2022 and 584 shares held directly by Ms. Waynick. |
21. | Includes 126,417 shares issuable pursuant to stock options exercisable within 60 days of February 28, 2022 and 2,500 shares held directly by Mr. Wiggins. |
22. | Includes 2,663,003 shares issuable pursuant to stock options exercisable within 60 days of February 28, 2022, 68,665 shares of common stock issuable upon the vesting of RSUs within 60 days of February 28, 2022 and 277,422 shares beneficially owned by current directors and executive officers. |
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
• | the amounts involved exceeded or will exceed $120,000; and |
• | a director, executive officer, holder of more than 5% of our common stock or any member of their immediate family had or will have a direct or indirect material interest. |
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
(in thousands) |
||||||||
Audit Fees (1) |
$ | 2,320 | $ | 2,300 | ||||
Audit Related Fees (2) |
— | — | ||||||
Tax Fees (3) |
— | — | ||||||
All Other Fees (4) |
1 | 2 | ||||||
|
|
|
|
|||||
Total |
$ | 2,321 | $ | 2,302 | ||||
|
|
|
|
(1) | Audit Fees consist of fees billed for professional services performed by Ernst & Young LLP for the audit of our annual financial statements, review of our quarterly reports on Form 10-Q, services in connection with securities offerings and related services that are normally provided in connection with statutory and regulatory filings or engagements. |
(2) | Audit Related Fees consist of fees billed by Ernst & Young LLP for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements. There were no such fees incurred during 2021 or 2020. |
(3) | Tax Fees consist of fees for professional services, including tax consulting and compliance performed by Ernst & Young LLP. There were no such fees incurred during 2021 or 2020. |
(4) | All Other Fees consist of fees billed in the indicated year for an annual subscription to Ernst & Young LLP’s online resource library. |
ITEM 15. |
EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
Incorporated by Reference |
||||||||||||||||
Exhibit No. |
Description |
Form |
File Number |
Date of Filing |
Exhibit No. |
Filed Herewith |
||||||||||
32.1‡ | Certification of Chief Executive Officer pursuant to Section 906 of the Public Company Accounting Reform and Investor Protection Act of 2002 (18 U.S.C. §1350, as adopted) | X | ||||||||||||||
32.2‡ | Certification of Chief Financial Officer pursuant to Section 906 of the Public Company Accounting Reform and Investor Protection Act of 2002 (18 U.S.C. §1350, as adopted) | X | ||||||||||||||
104 | Inline XBRL for the cover page of this Annual Report on Form 10-K, included in the Exhibit 101 Inline XBRL Document Set. |
† | Confidential treatment has been granted or requested, as applicable, for portions of this exhibit. These portions have been omitted from the Registration Statement and filed separately with the Securities and Exchange Commission |
* | Confidential portions of this Exhibit were redacted pursuant to Item 601(b)(2) of Regulation S-K and Zogenix Inc. agrees to furnish supplementally to the Securities and Exchange Commission a copy of any redacted information or omitted schedule and/or exhibit upon request. |
+ | Confidential portions of this Exhibit were redacted pursuant to Item 601(b)(10) of Regulation S-K and Zogenix Inc. agrees to furnish supplementally to the Securities and Exchange Commission a copy of any redacted information or omitted schedule and/or exhibit upon request. |
# | Indicates management contract or compensatory plan. |
‡ | Furnished herewith. |
ZOGENIX INC. | ||||||
March 7, 2022 | By: | /s/ STEPHEN J. FARR, PH.D. | ||||
Stephen J. Farr, Ph.D. | ||||||
President and Chief Executive Officer | ||||||
March 7, 2022 | By: | /s/ MICHAEL P. SMITH | ||||
Michael P. Smith | ||||||
Executive Vice President, Chief Financial Officer and Treasurer |
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Stephen J. Farr, certify that:
1. | I have reviewed this annual report on Form 10-K/A of Zogenix, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: March 7, 2022
By: | /s/ Stephen J. Farr | |
Stephen J. Farr | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Michael P. Smith, certify that:
1 | I have reviewed this annual report on Form 10-K/A of Zogenix, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: March 7, 2022
By: | /s/ Michael P. Smith | |
Michael P. Smith | ||
Executive Vice President, Chief Financial Officer and Treasurer | ||
(Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K/A of Zogenix, Inc. (the Company) for the period ended December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Stephen J. Farr, as Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: March 7, 2022
By: | /s/ Stephen J. Farr | |
Stephen J. Farr | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) |
The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K/A of Zogenix, Inc. (the Company) for the period ended December 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Michael P. Smith, as Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: March 7, 2022
By: | /s/ Michael P. Smith | |
Michael P. Smith | ||
Executive Vice President, Chief Financial Officer and Treasurer | ||
(Principal Financial Officer) |
The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Cover - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Feb. 28, 2022 |
Jun. 30, 2021 |
|
Cover [Abstract] | |||
Document Type | 10-K/A | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-34962 | ||
Entity Registrant Name | ZOGENIX, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 20-5300780 | ||
Entity Address, Address Line One | 5959 Horton Street | ||
Entity Address, Address Line Two | Suite 500 | ||
Entity Address, City or Town | Emeryville | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94608 | ||
City Area Code | 510 | ||
Local Phone Number | 550-8300 | ||
Title of 12(b) Security | Common Stock, $0.001 par value per share | ||
Trading Symbol | ZGNX | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 863.0 | ||
Entity Common Stock, Shares Outstanding | 56,228,303 | ||
Documents Incorporated by Reference | None. | ||
Entity Central Index Key | 0001375151 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | true | ||
Amendment Description | Zogenix, Inc., referred to in this report as “Zogenix,” “the Company,” “we,” “us,” and “our,” is filing this Amendment No. 1 on Form 10-K/A (the “Amendment”) to its Annual Report on Form 10-K for the year ended December 31, 2021, originally filed on March 1, 2022 (the “Original Report”), for the sole purpose of including the information required by Part III of Form 10-K. This information was previously omitted from the Original Report in reliance on General Instruction G(3) to Form 10-K, which permits the information in the below referenced items to be incorporated in the Form 10-K by reference from our definitive proxy statement if such statement is filed no later than 120 days after our fiscal year end. We are filing this Amendment to provide information required in Part III of Form 10-K for the fiscal year ended December 31, 2021, because a definitive proxy statement containing such information will not be filed by the Company within 120 days after the end of the fiscal year covered by the Form 10-K. In accordance with Rule 12b-15 under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), Part III, Items 10 through 14 of the Original Report are hereby amended and restated in their entirety, and Part IV, Item 15 of the Original Report is hereby amended and restated only with respect to the addition of the new certifications by our principal executive officer and principal financial officer filed herewith. This Amendment does not reflect events occurring after the filing of the Original Report, does not modify or update in any way the disclosures contained in the Original Report, and does not modify or update those disclosures that may be affected by subsequent events. Accordingly, this Amendment should be read in conjunction with the Original Report and with our filings with the Securities and Exchange Commission (“SEC”) subsequent to the Original Report. As previously disclosed in our Current Report on Form 8-K, filed with the SEC on January 19, 2022, on January 18, 2022, the Company, UCB S.A., a société anonyme formed under the laws of Belgium (“Parent”), and Zinc Merger Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Parent (“Merger Sub”), entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which Parent, through Purchaser, commenced a tender offer (the “Offer”) on February 1, 2022 to acquire all of the outstanding shares of the Company’s common stock, par value $0.001 per share, at a purchase price of (a) $26.00 per Company Share, net to the holder thereof, in cash, without interest thereon plus (b) one contingent value right per Company Share representing the right to receive a contingent payment of $2.00, net to the holder thereof, in cash, without interest thereon, upon the achievement of the milestone. | ||
Auditor Firm ID | 42 | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Location | Redwood City, California |
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