Aceragen (ACGN) DEF 14ADefinitive proxy

Idera Pharmaceuticals, Inc., a Delaware corporation, which is referred to as “we,” “us,” the “Company,” or “Idera” in this proxy statement, has made these proxy materials available to you on the Internet, or upon your request, has delivered a printed or email copy of the proxy materials to you, because our board of directors (our “board” or the “board”) is soliciting your proxy to vote at our 2021 annual meeting of stockholders, or the 2021 annual meeting. The 2021 annual meeting will be held on Tuesday, June 8, 2021, at 9:00 a.m., Eastern Time, via teleconference or at such other time and place to which the meeting may be adjourned, continued, or postponed. If the 2021 annual meeting is adjourned for any reason, then proxies submitted may be used at any adjournment of the 2021 annual meeting.

In response to the COVID-19 pandemic, the 2021 annual meeting will be held completely by remote communication. There will be no physical meeting location and the meeting will only be conducted via teleconference. Accordingly, you will not be able to attend the 2021 annual meeting in person. To participate in the meeting, please use the following conference call phone and conference ID numbers:

We have elected to provide access to our proxy materials for the 2021 annual meeting to our stockholders via the Internet. Accordingly, on or about April 29, 2021, we will begin mailing a Notice of Internet Availability of Proxy Materials, or Notice of Internet Availability, and all other proxy materials, including the Notice of 2021 Annual Meeting of Stockholders, this proxy statement, and accompanying proxy card. For shares held in street name (held for your account by a broker or other nominee), a voting instruction form and the Annual Report on Form 10-K for the fiscal year ended December 31, 2020, or 2020 Annual Report, will be made available to stockholders on the Internet on the same date.

Pursuant to rules adopted by the U.S. Securities and Exchange Commission, or SEC, we are providing access to our proxy materials over the Internet rather than printing and mailing the proxy materials. We believe electronic delivery will expedite the receipt of materials and will help lower our costs and reduce the environmental impact of our 2021 annual meeting materials. Therefore, a Notice of Internet Availability will be mailed to holders of record and beneficial owners of our common stock starting on or around April 29, 2021. The Notice of Internet Availability will provide instructions as to how stockholders may access and review the proxy materials, including the Notice of Annual Meeting, proxy statement, proxy card, and 2020 Annual Report, on the website referred to in the Notice of Internet Availability or, alternatively, how to request that a copy of the proxy materials, including a proxy card, be sent to them by mail. The Notice of Internet Availability also will provide voting instructions. In addition, stockholders of record may request to receive the proxy materials in printed form by mail or electronically by e-mail on an ongoing basis for future

Holders of record of our common stock as of the close of business on April 12, 2021, the record date for the 2021 annual meeting, are entitled to vote on each matter properly brought before the 2021 annual meeting. Holders of our common stock will be entitled to one vote for each share of common stock held as of the record date. As of the close of business on April 12, 2021, the record date for the 2021 annual meeting, we had 50,033,297 shares of common stock outstanding.

If you are a stockholder of record (meaning that you hold shares in your name in the records of our transfer agent, Computershare Trust Company, N.A., and that your shares are not held in “street name” by a bank or brokerage firm), you may vote your shares in any one of the following ways:

Under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and related SEC regulations, the vote on executive compensation, as described in greater detail in Proposal Two, set forth elsewhere in this proxy statement, is an advisory vote, meaning it is non-binding. The vote on the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm, as described in greater detail in Proposal Three, is also an advisory vote. Our board will carefully consider the outcome of each of these votes.

Our board of directors does not know of any other business to be conducted or matters to be voted upon at the 2021 annual meeting. If any other matter properly comes before the 2021 annual meeting, the persons named in the proxy card that accompanies this proxy statement will exercise their judgment in deciding how to vote or otherwise act with respect to that matter at the 2021 annual meeting.

We are making the solicitation and will bear the costs of soliciting proxies. In addition to solicitations by mail, our directors, officers, and employees, without additional remuneration, may solicit proxies by telephone, facsimile, email, personal interviews, and other means. We may engage a proxy solicitor to distribute our proxy materials and solicit proxies, and if we were to do so would pay a fee for such services and reimburse the solicitor for reasonable disbursements. We have requested that brokerage houses, custodians, nominees, and fiduciaries forward copies of the proxy materials to the persons for whom they hold shares and request instructions for voting the proxies. We will reimburse the brokerage houses and other persons for their reasonable out-of-pocket expenses in connection with this distribution.

If you are interested in submitting a proposal for inclusion in the proxy statement and proxy card for our 2022 annual meeting of stockholders, or the 2022 annual meeting, you need to follow the procedures outlined in Rule 14a-8 of the Exchange Act. We must receive your proposal intended for inclusion in the proxy statement at our principal executive offices, 505 Eagleview Blvd., Suite 212, Exton, Pennsylvania 19341, Attention: Secretary, no later than December 30, 2021. SEC rules set standards for the types of stockholder proposals and the information that must be provided by the stockholder making the request.

If you wish to present a proposal at the 2022 annual meeting, but do not wish to have the proposal considered for inclusion in the proxy statement and proxy card or have not complied with the requirements for inclusion of such proposal in our proxy statement under SEC rules, you must also give written notice to us at the address noted above. Our bylaws specify the information that must be included in any such notice, including a brief description of the business to be brought before the annual meeting, the name of the stockholder proposing such business, and stock ownership information for such stockholder. In accordance with our bylaws, we must receive this notice (or the stockholder director nomination, see “Stockholder Nominees”) at least 60 days, but not more than 90 days, prior to the date of the 2022 annual meeting and the notice must include specified information regarding the proposal and the stockholder making the proposal.

Notwithstanding the foregoing, if we provide less than 70 days’ notice or prior public disclosure of the date of the annual meeting to the stockholders, notice by the stockholders must be received by our Secretary

Dr. Csimma, age 62, currently serves as a board director, the chair of the nominating and corporate governance committee, and a member of the compensation committee and the audit committee of Seneca Biopharma, Inc. (Nasdaq: SNCA; formerly Neuralstem, Inc.), having been elected to its board of directors in September 2017. She also serves as the chair of the board of directors of Caraway Therapeutics since April of 2019 (executive chair in 2019) and as the chair of the board of directors of Forendo Pharma, since May 2020. Dr. Csimma also serves on advisory boards, including the Muscular Dystrophy Association Venture Philanthropy Scientific Advisory Committee since 2006; the Harvard and Brigham and Women’s Hospital MRCT Center External Advisory Board since 2015; the TREAT-NMD Advisory Committee for Therapeutics (TACT) since 2009; and the Executive Oversight Board to the National Institutes of Health (NIH) NeuroNext Network since 2013. Dr. Csimma previously served as a director on the boards of Juniper Pharma (from 2010 until its acquisition by Catalent in 2018), Vtesse Pharma (from 2014 until its acquisition by Sucampo in 2017), was the executive chair and a senior advisor of Exonics Therapeutics (from 2016 to 2017), and was President, founding CEO, and board director of Cydan Inc. from 2012 to 2014. She also served on the board of directors of T1D Exchange (non-profit-Type 1 Diabetes) from 2018 to 2020 and the NIH Blueprint Neurotherapeutics Network External Oversight Committee from 2014 to 2018, was Vice President of Drug Development at Virdante Pharmaceuticals Inc. from 2009 to 2011, Principal at Clarus Ventures LLC (now Blackstone Life Science), and held roles of increasing responsibility in Clinical Development and Translational Research at Wyeth (now Pfizer), Genetics Institute, and Dana Farber Cancer Institute. Dr. Csimma holds both a Doctor of Pharmacy and a Bachelor of Science in Pharmacy from the Massachusetts College of Pharmacy and Allied Health Sciences, as well as a Master of Health Professions from Northeastern University. We believe that Dr. Csimma’s qualifications to sit on our board of directors include her significant public company management and board experience and knowledge of our industry.

Mr. Dougherty, age 63, currently serves as chair of our board of directors. Mr. Doughery was executive chairman of Celator Pharmaceuticals, Inc. (“Celator”) from August 2015 until July 2016; he also served as a director of Celator from July 2013 to July 2016. Mr. Dougherty previously served in a variety of senior positions in the biopharmaceutical industry, including as chief executive officer at Kalidex Pharmaceuticals, Inc.; president and chief executive officer at Adolor Corporation; president and chief operating officer at Genomics Collaborative, Inc.; president and chief executive officer at Genaera Corporation; and chief financial officer at Centocor, Inc. Mr. Dougherty currently serves on the board of directors of Trevena, Inc. (Nasdaq: TRVN) and Marinus Pharmaceuticals, Inc. (Nasdaq: MRNS), and previously served as a member of the board of directors of Foundation Medicine, Inc., Aviragen Therapeutics, Inc., Cempra, Inc., and ViroPharma Incorporated. Mr. Dougherty received a B.S. in Accounting from Villanova University. We believe that Mr. Dougherty’s qualifications to sit on our board of directors include his significant public company management and board experience and knowledge of our industry.

Vincent Milano, age 57, has been our President and Chief Executive Officer, and a member of our board of directors, since December 2014. Prior to joining us, Mr. Milano served as chairman, president, and chief executive officer of ViroPharma Inc., a pharmaceutical company that was acquired by Shire Plc in January 2014, from March 2008 to January 2014, as its vice president, chief financial officer, and chief operating officer from January 2006 to March 2008, and as its vice president, chief financial officer, and treasurer from April 1996 to December 2005. Mr. Milano also served on the board of directors of ViroPharma from March 2008 to January 2014. Prior to joining ViroPharma, Mr. Milano served in increasingly senior roles, most recently senior manager, at KPMG LLP, an independent registered public accounting firm, from July 1985 to March 1996. Mr. Milano currently serves on the board of directors of

Our board of directors is responsible for establishing our broad corporate policies and overseeing the management of our Company. Our chief executive officer and our other executive officers are responsible for our day-to-day operations. Our board evaluates our corporate performance and approves, among other things, our corporate strategies and objectives, operating plans, major commitments of corporate resources and significant policies. Our board also evaluates and appoints our executive officers.

Our board of directors met five times during 2020. Each director who served as a director during 2020 attended at least 75% of the total number of board meetings and committee meetings for the committees on which he or she served during 2020.

While we do not have a formal policy regarding director attendance, we strongly encourage and expect our directors to attend our annual meetings of stockholders. All of our directors virtually attended the 2020 annual meeting of stockholders.

Our board of directors does not have a policy on whether the offices of chairperson of the board of directors and chief executive officer should be separate and, if they are to be separate, whether the chairperson of the board of directors should be selected from among the independent directors or should be an employee of our Company. Our board of directors believes that it should have the flexibility to make these determinations at any given point in time in the way that it believes best to provide appropriate leadership for our Company. Currently, Mr. Milano serves as our chief executive officer. Mr. Geraghty, an independent director, served as chair of our board of directors from 2013 until April 28, 2021, at which time Mr. Dougherty, also an independent director, succeeded him as chair. Our board of directors believes that this separation allows our chief executive officer to focus on our day-to-day business, while allowing the chairperson of the board of directors to lead the board of directors in its fundamental role of providing advice to and independent oversight of management.

Our board of directors recognizes that no single leadership model is right for all companies and at all times and that depending on the circumstances, other leadership models, such as a combined chairperson and chief executive officer, might be appropriate. Accordingly, the board of directors periodically reviews its leadership structure. Pursuant to our corporate governance guidelines, if the chairperson is not an independent director, the board of directors may elect a lead director from its independent directors. In such case, the chairperson and chief executive officer would consult periodically with the lead director on board of directors matters and on issues facing our Company. In addition, the lead director would serve as the principal liaison between the chairperson of the board of directors and the independent directors and would preside at any executive session of independent directors.

Our board of directors, as a whole, has responsibility for risk oversight, with reviews of certain areas being conducted by relevant committees that report directly to the board of directors. The oversight responsibility of the board of directors and its committees is enabled by management reporting processes that are designed to provide visibility to the board of directors about the identification, assessment, and management of critical risks and management’s risk mitigation strategies. These areas of focus include competitive, economic, operational, financial (accounting, credit, liquidity, and tax), legal, regulatory, compliance, health, safety, environmental, political, and reputational risks. Our board of directors regularly reviews information regarding our strategy, operations, credit, and liquidity, as well as the risks associated with each. Our compensation committee is responsible for overseeing risks relating to our executive compensation plans and arrangements. Our audit committee is responsible for overseeing financial risks and risks associated with related party transactions. Our nominating and corporate governance committee is responsible for overseeing risks associated with governance and the independence of the board of directors. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, our entire board of directors is regularly informed through committee reports about such risks.

The current members of our compensation committee are Dr. Gowen (Chair), Dr. Csimma, and Mr. Dougherty. During 2020, the compensation committee held six meetings. The compensation committee may delegate to one or more executive officers of the Company the power to grant operations or stock awards to employees of the Company or its subsidiaries who are not directors or executive officers of the Company. The compensation committee may also form and delegate authority to one or more subcommittees as it deems appropriate.

The processes and procedures followed by our compensation committee in considering and determining executive compensation are described below under the heading “Executive Compensation.”

The process followed by our nominating and corporate governance committee to identify and evaluate director candidates includes requests to members of our board of directors and others for recommendations, meetings from time to time to evaluate biographical information and background material relating to potential candidates and interviews of selected candidates by members of our nominating and corporate governance committee and our board of directors. The nominating and corporate governance committee has from time to time used a third-party recruiting firm to identify and interview potential candidates.

In considering whether to recommend any particular candidate for inclusion in the board of director’s slate of recommended director nominees, the nominating and corporate governance committee will apply the criteria set forth in our corporate governance guidelines. These criteria include the candidate’s:

Our corporate governance guidelines also provide that candidates should not be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability, or any other basis proscribed by law and that our nominating and corporate governance committee should consider the value of diversity of the board of directors when evaluating particular candidates. The nominating and corporate governance committee has not adopted any formal or informal diversity policy and treats diversity as one of the criteria to be considered by the committee. The nominating and corporate governance committee does not assign specific weights to particular criteria that the nominating and corporate governance committee reviews and no particular criterion is a prerequisite for the consideration of any prospective nominee. We believe that the backgrounds and qualifications of our directors, considered as a group, should provide a composite and diverse mix of experience, knowledge, and abilities that will allow the board of directors to fulfill its responsibilities.

Stockholders may recommend individuals to the nominating and corporate governance committee for consideration as potential director candidates by submitting the individuals’ name, together with appropriate biographical information and background materials and a statement as to whether the stockholder or group of stockholders making the recommendation has beneficially owned more than 5% of our common stock for at least one year as of the date such recommendation is made, to the Nominating and Corporate Governance Committee, c/o Secretary, Idera Pharmaceuticals, Inc., 505 Eagleview Blvd., Suite 212, Exton, PA 19341. Assuming that appropriate biographical and background material has been provided on a timely basis, the nominating and corporate governance committee will evaluate stockholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates provided by other sources. If the board of directors determines to nominate a stockholder-recommended candidate and recommends his or her election, then his or her name will be included in our proxy card for the next annual meeting.

Stockholders also have the right under our bylaws to nominate director candidates directly, without any action or recommendation on the part of the nominating and corporate governance committee or the board of directors, by following the procedures set forth in our bylaws, including advance notice requirements. Candidates nominated by stockholders in accordance with the procedures set forth in our bylaws will not be included in our proxy card for the next annual meeting. See “Information about the 2021 annual meeting—

Our currently-serving executive officers and their respective ages and positions are described below. Our executive officers serve until they resign or the board terminates their position.

The following table sets forth, as of March 31, 2021 (except as otherwise indicated below), information we know about the beneficial ownership of our common stock by:

We have determined beneficial ownership in accordance with the rules of the SEC, and the information in the table below is not necessarily indicative of beneficial ownership for any other purpose. The SEC has defined “beneficial” ownership of a security to mean the possession, directly or indirectly, of voting power and/or investment power. In computing the percentage ownership of each person, shares of common stock subject to options, warrants, or rights held by that person that are currently exercisable, or exercisable within 60 days of March 31, 2021, are deemed to be outstanding and beneficially owned by that person. These shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person.

Our general executive compensation philosophy has been established by our compensation committee, which acts pursuant to authority delegated to it by our board and as set forth its charter. Our compensation committee is comprised solely of independent directors as defined by applicable rules and regulations of Nasdaq and the SEC. See “Board Committees—Compensation Committee” for further detail regarding the composition, independence, and responsibilities of our compensation committee. Our executive compensation program is designed to achieve the following broad goals:

Our compensation committee analyzed whether the engagement of Pearl Meyer as our compensation consultant raised any conflict of interest, taking into consideration the following factors: (a) the provision of other services to us by Pearl Meyer; (b) the amount of fees received from us by Pearl Meyer, as a percentage of the total revenue of Pearl Meyer; (c) Pearl Meyer’s policies and procedures that are designed to prevent conflicts of interest; (d) any business or personal relationship with Pearl Meyer or the individual advisors employed by Pearl Meyer and a member of the compensation committee or any executive officer; and (e) any shares of our stock owned by Pearl Meyer or the individual advisors employed by Pearl Meyer. Our compensation committee determined, based on its analysis of the above factors, that the work of Pearl Meyer and the individual compensation advisors employed by Pearl Meyer as compensation consultants did not create any conflict of interest. Accordingly, the compensation committee determined that Pearl Meyer is independent. Going forward, the compensation committee intends to assess the independence of any of our compensation advisers by reference to the foregoing factors, consistent with applicable rules and regulations of Nasdaq and the SEC.

In making compensation decisions, our compensation committee reviewed competitive market compensation data compiled by Pearl Meyer. As part of its engagement, Pearl Meyer worked with the compensation committee in the fourth quarter of 2019 to create a peer group of publicly traded companies to be used in connection with our 2020 compensation decisions, including stock options granted during 2020, fiscal year 2020 salary adjustments, and fiscal year 2020 target bonus percentages. In selecting this peer group, the compensation committee and Pearl Meyer generally targeted mid- to late-development stage companies in the pharmaceutical and biotechnology sectors that generally met the following screening criteria:

The compensation committee also typically considers the challenges involved in hiring and retaining executive talent in our industry and region. In assessing the NEO’s performance, the compensation committee considers his or her role in achieving the annual corporate goals, as well as, in the case of our NEOs other than our chief executive officer, the performance evaluation prepared by our chief executive officer with respect to such NEO. The chief executive officer’s evaluation provides the compensation committee insight as to whether each individual NEO’s performance was generally consistent with our expectations.

As part of our 2019 annual performance and compensation review, the compensation committee approved annual base salaries for our executive officers for 2020. In setting these annual base salaries, the compensation committee reviewed the 2019 market compensation data presented by Pearl Meyer. The compensation committee approved the following base salary amounts:

The annual cash incentive award provides an opportunity for additional compensation to NEOs if pre-established annual performance goals are attained. The compensation committee generally links cash awards to the achievement of the annual corporate goals, including unexpected corporate performance outside of the corporate goals and individual performance. The amount of the bonus paid, if any, varies among the NEOs depending on individual performance, individual contribution to the achievement of our annual corporate goals, and corporate performance generally and the compensation committee may exercise discretion in its determinations. The annual cash incentive award targets are based on a target percentage of each NEO’s salary. In determining the target bonus percentages for each of our NEOs, the compensation committee concluded that the target bonus percentages should be competitive with the 50th percentile of the market compensation data and that the target bonus percentage for each NEO, with the exception of our chief executive officer, be the same. The target bonus was established by the compensation committee for each NEO at the time of hire, with the exception of Mr. Fletcher, whose target bonus was adjusted in December 2015, and Mr. Kirby, whose target bonus was adjusted concurrent with his promotion to Chief

We are a party to an Employment Offer Letter, dated as of August 20, 2018, with Mr. Lim, our Senior Vice President, General Counsel, and Secretary (the “Lim Employment Agreement”). Under the terms of the Lim Employment Agreement, Mr. Lim is entitled to receive an annual base salary of $330,000 or such higher amount as our compensation committee or our board may determine. In addition, under the Lim Employment Agreement, Mr. Lim is eligible to receive an annual bonus of 40% of his base salary, subject to adjustment, based on the achievement of both individual and Company performance objectives.

We are a party to an Employment Offer Letter, dated as of June 26, 2019, with Dr. Tarka, our Senior Vice President and Chief Medical Officer (the “Tarka Employment Agreement”). Under the terms of the Tarka Employment Agreement, Dr. Tarka is entitled to receive an annual base salary of $375,000 or such higher amount as our compensation committee or our board may determine. In addition, under the Tarka Employment Agreement, Dr. Tarka is eligible to receive an annual bonus of 40% of her base salary, subject to adjustment, based on the achievement of both individual and Company performance objectives.

Dr. Tarka’s severance and change in control benefits are governed by the Form Severance/CIC Agreement.

Mr. Fletcher served as our Senior Vice President, Business Development and Strategic Planning until December 31, 2020. The terms of his employment were set forth in an Employment Offer Letter, dated January 26, 2015 (the “Fletcher Employment Agreement”). Under the terms of the Fletcher Employment Agreement, Mr. Fletcher was entitled to receive an annual base salary of $360,000 or such higher amount as our compensation committee or our board may determine. In addition, under the Fletcher Employment Agreement, Mr. Fletcher was eligible to receive an annual bonus of 35% of his base salary, subject to adjustment, based on the achievement of both individual and Company performance objectives.

In connection with Mr. Fletcher’s retirement as our Senior Vice President, Business Development and Strategic Planning, on December 29, 2020, we entered into a consulting services agreement (the “Fletcher Consulting Agreement”) with Mr. Fletcher. The Fletcher Consulting Agreement terminates one year following the effective date and provides for aggregate payments to Mr. Fletcher of up to $180,000, to be paid in equal monthly installments over the one-year term of the Fletcher Consulting Agreement. The Fletcher Consulting Agreement also includes confidentiality and non-solicitation restrictions.

In March 2017, the board approved a form of Indemnification Agreement (the “Form Indemnification Agreement”) to be entered into between the Company and each of our officers. Each of Messrs. Milano, Kirby, Fletcher, and Lim and Dr. Tarka entered into the Form Indemnification Agreement with the Company. In general, the Form Indemnification Agreements provide that the Company will indemnify the NEO to the fullest extent permitted by law for claims arising in his or her capacity as an officer of the Company or in connection with his or her service at our request for another corporation or entity. The Form Indemnification Agreements also provide for procedures that will apply in the event that an officer makes a claim for indemnification and establish certain presumptions that are favorable to the officer.

In April 2015, ahead of any such requirement in the Dodd-Frank Wall Street Reform and Consumer Protection Act, our compensation committee adopted a formal clawback policy, which applies in the event we are required to prepare an accounting restatement due to any material noncompliance with any financial reporting requirement under the U.S. federal securities laws. This policy requires us to use reasonable efforts to recover from any of our current or former executive officers who receive incentive-based compensation (including stock options and RSUs awarded as compensation) during the three-year period