WVE 10-K/A
Wave Life Sciences, Inc. (WVE)
10-K/A
2022-04-28
For: 2021-12-31
View Original
Added on
April 09, 2026
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31 , 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File
No. 001-37627
(Exact name of registrant as specified in its charter)
e | ||
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
#12-00 , |
||
(Address of principal executive offices) |
(Zip code) | |
Registrant’s telephone number, including area code: +65 6236 3388
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading symbol |
Name of each exchange on which registered | ||
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation Yes ☒ No ☐
S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2
of the Exchange Act. | Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
| ☒ | Smaller reporting company | |||||
| Emerging growth company | ||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule ☒
12b-2
of the Exchange Act). Yes ☐ No The aggregate market value of the registrant’s voting and 269,680,028 .
non-voting
ordinary shares held by non-affiliates
of the registrant (without admitting that any person whose shares are not included in such calculation is an affiliate) computed by reference to the price at which the ordinary shares were last sold as of the last business day of the registrant’s most recently completed second fiscal quarter (June 30, 2021) was $The number of outstanding ordinary shares of the registrant as of March 25, 2022 was 60,859,968 .
DOCUMENTS INCORPORATED BY REFERENCE
EXPLANATORY NOTE
10-K/A
(this “Amendment”) amends the Annual Report on Form 10-K
of Wave Life Sciences Ltd. (the “Company,” “we,” “our,” “us” or “Wave”) for the fiscal year ended December 31, 2021, as originally filed with the Securities and Exchange Commission (the “SEC”) on March 3, 2022 (the “Original 10-K”).
The purpose of this Amendment is to include information required by Part III of the Annual Report on Form 10-K
that was intentionally omitted from Part III of the Original 10-K.
In addition, this Amendment amends Item 15 of Part IV of the Original 10-K
to update the exhibit list and to include new certifications by our principal executive officer and principal financial officer under Section 302 of the Sarbanes-Oxley Act of 2002, as required by Rule 12b-15
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).Except as described above, no other changes have been made to the Original
10-K.
The Original 10-K
continues to speak as of the dates described in the Original 10-K,
and we have not updated the disclosures contained therein to reflect any events that occurred subsequent to such dates. Accordingly, this Amendment should be read in conjunction with the Company’s filings made with the SEC subsequent to the filing of the Original 10-K,
as information in such filings may update or supersede certain information contained in this Amendment. As used in this Amendment, unless otherwise stated or the context otherwise indicates, references to “Wave,” the “Company,” “we,” “our,” “us” or similar terms refer to Wave Life Sciences Ltd. and our wholly owned subsidiaries. The Wave Life Sciences Ltd. and Wave Life Sciences Pte. Ltd. names, the Wave Life Sciences mark, PRISM and the other registered and pending trademarks, trade names and service marks of Wave Life Sciences Ltd. appearing in this Amendment are the property of Wave Life Sciences Ltd. This Amendment also contains additional trade names, trademarks and service marks belonging to Wave Life Sciences Ltd. and to other companies. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties. Solely for convenience, the trademarks and trade names in this Amendment are referred to without the
®
and ™
symbols, but such reference should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Amendment contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act, that relate to future events or to our future operations or financial performance. Any forward-looking statement involves known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statement. In some cases, forward-looking statements are identified by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “future,” “goals,” “intend,” “likely,” “may,” “might,” “ongoing,” “objective,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “strategy,” “target,” “will” and “would” or the negative of these terms, or other comparable terminology intended to identify statements about the future, although not all forward-looking statements contain these identifying words. Forward-looking statements include statements, other than statements of historical fact, about, among other things: our ability to fund our future operations; our financial position, revenues, costs, expenses, uses of cash and capital requirements; our need for additional financing or the period for which our existing cash resources will be sufficient to meet our operating requirements; the success, progress, number, scope, cost, duration, timing or results of our research and development activities, preclinical studies and clinical trials, including the timing for initiation or completion of or availability of results from any preclinical studies and clinical trials or for submission, review or approval of any regulatory filing; the timing of, and our ability to, obtain and maintain regulatory approvals for any of our product candidates; the potential benefits that may be derived from any of our product candidates; our strategies, prospects, plans, goals, expectations, forecasts or objectives; the success of our collaborations with third parties; any payment that our collaboration partners may make to us; our ability to identify and develop new product candidates; our intellectual property position; our commercialization, marketing and manufacturing capabilities and strategy; our ability to develop sales and marketing capabilities; our estimates regarding future expenses and needs for additional financing; our ability to identify, recruit and retain key personnel; our financial performance; developments and projections relating to our competitors in the industry; our liquidity and working capital requirements; the expected impact of new accounting standards; and our expectations regarding the impact of
COVID-19,
and variants thereof, on our business, including our research and development activities, preclinical studies and clinical trials, supply of drug product, and our workforce. Although we believe that we have a reasonable basis for each forward-looking statement contained in this report, we caution you that these statements are based on our estimates or projections of the future that are subject to known and unknown risks and uncertainties and other important factors that may cause our actual results, level of activity, performance or achievements expressed or implied by any forward-looking statement to differ. These risks, uncertainties and other factors include, among other things, our critical accounting policies and: the ability of our preclinical studies to produce data sufficient to support the filing of global clinical trial applications and the timing thereof; our ability to continue to build and maintain the company infrastructure and personnel needed to achieve our goals; the clinical results and timing of our programs, which may not support further development of our product candidates; actions of regulatory agencies, which may affect the initiation, timing and progress of clinical trials; our effectiveness in
i
managing current and future clinical trials and regulatory processes; the success of our platform in identifying viable candidates; the continued development and acceptance of nucleic acid therapeutics as a class of drugs; our ability to demonstrate the therapeutic benefits of our stereopure candidates in clinical trials, including our ability to develop candidates across multiple therapeutic modalities; our ability to obtain, maintain and protect intellectual property; our ability to enforce our patents against infringers and defend our patent portfolio against challenges from third parties; our ability to fund our operations and to raise additional capital as needed; competition from others developing therapies for similar uses; the severity and duration of the
COVID-19
pandemic; the COVID-19
pandemic, and variants thereof, may negatively impact the conduct of, and the timing of enrollment, completion and reporting with respect to, our clinical trials; and any other impacts on our business as a result of or related to the COVID-19
pandemic, as well as other risks and uncertainties under the “Risk Factors” section of the Original 10-K
and in other filings we make with the SEC. Each forward-looking statement contained in this Amendment is based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain.
As a result of these factors, we cannot assure you that the forward-looking statements in this Amendment will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, these statements should not be regarded as representations or warranties by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. We caution you not to place undue reliance on any forward-looking statement.
In addition, any forward-looking statement in this Amendment represents our views only as of the date of this Amendment and should not be relied upon as representing our views as of any subsequent date. We anticipate that subsequent events and developments may cause our views to change. Although we may elect to update these forward-looking statements publicly at some point in the future, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
ii
WAVE LIFE SCIENCES LTD.
FORM
10-K/A
TABLE OF CONTENTS
| 1 | ||||||
Item 10. |
1 | |||||
Item 11. |
9 | |||||
Item 12. |
17 | |||||
Item 13. |
20 | |||||
Item 14. |
23 | |||||
| 24 | ||||||
Item 15. |
24 | |||||
Item 16. |
28 | |||||
| 29 | ||||||
iii
PART III
Item 10. |
Directors, Executive Officers and Corporate Governance. |
Board of Directors
Pursuant to our Constitution, there is no maximum number of directors that may hold office at any time. Our Board of Directors (the “Board”) currently consists of nine members and each of our directors is elected annually. Our Constitution requires that each of our directors retire at each annual general meeting of our shareholders, and each retiring director is then eligible for
re-election.
Pursuant to the Companies Act 1967 of Singapore (the “Singapore Companies Act”) and our Constitution, our Board must have at least one director who is ordinarily resident in Singapore. Aik Na Tan is currently our Singapore resident director. Set forth below are the names of our directors, their ages as of March 25, 2022, their offices in the Company, if any, their principal occupations or employment for at least the past five years, the length of their tenure as directors and the names of other public companies in which they hold or have held directorships during at least the past five years. In addition, information about the specific experience, qualifications, attributes or skills that led to our Board’s conclusion at the time of filing of this Amendment that each person listed below should serve as a director is set forth below:
| Name |
Age |
Position/Title | ||
| Paul B. Bolno, M.D., MBA |
48 | President, Chief Executive Officer and Director | ||
| Christian Henry |
54 | Chairman of the Board | ||
| Mark H. N. Corrigan, M.D. |
64 | Director | ||
| Peter Kolchinsky, Ph.D. |
45 | Director | ||
| Adrian Rawcliffe |
49 | Director | ||
| Ken Takanashi |
57 | Director | ||
| Aik Na Tan |
51 | Director | ||
| Gregory L. Verdine, Ph.D. |
62 | Director | ||
| Heidi L. Wagner, J.D. |
57 | Director |
Paul B. Bolno, M.D.
,
MBA
MCP-Hahnemann
School of Medicine and an M.B.A. from Drexel University. He was a general surgery resident and cardiothoracic surgery postdoctoral research fellow at Drexel University College of Medicine. We believe that Dr. Bolno’s experience serving as our President and Chief Executive Officer since 2013, his medical degree and clinical training in cardiothoracic surgery, his business degree and experience evaluating life sciences companies in healthcare private equity, and his extensive business development and operating experience working in various roles at one of the world’s largest global healthcare companies qualify him to serve on our Board. Christian Henry
1
the University of California, Irvine. We believe he is qualified to serve on our Board and as our Chairman because of his proven strengths in corporate strategy, finance and operations, along with his extensive experience leading various functions at one of the largest and most innovative genetic healthcare companies, and his experience as a board member, board committee member and chief executive officer of publicly-traded life sciences companies.
Mark H. N. Corrigan, M.D.
co-founder)
from 2016 to March 2019, and continues to serve on their board of directors. Dr. Corrigan served as President and Chief Executive Officer of Zalicus, Inc. (formerly CombinatoRx) from 2010 to 2014. Prior to that time, from 2003 to 2009, Dr. Corrigan held the role of Executive Vice President, Research and Development at Sepracor Inc. From 2000 to 2003, Dr. Corrigan served as Group Vice President, Clinical Research & Experimental Medicine at Pharmacia Corporation. Prior to this, Dr. Corrigan held various roles at The Upjohn Company, The University of North Carolina, and the National Institute of Mental Health Center for Psychoneuroendocrinology in Adults and Children at Dorthea Dix Hospital. Dr. Corrigan previously served as a member of the board of directors of Avanir Pharmaceuticals, Inc., CoLucid Pharmaceuticals, Inc., Correvio Pharma Corp., and Cubist Pharmaceuticals, Inc. Dr. Corrigan holds an M.D. from the University of Virginia and received specialty training in psychiatry at Maine Medical Center and Cornell University. He received a Bachelor of Arts in Psychology from the University of Virginia. We believe he is qualified to serve on our Board because of his extensive experience working with clinical-stage, publicly-traded biopharmaceutical companies as a board member, board committee member and chief executive officer, his medical degree and clinical training in psychiatry, and his clinical and regulatory expertise. Peter Kolchinsky, Ph.D.
Adrian Rawcliffe
Ken Takanashi
2
qualified to serve on our Board because of his extensive experience leading global research and development organizations in the biopharmaceutical industry, his experience forming, building and taking life sciences companies public, his experience serving as a board member and board committee member of various publicly-traded life sciences companies, his long-standing history with Wave, his close familiarity with our Japanese operations, and his business, financial and accounting credentials.
Aik Na Tan
.
spin-off
from DuPont, from 2015 to 2016. From 1994 to 2015, Ms. Tan held numerous global and regional leadership roles at DuPont in accounting, corporate treasury, six sigma, financial systems, supply chain, operations, financial and strategic planning, including various positions at DuPont Company (Singapore) Pte Ltd, most recently serving as the Chief Financial Officer of DuPont Titanium Technologies from November 2011 to February 2015. Ms. Tan began her professional career as a tax assistant at Price Waterhouse. Ms. Tan holds a Bachelor of Accountancy degree from the Nanyang Technological University, Singapore, and is a member of the Institute of Singapore Chartered Accountants. We believe she is qualified to serve on our Board because of her extensive experience as a chief financial officer and chief administrative officer, her broad operations experience working in Singapore corporations, her experience working on boards of directors and committees thereof, as well as her business, financial and accounting credentials. Gregory L. Verdine, Ph.D.
co-founded
the non-profit
Gloucester Marine Genomics Institute and Gloucester Biotechnology Academy in 2013 and served as the Founding President until 2016. He is the co-founder
of Fog Pharmaceuticals Inc. and currently serves as President and Chief Executive Officer for the company. He is also President, Chief Executive Officer and Chief Scientific Officer of LifeMine Therapeutics Inc. He is also the founder of Warp Drive Bio (merged with Revolution Medicines, Inc. (Nasdaq: RVMD)) and served in various roles, from Chief Scientific Officer to Chief Executive Officer, from the company’s inception in 2012 until April 2016. Dr. Verdine founded Enanta Pharmaceuticals and served as a member of its board of directors from 1990 through its initial public offering in 2013. He has served as a Venture Partner at WuXi Healthcare Ventures, AppleTree Ventures, TPG Biotech and Third Rock Ventures. He has served on the Board of Scientific Counsellors of the National Cancer Institute, and on the Board of Scientific Consultants of the Memorial Sloan Kettering Cancer Center, and was a Senior Advisor to Shin Nippon Biomedical Laboratories Ltd, Hofmann La Roche, Pfizer and Merck. Dr. Verdine is also a co-founder
of Eleven Biotherapeutics, Tokai Therapeutics, Aileron Therapeutics, and Gloucester Pharmaceuticals (acquired by Celgene in 2010). He has also served as a director of the Chemical Biology Initiative and the Program in Cancer Chemical Biology at the Dana-Farber Cancer Institute. Dr. Verdine received his Ph.D. in Chemistry from Columbia University and completed postdoctoral work in Molecular Biology at the Massachusetts Institute of Technology and Harvard Medical School. We believe he is qualified to serve on our Board because of his expertise and deep knowledge of our technology as one of our co-founders,
his vast expertise in new modality therapeutics, including as a co-inventor
of the core Wave Life Sciences stereochemistry technology and leading expert in the field of stereopure oligonucleotide therapeutics, and his long track record of founding, advising and leading multiple successful biopharmaceutical companies. Heidi L. Wagner, J.D.
3
Committees of the Board of Directors and Meetings
Meeting Attendance
Audit Committee
.
Dr. Corrigan, Messrs. Henry and Rawcliffe, and Ms. Tan satisfy the current independence standards promulgated by the SEC and by the Nasdaq Stock Market, as such standards apply specifically to members of audit committees. The Board has determined that each member of the Audit Committee meets the financial literacy requirements of the Nasdaq Stock Market Rules and that each of Messrs. Henry and Rawcliffe and Ms. Tan qualifies as an “audit committee financial expert,” as the SEC has defined that term in Item 407 of Regulation
S-K.
A copy of the Audit Committee’s written charter is publicly available on our website at www.wavelifesciences.com.
Compensation Committee
.
Each member of the Compensation Committee qualifies as independent under the definition promulgated by the Nasdaq Stock Market.
A copy of the Compensation Committee’s written charter is publicly available on our website at www.wavelifesciences.com.
Nominating and Corporate Governance Committee
.
Each member of the Nominating and Corporate Governance Committee qualifies as independent under the definition promulgated by the Nasdaq Stock Market.
4
The Nominating and Corporate Governance Committee is responsible for identifying individuals qualified to serve as directors on our Board, consistent with criteria approved by the Board, and recommending the persons to be nominated for election as directors, except where we are legally required by contract, law or otherwise to provide third parties with the right to nominate.
The process followed by the Nominating and Corporate Governance Committee to identify and evaluate director candidates includes making requests to Board members and others for recommendations, holding meetings from time to time to evaluate biographical information and reviewing background material relating to potential candidates and interviews of selected candidates by members of the committee and the Board. The Nominating and Corporate Governance Committee is also authorized by its charter to retain search firms to identify director candidates. The qualifications, qualities and skills that the committee believes must be met by a committee-recommended nominee for a position on our Board are as follows:
| • | Nominees should have a reputation for integrity, honesty and adherence to high ethical standards. |
| • | Nominees should have demonstrated business acumen, experience and ability to exercise sound judgments in matters that relate to the Company’s current and long-term objectives and should be willing and able to contribute positively to the Company’s decision-making process. |
| • | Nominees should have a commitment to understand the Company and its industry and to regularly attend and participate in meetings of the Board and its committees. |
| • | Nominees should have the interest and ability to understand the sometimes conflicting interests of our various constituencies, which include shareholders, employees, customers, governmental units, creditors and the general public, and to act in the interests of all shareholders. |
| • | Nominees should not have, nor appear to have, a conflict of interest that would impair the nominee’s ability to represent the interests of all of our shareholders and to fulfill the responsibilities of a director. |
| • | Nominees shall not be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability or any other basis proscribed by law. Diversity on our Board is highly valued and is actively considered in the nomination process as well as in the Board’s annual performance evaluation. |
| • | Nominees should generally be able to serve for at least five years before reaching the age of 70. |
The Nominating and Corporate Governance Committee considers issues of diversity among its members in identifying and considering nominees for director, and strives where appropriate to achieve a diverse balance of backgrounds, perspectives, experience, age, gender, ethnicity and country of citizenship on the Board and its committees. The value of many forms of diversity is reflected on our Board, and we believe that our current Board represents diversity of thought, background and experience, as well as diversity of personal characteristics such as gender, ethnicity and age. The Board continually seeks out highly qualified women and minority candidates, as well as candidates with diverse backgrounds, skills and experiences as part of each search for qualified directors the Company undertakes. The Board’s commitment to diversity was demonstrated by the appointments to our Board of two female directors in 2019 and an additional female director in 2020. Our Board currently includes two directors who identify as women and two directors who identify as racially diverse. A copy of the Nominating and Corporate Governance Committee’s written charter and our Corporate Governance Guidelines, which set forth our nominee requirements, are publicly available on our website at www.wavelifesciences.com.
Research and Development Committee
Board Diversity Matrix
The following Board Diversity Matrix presents our Board diversity statistics in accordance with Nasdaq Rule 5606, as self-disclosed by our directors. While the Board satisfies the minimum objectives of Nasdaq Rule 5605(f)(2) by having at least one director who identifies as female and at least one director who identifies as a member of an Underrepresented Minority (as defined by Nasdaq Rules), the Nominating and Corporate Governance Committee will continue to consider the diversity of the Board in its selection of director nominees
.
5
| Board Diversity Matrix (As of March 25, 2022) |
||||||||
| Total Number of Directors |
||||||||
| 9 |
||||||||
Female |
Male |
|||||||
| Gender: |
||||||||
| Directors |
2 |
7 |
||||||
| Number of Directors Who Identify in Any of the Categories Below: |
||||||||
| Asian |
1 |
1 |
||||||
| White |
1 |
6 | ||||||
Procedures by which Shareholders may Nominate Directors
The Nominating and Corporate Governance Committee shall review and evaluate information available to it regarding candidates proposed by shareholders and shall apply the same criteria, and shall follow substantially the same process in considering them, as it does in considering other candidates. The factors generally considered by the Nominating and Corporate Governance Committee are set out in our Corporate Governance Guidelines, which are publicly available on the “For Investors & Media” section of our website at http://ir.wavelifesciences.com/ under the heading “Corporate Governance.” If a shareholder wishes to nominate a candidate to be considered by the Nominating and Corporate Governance Committee for election as a director at our 2023 Annual General Meeting of Shareholders, it must give timely notice of the nomination in writing to our General Counsel not less than 45 days prior to the date that is one year following the date on which we first mail our proxy statement relating to our 2022 Annual General Meeting of Shareholders (the “2022 AGM”). All shareholder proposals should be marked for the attention of General Counsel, Wave Life Sciences Ltd., 733 Concord Avenue, Cambridge, MA 02138.
Familial Relationships
There are no familial relationships between any of our executive officers and directors.
Board Leadership Structure and Role in Risk Oversight
The positions of Chairman of the Board and Chief Executive Officer of Wave are presently separate. We believe that separating these positions allows our Chief Executive Officer to focus on our business operations and strategy, while allowing our Chairman of the Board to lead the Board in its fundamental role of providing advice to, and independent oversight of, management. Our Board recognizes the time, effort and energy that the Chief Executive Officer is required to devote to his position in the current business environment, as well as the commitment required to serve as our Chairman, particularly as the Board’s oversight responsibilities continue to grow. Our Board also believes that this structure ensures a greater role for the independent directors in the oversight of our Company and active participation of the independent directors in setting agendas and establishing priorities and procedures for the work of our Board. The Board retains the authority to modify this leadership structure as and when appropriate to best address the Company’s unique circumstances at any given time and to serve the best interests of our shareholders.
day-to-day
Our Board oversees the risk management activities designed and implemented by our management. Our Board executes its oversight responsibility for risk management both directly and through its committees. Our Board also considers specific risk topics, including risks associated with our strategic plan, business operations, capital structure, information technology (“IT”), data privacy and cyber security. In addition, our Board receives detailed regular reports from members of our management team and other personnel that include assessments and potential mitigation of the risks and exposures involved with their respective areas of responsibility. Our Board receives regular updates and engages regularly with our management team on matters relating to our operations, research and development efforts, clinical trials, manufacturing capabilities, financial position and liquidity, communications strategy and employee engagement and other human capital matters, among other items. As part of its risk management oversight, our Board has been working with our management team to identify and monitor
COVID-19
related risks to our Company, and is involved in strategy decisions and other actions we are taking to mitigate risks related to the impact of COVID-19
on our business. Our Board may delegate to the Audit Committee oversight of our risk management process. Our other Board committees will also consider and address risk as they perform their respective committee responsibilities. Specifically, the Audit Committee receives regular reports from members of senior management on areas of material risk to the Company, including operational, financial, legal, regulatory, strategic and reputational risks, and risks related to IT, data privacy and cyber security. As part of its charter, our Audit Committee regularly discusses with management our major risk exposures, their potential financial impact on our Company and the steps we take to manage them. Our Compensation Committee assists the Board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs. Our Nominating and Corporate Governance Committee assists the Board in fulfilling its oversight responsibilities with respect to the management of risks associated with Board organization, membership and structure, succession planning for our directors and executive officers and corporate governance. All committees report to the full Board as appropriate, including when a matter rises to the level of a material or enterprise level risk.
6
Hedging and Pledging Policies
We maintain a policy that, among other things, prohibits all officers, including our named executive officers, directors and employees from engaging in “hedging” transactions with respect to our ordinary shares. This includes short sales, hedging of share ownership positions, transactions in straddles, collars or other similar risk reduction or hedging devices, and transactions involving derivative securities relating to our ordinary shares. In addition, they are also prohibited from pledging the Company’s securities.
Shareholder Communications to the Board
Generally, shareholders who have questions or concerns or who wish to address questions regarding our business directly with the Board, or any individual director, should direct his or her questions in writing to [email protected]. Communications will be distributed to the Board, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communications. Items that are unrelated to the duties and responsibilities of the Board may be excluded, such as junk mail and mass mailings, resumes and other forms of job inquiries, surveys and solicitations or advertisements. In addition, any material that is unduly hostile, threatening, or illegal in nature may be excluded, provided that any communication that is filtered out will be made available to any outside director upon request.
7
Executive Officers
Set forth below is information as of March 25, 2022 regarding our executive officers who are not also directors. We have employment agreements with certain of our executive officers and all of our executive officers are
at-will
employees. | Name |
Age |
Title | ||
| Christopher Francis, Ph.D. |
44 | Senior Vice President, Corporate Development, Head of Emerging Areas | ||
| Kyle Moran |
51 | Chief Financial Officer | ||
| Michael Panzara, M.D., MPH |
54 | Chief Medical Officer, Head of Therapeutics Discovery and Development | ||
| Chandra Vargeese, Ph.D. |
60 | Chief Technology Officer, Head of Platform Discovery Sciences |
Christopher Francis, Ph.D.
Kyle Moran
CFO-services
to start-up
and middle market companies undergoing rapid expansion or needing expert financial counsel and worked there from 2006 to 2014. In addition, Mr. Moran held senior operational and financial roles at leading global financial services firms, including Zurich Scudder Investments, JPMorgan Chase and Putnam Investments. Mr. Moran holds a bachelor’s degree in Economics from Boston College and attended the Lemberg Master’s Program in International Economics and Finance at Brandeis University. Mr. Moran is a Chartered Financial Analyst. Michael Panzara, M.D., MPH
Chandra Vargeese, Ph.D.
co-inventor
of Macugen (pegaptanib), an approved therapy for treating wet AMD. Dr. Vargeese earned a Ph.D. in Organic Chemistry at the Indian Institute of Science, Bangalore, India and completed post-doctoral work at the University of Rhode Island. 8
CODE OF BUSINESS CONDUCT AND ETHICS
We have adopted a code of business conduct and ethics that applies to all of our employees, including our principal executive officer and principal financial and accounting officer. The text of the code of conduct and ethics is posted on our website at www.wavelifesciences.com. Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to our directors, principal executive officer or principal financial officer will be included in a Current Report on Form
8-K
filed with the SEC within four business days following the date of the amendment or waiver, unless website posting or the issuance of a press release of such amendments or waivers is then permitted by the rules of the Nasdaq Stock Market. Item 11. |
Executive Compensation. |
EXECUTIVE OFFICER AND DIRECTOR COMPENSATION
Executive Officer Compensation
We are a “smaller reporting company” under Item 10 of Regulation
S-K
promulgated under the Exchange Act, and the following compensation disclosure is intended to comply with the requirements applicable to smaller reporting companies. Summary Compensation Table
The following table shows the total compensation paid or accrued during the last two fiscal years ended December 31, 2021 and 2020 for (i) our President and Chief Executive Officer, and (ii) our two next most highly compensated executive officers, who earned more than $100,000 during the fiscal year ended December 31, 2021 and were serving as executive officers as of such date. Collectively, these three individuals are our named executive officers (“NEOs”) for purposes of this Amendment.
Non-Equity |
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Share |
Option |
Incentive Plan |
All Other |
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Salary |
Awards |
Awards |
Compensation |
Compensation |
||||||||||||||||||||||||
| Name and Principal Position |
Year |
($) |
($) (1) |
($) (2) |
($) |
($) (3) |
Total ($) |
|||||||||||||||||||||
| Paul B. Bolno, M.D., MBA |
2021 | 597,000 | 1,572,000 | 1,326,000 | 388,100 | 9,510 | 3,892,610 | |||||||||||||||||||||
| President and Chief Executive Officer |
2020 | 578,977 | — | 308,675 | 376,335 | 6,154 | 1,270,141 | |||||||||||||||||||||
| Michael Panzara, M.D., MPH |
2021 | 471,000 | 524,000 | 331,500 | 212,000 | 9,942 | 1,548,442 | |||||||||||||||||||||
| Chief Medical Officer, Head of Therapeutics Discovery and Development |
2020 | 460,860 | — | 176,386 | 184,344 | 9,792 | 831,382 | |||||||||||||||||||||
| Chandra Vargeese, Ph.D. |
2021 | 444,000 | 524,000 | 331,500 | 199,800 | 12,264 | 1,511,564 | |||||||||||||||||||||
| Chief Technology Officer, Head of Platform Discovery Sciences |
2020 | 434,520 | — | 176,386 | 173,808 | 10,872 | 795,586 | |||||||||||||||||||||
| (1) | Amount represents the aggregate grant date fair value for the restricted share unit awards identified, computed in accordance with FASB ASC Topic 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 7 to the financial statements included in the Original 10-K. |
| (2) | Amounts represent the aggregate grant date fair value for the option awards identified, computed in accordance with FASB ASC Topic 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 7 to the financial statements included in the Original 10-K. |
| (3) | For 2021, amounts include 401(k) matching contributions of $8,700 made to Drs. Bolno, Panzara and Vargeese, as well as the value of annual premiums paid by us with respect to a life insurance policy for the benefit of each of the NEOs. |
Narrative to Summary Compensation Table
Our Compensation Committee creates the policies that govern base salary, annual cash performance-based incentives, our long-term incentive program and other compensation and benefits for our NEOs. Our Compensation Committee reviews and discusses our executive officers’ proposed compensation with the Chief Executive Officer for all executives other than the Chief Executive Officer. Neither the Chief Executive Officer nor any other NEO participates in the Committee’s final determination of compensation for executive officers. The Chief Executive Officer’s compensation is determined solely by the Compensation Committee without the Chief Executive Officer present for the discussions.
9
In determining executive officer compensation, our Compensation Committee, with the assistance of its independent compensation consultant, Radford, which is part of the Human Capital Solutions practice at Aon plc and an independent executive compensation consulting firm, evaluates the market competitiveness of compensation for each of our NEOs in order to guide target compensation decisions for the coming year. Our Compensation Committee references a peer group of publicly-traded companies in the biopharmaceutical industry for purposes of gathering data to compare with our existing executive compensation levels and practices and as context for future compensation decisions. Our Compensation Committee reviews and updates the compensation peer group each year, as appropriate, to include companies that the Compensation Committee believes are competitors for executive talent and that are similar to us in terms of their stage of development, therapeutic focus, market capitalization, number of employees, structure, financial profile and geographic proximity to the Cambridge biotech cluster, as applicable. We also recognize that it is unlikely for companies to align equally on all factors, so we consider companies that meet a majority of the criteria. Due to the nature of our business, we compete for executive talent with many companies much larger than we are. Our Compensation Committee considers peer group and other industry compensation data and the recommendations of our compensation consultant when making decisions related to executive compensation, ultimately giving consideration to the competitiveness of our compensation program, internal perceptions of equity and individual performance and role. Our Compensation Committee finds comparative data from our peer group to be useful in setting and adjusting executive compensation, but it does not target our programs or any particular element of compensation to be at or within a particular percentile or range compared to our peers. Our Compensation Committee uses the peer group data primarily to ensure that our executive compensation program and its constituent elements are and remain competitive in relation to our peers, and applies judgment and discretion in establishing targeted compensation levels taking into account not only competitive market data but also the experience of the executive, scope of responsibility, critical skill sets and expertise.
Employment Agreements with Our Named Executive Officers
Paul B. Bolno, M.D., MBA
In May 2020, we entered into an amended and restated employment agreement with Dr. Bolno, pursuant to which he serves as our President and Chief Executive Officer. The employment agreement amends and restates the prior employment arrangement between the Company and Dr. Bolno. As of January 1, 2021, Dr. Bolno’s annual base salary was $597,000 and his annual target bonus percentage was a maximum of 65% of his annual base salary, with the actual amount to be paid determined based on the achievement of annual performance milestones defined by our Board in its sole discretion. Effective January 1, 2022, Dr. Bolno’s annual base salary was increased to $617,900. In February 2022, in recognition of his 2021 performance supporting the achievement of our corporate goals discussed below, Dr. Bolno received a cash bonus of $388,100 that was equal to 100% of his 2021 target bonus, 65% of his annual base salary. In addition, in January 2022, he received an option to purchase 600,000 of our ordinary shares under our 2021 Plan as a 2022 long-term incentive plan (“2022 LTIP”) award, with such shares vesting over a four-year period, with 25% vesting on the first anniversary of the date of grant and quarterly thereafter.
Pursuant to Dr. Bolno’s employment agreement, if we terminate his employment without cause or if he terminates his employment for good reason, Dr. Bolno will be entitled to receive continued payment of his then-current annual base salary for 18 months following termination; continued payment of health insurance premiums at the Company’s then normal rate of contribution until the earlier of 18 months following termination or until he commences new employment; and the payment of a separation bonus equal to his then annual target bonus opportunity prorated through the termination date. In addition, if a change of control occurs and within one year following the change of control Dr. Bolno is terminated without cause or if Dr. Bolno terminates his employment for good reason, he will be entitled to receive a lump sum cash payment equal to 18 months of his then-current annual base salary; continued payment of health insurance premiums at the Company’s then normal rate of contribution until the earlier of 18 months following termination or until he commences new employment; and the payment of a separation bonus equal to his then annual target bonus opportunity. Pursuant to applicable equity agreements with Dr. Bolno, all unvested shares underlying outstanding options and RSUs that were granted to him on or after January 1, 2018 will become fully vested upon his termination without cause or for good reason within 12 months following a change of control. Receipt of the severance and change of control benefits described above are subject to execution of a release of claims against the Company and compliance with certain restrictive covenants following the termination of his employment.
Michael Panzara, M.D., MPH
In July 2016, we entered into an employment agreement with Dr. Panzara, pursuant to which he now serves as our Chief Medical Officer, Head of Therapeutics Discovery and Development. As of January 1, 2021, Dr. Panzara’s annual base salary was $471,000, and his annual target bonus percentage was increased to a maximum of 45% of his annual base salary, with the actual amount to be paid determined based on the achievement of annual performance milestones defined by our Board in its sole discretion. Effective January 1, 2022, Dr. Panzara’s annual base salary was increased to $487,500. In February 2022, in recognition of his 2021 performance supporting the achievement of our corporate goals discussed below, Dr. Panzara received a cash bonus of $212,000 that was equal to 100% of his 2021 target bonus, 45% of his base salary. In addition, in January 2022, he received an option to purchase 200,000 of our ordinary shares under our 2021 Plan as a 2022 LTIP award, with such shares vesting over a four-year period, with 25% vesting on the first anniversary of the date of grant and quarterly thereafter
.
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Pursuant to Dr. Panzara’s employment agreement, if we terminate his employment without cause or if he terminates his employment for good reason, Dr. Panzara will be entitled to receive continued payment of his then-current annual base salary for 12 months following termination and continued payment of health insurance premiums at the Company’s then normal rate of contribution until the earlier of 12 months following termination or until he commences new employment. In addition, if a change of control occurs and within one year following the change of control Dr. Panzara is terminated without cause or Dr. Panzara terminates his employment for good reason, he will be entitled to receive a lump sum cash payment equal to 12 months of his then-current annual base salary; continued payment of health insurance premiums at the Company’s then normal rate of contribution until the earlier of 12 months following termination or until he commences new employment; and the payment of a separation bonus equal to his then annual target bonus opportunity prorated through his termination date. Pursuant to applicable equity agreements with Dr. Panzara, all unvested shares underlying outstanding options and RSUs that were granted to him on or after January 1, 2018 will become fully vested upon his termination without cause or for good reason within 12 months following a change of control. Receipt of the severance and change of control benefits described above are subject to execution of a release of claims against the Company and compliance with certain restrictive covenants following the termination of his employment.
Chandra Vargeese, Ph.D.
In May 2020, we entered into an amended and restated employment agreement with Dr. Vargeese, pursuant to which she serves as our Chief Technology Officer, Head of Platform Discovery Sciences. The employment agreement amends and restates the prior employment arrangement between the Company and Dr. Vargeese. As of January 1, 2021, Dr. Vargeese’s annual base salary was $444,000, and her annual target bonus percentage was increased to a maximum of 45% of her annual base salary, with the actual amount to be paid determined based on the achievement of annual performance milestones defined by our Board in its sole discretion. Effective January 1, 2022, Dr. Vargeese’s annual base salary was increased to $459,540. In February 2022, in recognition of her 2021 performance supporting the achievement of our corporate goals discussed below, Dr. Vargeese received a cash bonus of $199,800 that was equal to 100% of her 2021 target bonus, 45% of her base salary. In addition, in January 2022, she received an option to purchase 200,000 of our ordinary shares under our 2021 Plan as a 2022 LTIP award, with such shares vesting over a four-year period, with 25% vesting on the first anniversary of the date of grant and quarterly thereafter
.
Pursuant to Dr. Vargeese’s employment agreement, if we terminate her employment without cause or if she terminates her employment for good reason, Dr. Vargeese will be entitled to receive continued payment of her then-current annual base salary for 12 months following termination; continued payment of health insurance premiums at the Company’s then normal rate of contribution until the earlier of 12 months following termination or until she commences new employment; and the payment of a separation bonus equal to her then annual target bonus opportunity prorated through the termination date. In addition, if a change of control occurs and within one year following the change of control Dr. Vargeese is terminated without cause or if Dr. Vargeese terminates her employment for good reason, she will be entitled to receive a lump sum cash payment equal to 12 months of her then-current annual base salary; continued payment of health insurance premiums at the Company’s then normal rate of contribution until the earlier of 12 months following termination or until she commences new employment; and the payment of a separation bonus equal to her then annual target bonus opportunity. Pursuant to applicable equity agreements with Dr. Vargeese, all unvested shares underlying outstanding options and RSUs that were granted to her on or after January 1, 2018 will become fully vested upon her termination without cause or for good reason within 12 months following a change of control. Receipt of the severance and change of control benefits described above are subject to execution of a release of claims against the Company and compliance with certain restrictive covenants following the termination of her employment.
Other Provisions Applicable to Named Executive Officers
In addition, as a condition of their employment, each of our NEOs has entered into a
non-competition
and non-solicitation
agreement pursuant to which he or she has agreed not to compete with us for a period of 12 months following the termination of his or her employment with us. All agreements generally provide for at-will
employment and that our NEOs are eligible to participate in employee benefit plans of general applicability to other senior executives, which we maintain from time to time. For purposes of change of control benefits included in the Company’s employment agreements with its NEOs, change of control is defined as follows: (A) a merger or consolidation of the Company whether or not approved by the Board, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such corporation) more than 50% of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such corporation, as the case may be, outstanding immediately after such merger or consolidation; or (B) the sale or disposition by the Company of all or substantially all of the Company’s assets in a transaction requiring shareholder approval.
Base Salaries
Annual base salary is designed to provide a competitive fixed rate of pay, recognizing different levels of responsibility and performance. Actual salaries reflect the judgment and consideration of numerous factors by the Compensation Committee. These factors include the NEO’s experience, importance of position, expected future contributions, performance, comparative survey data, internal pay equity, scope of responsibilities, expertise, the criticality of the NEO’s position within the Company, the other elements of compensation received by the NEO, and the NEO’s compensation in comparison to similarly situated executive officers at comparable companies in our peer group.
11
Annual Cash Incentive Program
Our executive officers are eligible to receive annual cash incentive awards, with the target bonus opportunity for 2021 determined as a percentage of their base salary. At the beginning of 2021, our Board approved ambitious corporate goals and objectives that our Compensation Committee then used to design our annual cash incentive program for 2021. Under this program, the Compensation Committee determined that the corporate goals would apply uniformly to all of our executive officers. Our 2021 corporate goals, plus the ongoing challenges that we overcame as a result of the
COVID-19
global pandemic and its continued disruption of governments, businesses and people around the world, that were assessed to determine our 2021 corporate performance are set forth below: | • | Initiated dosing in three global clinical trials evaluating our next-generation stereopure PN-modified oligonucleotide programs, including WVE-003 for Huntington’s disease in our SELECT-HD trial, WVE-004 for ALS and FTD in our FOCUS-C9 trial, and WVE-N531 for Duchenne muscular dystrophy (achieved |
| • | Developed wtHTT (wild-type) huntingtin assay, successfully implemented and used assay for allele-selective HD programs in clinical trials, and began sharing assay with the HD community, with plans to make the assay widely available to the industry ( achieved) |
| • | Delivered data from PRECISION-HD clinical trials for first-generation programs WVE-120101 and WVE-120102 (achieved) |
| • | Showcased significant advancements in ADAR-mediated RNA base editing capability and generated in vivo (achieved) |
| • | Met or exceeded internal milestones relating to the original Takeda Category 2 programs ( achieved) |
| • | Amended and streamlined the Takeda Collaboration Agreement, resulting in receipt of an additional $22.5 million (achieved) |
| • | Three seminal papers accepted for publication in peer-reviewed journals covering our novel PN backbone chemistry modifications and preclinical proof-of-concept achieved |
| • | Strengthened our internal GMP manufacturing capabilities to support our needs as well as potential new partners ( achieved) |
| • | Maintained business continuity through COVID-19 global pandemic with more than 60% of workforce onsite and 40% of employees offsite while maintaining remarkable productivity (achieved) |
| • | Maintained low employee turnover and added key, diverse talent broadly throughout the organization ( achieved) |
| • | Actively managed spend and delivered our 2021 corporate goals below our 2021 budget ( achieved) |
Based on our Board’s assessment and consideration of the relative weighting and importance of our goals, our Board determined that we achieved 100% of our 2021 corporate goals. The Compensation Committee then determined that bonuses for 2021 performance be paid to our NEOs based on these results.
Long-Term Incentive Compensation
2021 Long-Term Incentive Program
In 2021, the long-term incentive component of the compensation of our NEOs consisted of share options and restricted share unit awards. These share options and restricted share unit awards were granted to each of our NEOs by our Compensation Committee on February 1, 2021, and vest over
a two-year term,
with 50% vesting on February 15, 2022, and the remainder vesting on February 15, 2023. The share options were granted at an exercise price of $10.48 per share. The Compensation Committee retained this two-year vesting
schedule from 2020 over our standard four-year vesting schedule as a means of driving retention and incentivizing performance over this highly critical two-year
period in Wave’s development as a clinical-stage genetic medicines company committed to delivering life-changing treatments for people battling devastating diseases. 2022 Long-Term Incentive Program
In 2022, the long-term incentive component of the compensation of our NEOs consisted solely of share options. These share options were granted to each of our NEOs by our Compensation Committee on January 1, 2022, at an exercise price of $3.14 per share, and vest over a four-year term, with 25% vesting on January 1, 2023, and the remainder vesting quarterly thereafter. The Compensation Committee determined to grant share options, based on share valuation at the time of grant and to best align employees with investors’ interests to build long-term shareholder value in Wave
.
12
2019 Performance-Based RSUs and 2021 Amended and Restated Performance-Based RSUs
In March 2019, the Compensation Committee approved the grant of performance-based RSUs to our employees, including our NEOs, that vest based on two separate performance milestones: 80% of the award will vest upon receipt of the first regulatory approval of a Wave drug product by the U.S. Food and Drug Administration or European Medicines Agency (the “Regulatory Approval Milestone”); and 20% of the award will vest upon the first commercial sale of a Wave drug product (the “Commercial Sale Milestone”), in each case, occurring by March 7, 2029, subject to continuous service (the “2019 Performance-Based RSUs”).
In order to address concerns raised regarding the long-dated nature of the 2019 Performance-Based RSUs and their ability to deliver real retentive value, the Compensation Committee decided to enhance the retentive impact of the awards by incorporating an additional milestone focused on driving nearer term execution of key strategic goals to build shareholder value in the nearer term. Accordingly, in March 2021, the Compensation Committee approved an amendment and restatement of all outstanding 2019 Performance-Based RSUs to add a third performance milestone to the two existing performance milestones. If the new performance milestone, the PN Chemistry Milestone (as defined below), is achieved prior to either of the Regulatory Approval Milestone or the Commercial Sale Milestone, then 50% of the award will be earned upon public disclosure of the achievement of clinical proof of concept of a molecule containing Wave’s PN backbone chemistry modifications (the “PN Chemistry Milestone”) and the percentages applicable to the Regulatory Approval Milestone or the Commercial Sale Milestone shall be reduced to 40% and 10%, respectively. This modification did not result in any incremental expense and the Company did not recognize any expense related to the performance-based RSUs in 2021 as the related milestones were not then-considered probable of achievement.
401(k) Plan
We maintain a 401(k) plan that is intended to qualify under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”). In general, all of our employees, including our NEOs, are eligible to participate in the 401(k) plan. Under the 401(k) plan, employees may elect to reduce their current compensation by up to the statutorily prescribed annual limit, which was equal to $19,500 in 2021, and to have the amount of such reduction contributed to the 401(k) plan. We currently match 50% of an employee’s 401(k) contributions up to a maximum of 6% of the participant’s includable compensation. Matching contributions are 100% vested upon completion of one year of service with the Company. In addition, employees who turn age 50 before the end of any calendar year may also defer up to an additional $6,500, and these
catch-up
contributions are eligible for matching contributions. Matching contributions made to each of our NEOs are included in the “Summary Compensation Table” above. 2021 Equity Incentive Plan
Our 2021 Plan was approved by our shareholders and went into effect on August 10, 2021. The 2021 Plan serves as the successor to our 2014 Plan, such that outstanding awards granted under the 2014 Plan continue to be governed by the terms of the 2014 Plan, but no awards may be made under the 2014 Plan after August 10, 2021. Accordingly, under the 2021 Plan, our Board and shareholders authorized 5,450,000 ordinary shares, plus the number of ordinary shares underlying any awards under the 2014 Plan that are forfeited, cancelled or otherwise terminated (other than by exercise or withheld by the Company to satisfy any tax withholding obligation) on or after August 10, 2021. The 2021 Plan authorizes the granting of incentive options,
non-qualified
Any shares subject to an award that is canceled, forfeited or expires prior to exercise or realization, either in full or in part, will again become available for issuance under the 2021 Plan. However, shares subject to an award under the 2021 Plan will not again be made available for issuance or delivery under the 2021 Plan if such shares are (a) shares tendered in payment of an option; (b) shares delivered or withheld by us to satisfy any tax withholding obligation; or (c) shares covered by a share-settled share appreciation right or other awards that were not issued upon the settlement of the award.
If we are acquired, our Board or Compensation Committee will with respect to share options and share appreciation rights: (i) make appropriate provision for the continuation of the share option or share appreciation right by substituting on an equitable basis for the ordinary shares then subject to such share option or share appreciation right either the consideration payable with respect to the outstanding ordinary shares in connection with the corporate transaction or securities of any successor or acquiring entity; (ii) cancel or arrange for the cancellation of the share options or share appreciation rights, to the extent not vested or exercised prior to the effective time of the transaction, in exchange for a payment in cash or ordinary shares as determined by our Board, in an amount equal to the amount by which the then fair market value of the ordinary shares subject to such vested share option or share appreciation right exceeds the exercise price; or (iii) after giving holders an opportunity to exercise to the extent vested their outstanding share options or share appreciation rights, terminate any or all unexercised share options and share appreciation rights at such time as the Board deems appropriate. If we are acquired, with respect to outstanding restricted share unit awards, our Board or Compensation Committee shall make appropriate provision for the continuation of such restricted awards on the same terms and conditions by substituting on an equitable basis for the ordinary shares then subject to such restricted awards either the consideration payable with respect to the outstanding ordinary shares
13
in connection with the transaction or securities of any successor or acquiring entity. In lieu of the foregoing, if we are acquired, our Board may provide that, upon consummation of the acquisition, each outstanding restricted award shall be terminated in exchange for payment of an amount equal to the consideration payable upon consummation of such transaction to a holder of the number of ordinary shares comprising such restricted award to the extent then vested.
Outstanding Equity Awards at 2021 Fiscal
Year-End
The following table shows grants of options and unvested restricted share unit awards outstanding on the last day of the fiscal year ended December 31, 2021 to each of the NEOs.
Option Awards |
Share Awards |
|||||||||||||||||||||||||||||||
| Name |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Share Units That Have Not Vested (#) |
Market Value of Shares or Share Units That Have Not Vested ($)(8) |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(8) |
||||||||||||||||||||||||
| Paul B. Bolno, M.D., MBA |
219,025 | — | $ | 2.48 | 3/10/2025 | |||||||||||||||||||||||||||
| 236,400 | — | $ | 18.79 | 6/16/2026 | ||||||||||||||||||||||||||||
| 72,500 | — | $ | 29.05 | 1/25/2027 | ||||||||||||||||||||||||||||
| 102,187 | 6,813 | (1) |
$ | 40.05 | 1/23/2028 | |||||||||||||||||||||||||||
| 31,500 | 31,500 | (2) |
$ | 8.17 | 3/3/2030 | |||||||||||||||||||||||||||
| — | 200,000 | (3) |
$ | 10.48 | 2/1/2031 | |||||||||||||||||||||||||||
| 13,625 | (4) |
$ | 42,783 | |||||||||||||||||||||||||||||
| 30,000 | (5) |
$ | 94,200 | |||||||||||||||||||||||||||||
| 150,000 | (6) |
$ | 471,000 | |||||||||||||||||||||||||||||
| 185,000 | (7) |
$ | 580,900 | |||||||||||||||||||||||||||||
| Michael Panzara, M.D., MPH |
131,250 | — | $ | 21.69 | 7/11/2026 | |||||||||||||||||||||||||||
| 13,800 | — | $ | 29.05 | 1/25/2027 | ||||||||||||||||||||||||||||
| 32,812 | 2,188 | (1) |
$ | 40.05 | 1/23/2028 | |||||||||||||||||||||||||||
| 18,000 | 18,000 | (2) |
$ | 8.17 | 3/3/2030 | |||||||||||||||||||||||||||
| — | 50,000 | (3) |
$ | 10.48 | 2/1/2031 | |||||||||||||||||||||||||||
| 4,375 | (4) |
$ | 13,738 | |||||||||||||||||||||||||||||
| 7,500 | (5) |
$ | 23,550 | |||||||||||||||||||||||||||||
| 50,000 | (6) |
$ | 157,000 | |||||||||||||||||||||||||||||
| 100,000 | (7) |
$ | 314,000 | |||||||||||||||||||||||||||||
| Chandra Vargeese, Ph.D. |
205,964 | — | $ | 2.48 | 3/10/2025 | |||||||||||||||||||||||||||
| 49,600 | — | $ | 18.79 | 6/16/2026 | ||||||||||||||||||||||||||||
| 19,500 | — | $ | 29.05 | 1/25/2027 | ||||||||||||||||||||||||||||
| 32,812 | 2,188 | (1) |
$ | 40.05 | 1/23/2028 | |||||||||||||||||||||||||||
| 18,000 | 18,000 | (2) |
$ | 8.17 | 3/3/2030 | |||||||||||||||||||||||||||
| — | 50,000 | (3) |
$ | 10.48 | 2/1/2031 | |||||||||||||||||||||||||||
| 4,375 | (4) |
$ | 13,738 | |||||||||||||||||||||||||||||
| 7,500 | (5) |
$ | 23,550 | |||||||||||||||||||||||||||||
| 50,000 | (6) |
$ | 157,000 | |||||||||||||||||||||||||||||
| 100,000 | (7) |
$ | 314,000 | |||||||||||||||||||||||||||||
| (1) | 25% vested on February 15, 2019 and the remainder vests in equal quarterly installments over the following 12 quarters, subject to such officer’s continued service with us on each such vesting date. The award shall become fully vested upon termination without cause or for good reason within 12 months following a change of control. |
| (2) | 50% vested on February 15, 2021 and the remaining 50% vested on February 15, 2022, subject to such officer’s continued service with us on each such vesting date. The award shall become fully vested upon termination without cause or for good reason within 12 months following a change of control. |
| (3) | 50% vested on February 15, 2022 and the remaining 50% vests on February 15, 2023, subject to such officer’s continued service with us on each such vesting date. The award shall become fully vested upon termination without cause or for good reason within 12 months following a change of control. |
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| (4) | 25% vested on February 15, 2019 and the remainder vests in equal annual installments over the following three years, subject to such officer’s continued service with us on each such vesting date. The award shall become fully vested upon termination without cause or for good reason within 12 months following a change of control. |
| (5) | 25% vested on February 15, 2020 and the remainder vests in equal monthly installments over the following 36 months, subject to such officer’s continued service with us on each such vesting date. The award shall become fully vested upon termination without cause or for good reason within 12 months following a change of control. |
| (6) | 50% vested on February 15, 2022 and the remaining 50% vests on February 15, 2023, subject to such officer’s continued service with us on each such vesting date. The award shall become fully vested upon termination without cause or for good reason within 12 months following a change of control. |
| (7) | These performance-based RSUs were granted on March 7, 2019 and were amended on March 17, 2021. A description of the vesting criteria of the performance-based-RSUs is set forth under the sub-heading “Long-Term Incentive Compensation 2019 Performance-Based RSUs and 2021 Amended and Restated Performance-Based RSUs” . |
| (8) | The market value of the RSU awards and performance-based RSUs is based on the closing price of our ordinary shares of $3.14 per share at December 31, 2021. |
Director Compensation
The following table shows the total compensation paid or accrued during the fiscal year ended December 31, 2021 to each of our
non-employee
directors. Directors who are also employees are not compensated for their service on our Board. Fees Earned or |
All Other |
|||||||||||||||
| Name |
Paid in Cash ($) (1) |
Option Awards ($) (2) |
Compensation ($) |
Total ($) |
||||||||||||
| Christian Henry |
108,000 | 138,151 | — | 246,151 | ||||||||||||
| Mark H. N. Corrigan, M.D. |
79,000 | 68,510 | — | 147,510 | ||||||||||||
| Peter Kolchinsky, Ph.D. (3) |
47,500 | 138,151 | — | 185,651 | ||||||||||||
| Amy Pott |
1,008 | — | — | 1,008 | ||||||||||||
| Adrian Rawcliffe |
56,500 | 138,151 | — | 194,651 | ||||||||||||
| Ken Takanashi |
47,500 | 138,151 | 22,125 | (4) |
207,776 | |||||||||||
| Aik Na Tan |
49,000 | 68,510 | — | 117,510 | ||||||||||||
| Gregory L. Verdine, Ph.D. |
47,500 | 138,151 | 150,000 | (5) |
335,651 | |||||||||||
| Heidi L. Wagner, J.D. |
55,000 | 68,510 | — | 123,510 | ||||||||||||
| (1) | Amounts represent fees earned during 2021 under our Non-Employee Director Compensation Policy. Ms. Pott resigned as a director of the Company effective as of January 8, 2021. |
| (2) | Amount represents the aggregate grant date fair value for the option awards identified, computed in accordance with FASB ASC Topic 718. A discussion of the assumptions used in determining grant date fair value may be found in Note 7 to the financial statements included in the Original 10-K. |
| (3) | Pursuant to the terms of the RA Capital Healthcare Fund, L.P. governing documents, Dr. Kolchinsky is required to remit to RA Capital Management, L.P. (“RA Capital”) both the cash and the equity compensation, and RA Capital and not Dr. Kolchinsky is the beneficial owner of such compensation. |
| (4) | At our 2021 Annual General Meeting of Shareholders (the “2021 AGM”), our shareholders approved a one-time, additional amount of $22,125 (which amount includes a tax gross-up) plus any applicable interest related to withholding taxes required to be paid to the U.S. Internal Revenue Service on behalf of one of our ex-U.S. directors. |
| (5) | Amount paid pursuant to a consulting agreement between the Company and Dr. Verdine. |
15
The following table shows the aggregate number of shares subject to options held by each of our
non-employee
directors as of December 31, 2021: Aggregate |
||||
Number of |
||||
Shares |
||||
Subject to |
||||
| Name |
Options |
|||
| Christian Henry |
81,000 | |||
| Mark H. N. Corrigan, M.D. |
52,500 | |||
| Peter Kolchinsky, Ph.D. |
81,000 | |||
| Amy Pott |
— | |||
| Adrian Rawcliffe |
99,000 | |||
| Ken Takanashi |
81,000 | |||
| Aik Na Tan |
42,000 | |||
| Gregory L. Verdine, Ph.D. |
347,402 | |||
| Heidi L. Wagner, J.D. |
52,500 | |||
Non-Employee
Director Compensation Policy 2021
Non-Employee
Director Compensation Policy At our 2021 Annual General Meeting of Shareholders (the “2021 AGM”), our shareholders approved our 2021
Non-Employee
Director Compensation Policy, under which our directors are compensated for their service as directors, including as members of the various committees of our Board on which they serve, for the Board service period that commenced on the date of our 2021 AGM and runs through the date of our 2022 AGM. The terms of the 2021 Non-Employee
Director Compensation Policy are as follows: (A)
Cash Compensation
: | • | Board of Directors non-employee director, other than the Chairman of the Board, and cash compensation of $75,000 to the non-employee Chairman of the Board. |
| • | Audit Committee |
| • | Compensation Committee |
| • | Nominating and Corporate Governance Committee |
| • | Research and Development Committee |
| • | Proration non-employee director who is appointed by the Board, any independent director who is appointed to the position of Chairman of the Board or chairman of any such committee of the Board or any independent director who is appointed to serve on any such committee of the Board, for their services rendered as a director and/or committee member, for the portion of the year in which such director so served. |
(B)
Equity Compensation
: | • | Initial Equity Grant One-time equity grant upon initial appointment or election to the Board of an option to purchase 42,000 ordinary shares, which shall vest as to 12.5% of the shares on a quarterly basis during the two-year period following the grant date. |
| • | Refresh Equity Grant non-employee director whose initial equity grant has an expiration date within twelve months following the 2021 AGM shall be granted an option to purchase 42,000 ordinary shares, which shall vest as to 12.5% of the shares on a quarterly basis during the two-year period following the grant date. |
16
| • | Annual Equity Grant |
| • | Limitation on Equity Grants A non-employee director shall be eligible to receive only one type of option grant at the 2021 AGM, which shall be an initial equity grant, a refresh equity grant, or an annual equity grant, in each case as described above. |
2021
One-Time
Research and Development Committee Compensation in Arrears At our 2021 AGM, our shareholders approved for the Research and Development Committee to receive cash compensation in arrears for their service on the Research and Development Committee for the period of January 1, 2021 through the date of 2021 AGM, which included cash compensation of $15,000 to the Chairman of the Research and Development Committee and $7,500 to each member of the Research and Development Committee other than the Chairman.
2021
One-Time
Tax Withholding Gross-up
At our 2021 AGM, our shareholders approved a
one-time,
additional amount of $22,125 (which amount includes a tax gross-up)
plus any applicable interest related to withholding taxes required to be paid to the U.S. Internal Revenue Service on behalf of one of our ex-U.S.
directors. Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of our ordinary shares as of March 25, 2022 for (i) the executive officers named in the Summary Compensation Table appearing elsewhere in this Amendment, (ii) each of our directors, (iii) all of our current directors and executive officers as a group and (iv) each shareholder known by us to own beneficially more than 5% of our ordinary shares. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. We deem ordinary shares that may be acquired by an individual or group within 60 days of March 25, 2022 pursuant to the exercise of options, or the vesting of restricted share unit awards, and the conversion of our outstanding Series A preferred shares into ordinary shares to be outstanding for the purpose of computing the percentage ownership of such individual or group, but such shares are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. Except as indicated in footnotes to this table, we believe that the shareholders named in this table have sole voting and investment power with respect to all ordinary shares shown to be beneficially owned by them based on information provided to us by these shareholders. Percentage ownership is based on 60,859,968 ordinary shares outstanding on March 25, 2022.
17
Ordinary Shares |
||||||||
Beneficially Owned |
||||||||
| Name |
Shares |
Percent |
||||||
| 5% Beneficial Owners |
||||||||
| RA Capital Management, L.P. (1) |
7,775,207 | 12.8 | % | |||||
| Shin Nippon Biomedical Laboratories, Ltd. (2) |
5,885,478 | 9.1 | % | |||||
| Maverick Capital, Ltd. (3) |
5,593,389 | 9.2 | % | |||||
| BB Biotech AG (4) |
4,602,858 | 7.6 | % | |||||
| PRIMECAP Management Company (5) |
4,594,575 | 7.5 | % | |||||
| M28 Capital Management LP (6) |
3,765,588 | 6.2 | % | |||||
| Directors and Named Executive Officers |
||||||||
| Paul B. Bolno, M.D., MBA (7) |
1,087,751 | 1.8 | % | |||||
| Michael Panzara, M.D., MPH (8) |
288,117 | * | ||||||
| Chandra Vargeese, Ph.D. (9) |
415,623 | * | ||||||
| Mark H. N. Corrigan, M.D. (11) |
23,625 | * | ||||||
| Christian Henry (11) |
49,500 | * | ||||||
| Peter Kolchinsky, Ph.D. (12) |
7,824,707 | 12.8 | % | |||||
| Adrian Rawcliffe (11) |
49,500 | * | ||||||
| Ken Takanashi (13) |
5,934,978 | 9.2 | % | |||||
| Heidi L. Wagner, J.D. (11) |
23,625 | * | ||||||
| Gregory L. Verdine, Ph.D. (14) |
345,902 | * | ||||||
| Aik Na Tan (11) |
7,673 | * | ||||||
| All current directors and executive officers as a group (13 individuals) (15) |
16,429,992 | 24.5 | % | |||||
| * | Represents less than 1% of ordinary shares outstanding on March 25, 2022. |
| (1) | Based on information reported by RA Capital Management, L.P. (“RA Capital”). Such shares are held by RA Capital Healthcare Fund, L.P. (the “Fund”). The general partner of RA Capital is RA Capital Management GP, LLC, of which Dr. Peter Kolchinsky and Mr. Rajeev Shah are the controlling persons. RA Capital serves as investment adviser for the Fund and may be deemed a beneficial owner of any securities of the Company held by the Fund. The Fund has delegated to RA Capital the sole power to vote and the sole power to dispose of all securities held in the Fund’s portfolio, including the ordinary shares held by the Fund. Because the Fund has divested itself of voting and investment power over the reported securities it holds and may not revoke that delegation on less than 61 days’ notice, the Fund disclaims beneficial ownership of the securities it holds for purposes of Section 13(d) of the Exchange Act. As managers of RA Capital, Dr. Kolchinsky and Mr. Shah may be deemed beneficial owners, for purposes of Section 13(d) of the Exchange Act, of any securities of the Company beneficially owned by RA Capital. RA Capital, Dr. Kolchinsky, and Mr. Shah disclaim beneficial ownership of securities beneficially owned by RA Capital. The address for RA Capital is 200 Berkeley Street, 18th Floor, Boston, MA 02116. |
| (2) | Based on information reported by Shin Nippon Biomedical Laboratories, Ltd. (“SNBL”) on Schedule 13D/A filed with the SEC on February 20, 2019. Consists of (i) 1,697,467 ordinary shares held by SNBL; (ii) 286,663 ordinary shares held by SNBL USA, Ltd. (“SNBL USA”); (iii) 1,801,348 Series A preferred shares held by SNBL; and (iv) 2,100,000 Series A preferred shares held by SNBL USA. The Series A preferred shares can be converted at any time on a one-for-one 8-1, Akashi-cho, Chuo-ku, Tokyo 104-0044, Japan. |
| (3) | Based on information reported by Maverick Capital, Ltd., Maverick Capital Management, LLC and Lee S. Ainslee on Schedule 13G filed with the SEC on February 14, 2022. Maverick Capital, Ltd. is an investment adviser registered under Section 203 of the Investment Advisers Act of 1940 and, as such, may be deemed to have beneficial ownership of the ordinary shares reported herein through the investment discretion it exercises over its clients’ accounts. Maverick Capital Management, LLC is the General Partner of Maverick Capital, Ltd. Mr. Ainslie is the manager of Maverick Capital Management, LLC. The principal business address of (i) Maverick Capital, Ltd. and Maverick Capital Management, LLC is 1900 N. Pearl Street, 20 th Floor, Dallas, Texas, 75201, and (ii) Mr. Ainslie is 222 Lakeview Avenue, Suite 520, West Palm Beach, Florida 33401. |
| (4) | Based on information reported by BB Biotech AG and Biotech Target N.V on Schedule 13G/A filed with the SEC on February 11, 2022. Such shares are held by Biotech Target N.V., a wholly-owned subsidiary of BB Biotech AG. The address of BB Biotech AG is Schwertstrasse 6, CH-8200 Schaffhausen, Switzerland and the address of Biotech Target N.V. is Ara Hill Top Building, Unit A-5, Pletterijweg Oost 1, Curaçao. |
| (5) | Based on information reported by PRIMECAP Management Company on Schedule 13G/A filed with the SEC on February 10, 2022. The address of PRIMECAP Management Company is 177 E. Colorado Blvd., 11 th Floor, Pasadena, CA 91105. |
18
| (6) | Based on information reported by M28 Capital Management LP (“M28 Capital”) on Schedule 13G filed with the SEC on October 29, 2021. M28 Capital is the investment manager to M28 Capital Master Fund LP, a Cayman Islands limited partnership (“M28 Master”). As of October 27, 2021, M28 Capital may be deemed to beneficially own an aggregate of 3,765,588 ordinary shares of the Company. The number of shares reported herein consists of 3,765,588 ordinary shares held by M28 Master. M28 Capital, as the investment manager to M28 Master, may be deemed to beneficially own these securities. Marc Elia is the Chief Investment Officer and principal owner of M28 Capital and exercises investment discretion with respect to these securities. The address of M28 Capital is 700 Canal Street, 2 nd Floor, Stamford, CT, 06902. |
| (7) | Consists of (i) 287,826 ordinary shares held by Dr. Bolno and (ii) 799,925 ordinary shares underlying options exercisable within 60 days of March 25, 2022. |
| (8) | Consists of (i) 47,067 ordinary shares held by Dr. Panzara and (ii) 241,050 ordinary shares underlying options exercisable within 60 days of March 25, 2022. |
| (9) | Consists of (i) 44,559 ordinary shares held by Dr. Vargeese and (ii) 371,064 ordinary shares underlying options exercisable within 60 days of March 25, 2022. |
| (11) | Consists of ordinary shares underlying options exercisable within 60 days of March 25, 2022. |
| (12) | See Footnote (1) above. Also consists of 49,500 ordinary shares underlying options exercisable within 60 days of March 25, 2022 held by Dr. Kolchinsky. |
| (13) | See Footnote (2) above. Also consists of 49,500 ordinary shares underlying options exercisable within 60 days of March 25, 2022 held by Mr. Takanashi. |
| (14) | Consists of (i) 30,000 ordinary shares held by Dr. Verdine and (ii) 315,902 ordinary shares underlying options exercisable within 60 days of March 25, 2022. |
| (15) | Consists of (i) 2,288,108 ordinary shares underlying options exercisable within 60 days of March 25, 2022, held by our current directors and executive officers, (ii) 10,240,536 outstanding ordinary shares beneficially owned by our current directors and executive officers and entities affiliated with certain of our directors, and (iii) 3,901,348 Series A preferred shares, which can be converted at any time on a one-for-one |
19
EQUITY COMPENSATION PLAN INFORMATION
The following table provides certain information with respect to our equity compensation plans in effect as of December 31, 2021.
Number of |
||||||||||||
Securities |
||||||||||||
Number of Securities |
Weighted-Average |
Remaining |
||||||||||
to be Issued upon |
Exercise Price of |
Available for Future |
||||||||||
Exercise of |
Outstanding |
Issuance under |
||||||||||
Outstanding Options, |
Options, Warrants |
Equity |
||||||||||
| Plan Category |
Warrants and Rights |
and Rights |
Compensation Plans |
|||||||||
| Equity compensation plans approved by security holders |
8,744,635 | (1) |
$ | 10.23 | (2) |
4,015,356 | (3) | |||||
| Equity compensation plans not approved by security holders |
88,875 | (4) |
$ | 9.28 | (5) |
— | ||||||
| Total |
8,833,510 | $ | 10.22 | 4,015,356 | ||||||||
| (1) | Consists of options to purchase 6,889,535 of our ordinary shares outstanding under the 2014 Plan and the 2021 Plan, 802,993 of our ordinary shares subject to performance-based RSUs outstanding under the 2014 Plan, and 1,072,357 of our ordinary shares subject to time-based RSUs outstanding under the 2014 Plan and the 2021 Plan, in each case as of December 31, 2021. |
| (2) | Reflects the weighted average exercise price of the options to purchase 6,889,535 of our ordinary shares outstanding under the 2014 Plan and 2021 Plan, as of December 31, 2021. |
| (3) | Consists of 3,132,882 of shares available for future grants under the 2021 Plan, as well as 882,474 of shares that remain available for sale under the 2019 Employee Share Purchase Plan, in each case as of December 31, 2021. |
| (4) | Consists of options to purchase 68,625 of our ordinary shares granted outside of the 2014 Plan and the 2021 Plan in accordance with Nasdaq Listing Rule 5635(c)(4) and 20,250 of our ordinary shares subject to time-based RSUs granted outside of the 2014 Plan and the 2021 Plan in accordance with Nasdaq Listing Rule 5635(c)(4), outstanding as of December 31, 2021. |
| (5) | Reflects the weighted average exercise price of the options to purchase 68,625 of our ordinary shares granted in accordance with Nasdaq Listing Rule 5635(c)(4), outstanding as of December 31, 2021. |
Item 13. |
Certain Relationships and Related Transactions, and Director Independence. |
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
The following includes a summary of transactions since January 1, 2020 to which we have been a party, in which the amount involved in the transaction exceeded the lesser of $120,000 or one percent of the average of our total assets at December 31, 2021 and 2020, and in which any of our directors, executive officers or beneficial owners of more than 5% of our ordinary shares, or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and other arrangements, which are described under, “Executive Officer and Director Compensation.” We refer to such transactions as “related party transactions” or “related person transactions” and such persons as “related parties” or “related persons.” With the approval of our Board, we have engaged in the related party transactions described below.
Indemnification Agreements with Officers and Directors
We have entered into deeds of indemnity with our directors and our executive officers. These agreements will require us to indemnify these individuals to the fullest extent permitted under Singapore law against liabilities that may arise by reason of their service to us as a result of any proceeding against them as to which they could be indemnified. These indemnification rights shall not be exclusive of any other right which an indemnified person may have or hereafter acquire under any statute, provision of our Constitution, agreement, vote of shareholders or disinterested directors or otherwise if he or she is subsequently found to have been negligent or otherwise have breached his or her trust or fiduciary duties or to be in default thereof, or where the Singapore courts have declined to grant relief.
Consulting Agreement with Gregory L. Verdine, Ph.D.
Gregory L. Verdine, Ph.D., a member of our Board, entered into a consulting agreement with Wave Life Sciences USA, Inc. (“Wave USA”), our wholly owned subsidiary, dated as of April 1, 2012, pursuant to which Dr. Verdine serves as a scientific advisor. The consulting agreement does not have a specified term and may be terminated by either party upon 14 days’ prior written notice. Wave USA pays Dr. Verdine $12,500 per month pursuant to the consulting agreement and, in each of 2020 and 2021, Dr. Verdine was paid an aggregate of $150,000 under this agreement.
20
Agreements with Pfizer and its Affiliate
On May 5, 2016, we entered into a Research, License and Option Agreement with Pfizer Inc. (“Pfizer”), which we refer to herein as the “Pfizer Collaboration Agreement.” Simultaneously with the entry into the Pfizer Collaboration Agreement, on May 5, 2016, we entered into a Share Purchase Agreement (the “Pfizer Equity Agreement”) with C.P. Pharmaceuticals International C.V., an affiliate of Pfizer (the “Pfizer Affiliate”). We refer to the Pfizer Collaboration Agreement and the Pfizer Equity Agreement herein collectively as the “Pfizer Agreements.”
Pursuant to the terms of the Pfizer Collaboration Agreement, we and Pfizer have agreed to collaborate on the discovery, development and commercialization of stereopure oligonucleotide therapeutics for up to five programs (each, a “Pfizer Program”), each directed at a genetically-defined hepatic target selected by Pfizer. Under the Pfizer Collaboration Agreement, the parties agreed to collaborate during a four-year research term. The research term for the Pfizer Collaboration Agreement ended in May 2020.
Under the terms of the Pfizer Agreements, Pfizer paid us $40.0 million upfront, $30.0 million of which was in the form of an equity investment in our ordinary shares.
Under the Pfizer Equity Agreement, we issued 1,875,000 ordinary shares (the “Pfizer Shares”) to the Pfizer Affiliate at a purchase price of $16.00 per share, for an aggregate purchase price of $30.0 million. Under the terms of the Pfizer Equity Agreement, the Pfizer Shares were subject to a
lock-up
restriction, such that the Pfizer Affiliate agreed not to, nor cause its affiliates to, without our prior approval, sell, transfer or otherwise dispose of the Pfizer Shares until certain specified periods of time after the effective date of the Pfizer Equity Agreement. We also agreed to provide the Pfizer Affiliate with registration rights, as described under “Registration Rights under our Share Purchase Agreement with Pfizer” below. Registration Rights under our Share Purchase Agreement with Pfizer
Under the terms of the Pfizer Equity Agreement with the Pfizer Affiliate, under which the Pfizer Affiliate purchased the Pfizer Shares, subject to certain conditions and limitations, we agreed to provide certain demand registration rights to the Pfizer Affiliate in order to register all or a portion of the Pfizer Shares purchased by the Pfizer Affiliate. We also provided the Pfizer Affiliate with certain “piggyback” registration rights for a certain period of time, subject to certain conditions and limitations, such that when we propose to register our ordinary shares for our account, the Pfizer Affiliate will have the right to include some or all of the Pfizer Shares in such registration. The Pfizer Equity Agreement also contains other customary terms and conditions of the parties with respect to the registration of the Pfizer Shares.
Related Person Transaction Policy
Our Board has adopted a written related person transaction policy that requires future transactions between us and any director, executive officer, holder of 5% or more of any class of our capital stock or any member of the immediate family of, or entities affiliated with, any of them, or any other related persons, as defined in Item 404 of Regulation
S-K,
or their affiliates, in which the amount involved is equal to or greater than $120,000, be approved in advance by our Audit Committee, or if Audit Committee approval would be inappropriate, by another independent body of our Board. In approving or rejecting such proposed related person transaction, the committee is to consider all available information deemed relevant by the committee, including, but not limited to, the extent of the related person’s interest in the transaction and whether the transaction is on terms no less favorable to us than terms we could have generally obtained from an unaffiliated third party under the same or similar circumstances. The committee approves only those transactions that, in light of known circumstances, are deemed to be in our best interests. In the event that any member of the committee is not a disinterested person with respect to the related person transaction under review, that member is excluded from the review and approval or rejection of such related person transaction; provided, however, that such committee member may be counted in determining the presence of a quorum at the meeting of the committee at which such transaction is considered. If we become aware of an existing related person transaction which has not been approved under the policy, the matter will be referred to the committee. The committee evaluates all options available, including ratification, revision or termination of such transaction. In the event that management determines that it is impractical or undesirable to wait until a meeting of the committee to consummate a related person transaction, the chair of the committee may approve such transaction in accordance with the related person transaction approval policy. Any such approval must be reported to the committee at the next regularly scheduled meeting. Director Independence
Our Board believes that independence is one important component of a high-functioning board capable of objective decision-making that represents the long-term interests of shareholders and the Company. Since the Company’s initial public offering in 2015, our Board has enhanced its independence by replacing two previous directors — a founder and a representative of an investor — with five directors who are independent and not affiliated with any of our principal shareholders. We further enhanced our Board’s independent leadership by appointing Christian Henry as its independent Chairman. Our Board is committed to ensuring that its members reflect an appropriate level of independence in conjunction with the combination of qualifications, qualities and skills required to exercise its duties and responsibilities and serve the best interests of the Company and its shareholders. In accordance with
21
our Corporate Governance Guidelines and Nasdaq rules, we hold executive sessions of our independent directors in conjunction with our regularly scheduled board meetings and otherwise as appropriate. In addition, our Compensation Committee meets in executive session with no members of management present, as necessary or appropriate, to address various compensation matters, including deliberations regarding our Chief Executive Officer’s performance and compensation.
Our Board has reviewed the materiality of any relationship that each of our directors has with the Company, either directly or indirectly. Based upon this review, our Board has determined that the following members of the Board are “independent directors” as defined by the Nasdaq Stock Market: Mses. Tan and Wagner, Drs. Kolchinsky and Corrigan, and Messrs. Henry, Rawcliffe and Takanashi.
22
Item 14. |
Principal Accountant Fees and Services. |
Our independent registered public accounting firm is KPMG LLP , Boston, MA , Auditor Firm ID: 185 .
The following table presents fees for professional audit services rendered by KPMG LLP for the services described in the table. Fees disclosed below include fees actually billed or expected to be billed for services pertaining to the applicable fiscal year.
2021 |
2020 |
|||||||
Audit fees (1) |
$ | 977,558 | $ | 1,110,833 | ||||
Audit-related fees (2) |
— | — | ||||||
Tax fees (2) |
— | — | ||||||
All other fees (2) |
— | — | ||||||
| (1) | Audit fees consisted of audit work performed in the preparation of financial statements, as well as work generally only the independent registered public accounting firm and independent Singapore auditor can reasonably be expected to provide, such as statutory audits and the provision of consents in connection with the filing of registration statements and related amendments, as well as other filings. |
| (2) | There were no audit-related, tax or other fees in 2020 or 2021. |
Policy on Audit Committee
Pre-Approval
of Audit and Permissible Non-Audit
Services of Independent Public Accounting Firm In connection with our initial public offering, we adopted a policy under which the Audit Committee must
pre-approve
all audit and permissible non-audit
services to be provided by the independent registered public accounting firm and independent Singapore auditor. As part of its review, the Audit Committee also considers whether the categories of pre-approved
services are consistent with the rules on accountant independence of the SEC and the Public Company Accounting Oversight Board. The Audit Committee pre-approved
all services performed since the pre-approval
policy was adopted. Prior to engagement of an independent registered public accounting firm and independent Singapore auditor for the next year’s audit, management will submit an aggregate of services expected to be rendered during that year for each of four categories of services to the Audit Committee for approval.
1. services include audit work performed in the preparation of financial statements, as well as work that generally only an independent registered public accounting firm and independent Singapore auditor can reasonably be expected to provide, including comfort letters, statutory audits, and attest services and consultation regarding financial accounting and/or reporting standards.
Audit
2. services are for assurance and related services that are traditionally performed by an independent registered public accounting firm and independent Singapore auditor, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory requirements.
Audit-related
3. services include all services performed by an independent registered public accounting firm’s tax personnel except those services specifically related to the audit of the financial statements, and include fees in the areas of tax compliance, tax planning, and tax advice.
Tax
4. are those associated with services not captured in the other categories. The Company generally does not request such services from our independent registered public accounting firm and independent Singapore auditor.
Other fees
Prior to engagement, the Audit Committee
pre-approves
these services by category of service. During the year, circumstances may arise when it may become necessary to engage our independent registered public accounting firm and independent Singapore auditor for additional services not contemplated in the original pre-approval.
In those instances, the Audit Committee requires specific pre-approval
before engaging our independent registered public accounting firm and independent Singapore auditor. The Audit Committee may delegate pre-approval
authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval
decisions to the Audit Committee at its next scheduled meeting. 23
PART IV
Item 15. |
Exhibits and Financial Statement Schedules. |
Item 15(a). |
The documents listed below are filed as part of this Amendment No. 1 to Annual Report on Form 10-K/A. | |
Item 15(a)(1) and (2). |
See Item 8 of the Original 10-K. Other financial statement schedules have not been included because they are not applicable or the information is included in the financial statements or notes thereto. | |
Item 15(a)(3). |
Exhibits: The exhibits listed below are filed with, or incorporated by reference in, this Amendment. | |
24
25
26
Exhibit Number |
Exhibit Description |
Filed with this Report |
Incorporated by Reference herein from Form or Schedule |
Filing Date |
SEC File/Reg. Number | |||||
| 10.21.4+ | Form of Restricted Share Unit Agreement for UK Participants under the 2021 Plan, effective as of August 10, 2021 | Form 10-Q (Exhibit 10.6) |
11/10/2021 | 001-37627 | ||||||
| 10.22.1+ | Form of Inducement Non-qualified Share Option Agreement | Form 10-Q (Exhibit 10.3) |
08/10/2020 | 001-37627 | ||||||
| 10.22.2+ | Form of Inducement Restricted Share Unit Agreement | Form 10-Q (Exhibit 10.7) |
11/10/2021 | 001-37627 | ||||||
| 10.23.1 | Open Market Sale Agreement, dated as of May 10, 2019, by and between the Registrant and Jefferies LLC. | Form S-3ASR (Exhibit 1.2) |
05/10/2019 | 333-231382 | ||||||
| 10.23.2 | Amendment No. 1 to Open Market Sale Agreement, dated as of March 2, 2020, by and between the Registrant and Jefferies LLC | POSASR (Exhibit 1.3) |
03/02/2020 | 333-231382 | ||||||
| 10.23.3 | Amendment No. 2, dated March 3, 2022, to the Open Market Sale Agreement, dated as of May 10, 2019, by and between Wave Life Sciences Ltd. and Jefferies LLC. | Form 8-K (Exhibit 10.1) |
03/03/2022 | 001-37627 | ||||||
| 21.1 | List of Subsidiaries of the Registrant | Form 10-K (Exhibit 21.1) |
03/12/2018 | 001-37627 | ||||||
| 23.1 | Consent of Independent Registered Public Accounting Firm | Form 10-K (Exhibit 23.1) |
03/03/2022 | 001-37627 | ||||||
| 24.1 | Power of Attorney (included on signature page to the Original 10-K) | |||||||||
| 31.1 | Certifications of Principal Executive Officer pursuant to Rule 13a-14(a) | X | ||||||||
| 31.2 | Certifications of Principal Financial Officer pursuant to Rule 13a-14(a) | X | ||||||||
| 32* | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Principal Executive Officer and Principal Financial Officer. | Form 10-K (Exhibit 32) |
03/03/2022 | 001-37627 | ||||||
| 101.INS | XBRL Instance Document – The Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | Form 10-K (Exhibit 101.INS) |
03/03/2022 | 001-37627 | ||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | Form 10-K (Exhibit 101.SCH) |
03/03/2022 | 001-37627 | ||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | Form 10-K (Exhibit 101.CAL) |
03/03/2022 | 001-37627 | ||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | Form 10-K (Exhibit 101.DEF) |
03/03/2022 | 001-37627 | ||||||
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Exhibit Number |
Exhibit Description |
Filed with this Report |
Incorporated by Reference herein from Form or Schedule |
Filing Date |
SEC File/Reg. Number | |||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | Form 10-K (Exhibit 101.LAB) |
03/03/2022 | 001-37627 | ||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | Form 10-K (Exhibit 101.PRE) |
03/03/2022 | 001-37627 | ||||||
| 104 | The cover page for this Amendment No. 1 to the Annual Report on Form 10-K for the year ended December 31, 2021 has been formatted in Inline XBRL and is contained within the Inline XBRL document. |
X | ||||||||
| (*) | The certification incorporated by reference as Exhibit 32 that was attached to the Original 10-K is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Wave Life Sciences Ltd. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of the Original 10-K, irrespective of any general incorporation language contained in such filing. |
| (+) | Indicates management contract or compensatory plan or arrangement. |
| (†) | Confidential treatment has been granted with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission. |
| (††) | Certain confidential portions of this Exhibit were omitted by means of marking such portions with brackets (“[***]”) because the identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed. |
Item 16. |
Form 10-K Summary. |
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Amendment No. 1 to Annual Report on Form
10-K/A
to be signed on its behalf by the undersigned, thereunto duly authorized. | Wave Life Sciences Ltd. | ||||||
| Date: April 28, 2022 | By: | /s/ Paul B. Bolno, M.D., MBA | ||||
| Paul B. Bolno, M.D., MBA | ||||||
| President and Chief Executive Officer | ||||||
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