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firms are permitted to vote your shares even if you have not given voting instructions. "Broker non-votes" occur when a bank or brokerage firm submits a proxy for shares but does not indicate a vote for a particular proposal because the bank or brokerage firm either does not have authority to vote on that proposal and has not received voting instructions from the beneficial owner, or has discretionary authority but chooses not to exercise it. The effect of broker non-votes is discussed below in the answer to the question "What vote is required to approve each matter and how will votes be counted?".

Even if your shares are held in street name, you are welcome to attend the special2020 annual meeting. If your shares are held in street name, you may not vote your shares in person at the special2020 annual meeting unless you obtain a proxy, executed in your favor, from the holder of record (i.e., your bank or brokerage firm). If you hold your shares in street name and wish to vote in person, please contact your bank or brokerage firm before the special2020 annual meeting to obtain the necessary proxy from the holder of record.

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        If the beneficial owner does not provide voting instructions, banks and brokerage firms cannot vote the shares with respect to "non-routine" matters, but can vote the shares with respect to "routine" matters. "Broker non-votes" occur when a beneficial owner of shares held in street name fails to provide instructions to the bank or brokerage firm holding the shares as to how to vote on matters deemed "non-routine." We believe Proposal Three (the approval of an amendment to Restated Certificate of Incorporation to increase the authorized number of shares of common stock) and Proposal Four (the ratification of the selection of our independent registered public accounting firm) are "routine" matters and, as a result, we do not expect there to be any broker non-votes. Proposal One (the election of directors) and Proposal Two (the approval of, by non-binding vote, the compensation of the Company's named executive officers for 2019) are "non-routine" matters, and banks and brokerage firms cannot vote your shares on such proposals if you have not given voting instructions.

        As long as one of the matters is deemed to be a "routine" matter, proxies reflecting broker non-votes (if any) will be counted towards the quorum requirement.

        Whether a matter is "routine" or not is ultimately up to the New York Stock Exchange, and the New York Stock Exchange may make a determination that is different from what we believe to be the case. If that occurs, brokers may be able to vote your shares on matters we believe to be not routine, or not vote your shares on matters that we believe to be routine. Accordingly, we strongly encourage you to submit your proxy and exercise your right to vote as a stockholder to ensure that your shares are voted in the manner in which you want them to be voted.

How may I change or revoke my vote?

        If you are a stockholder of record, even if you complete and return a proxy card or vote by telephone or over the internet, you may change or revoke your vote at any time before your proxy is exercised by taking one of the following actions:

•

send written notice to our Secretary, Mark J. Casey,Bryant Lim, at our address above, stating that you wish to revoke your vote;



•

deliver to us another signed proxy card with a later date or vote by telephone or over the internet at a later date; or



•

attend the special2020 annual meeting, notify our Secretary that you are present and then vote by ballot.

        If you own shares in street name, your bank or brokerage firm should provide you with instructions for changing or revoking your vote.

What constitutes a quorum?

        In order for business to be conducted at the special2020 annual meeting, a quorum must be present. A quorum consists of the holders of a majority of the shares of our common stock issued, outstanding and entitled to vote at the special2020 annual meeting.

        Shares of common stock present in person or represented by proxy (including broker non-votes and shares that are abstained or withheld or with respect to which no voting instructions are provided for one or more of the matters to be voted upon) will be counted for the purpose of determining whether a quorum exists.

        If a quorum is not present, the special2020 annual meeting will be adjourned until a quorum is obtained.

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What vote is required to approve each matter and how will votes be counted?

        The table below sets forth the vote required for each matter being submitted to our stockholders at the special2020 annual meeting to be approved and the effect that abstentions, withheld votes and broker non-votes will have on

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the outcome of voting on each proposal that is being submitted to our stockholders for approval at the special meeting.broker:

        Each share of common stock will be counted as one vote.

        Proposal No. 2 is subject to approval by our stockholders of the amendment to our Restated Certificate of Incorporation, as amended, effecting the reverse stock split as set forth in Proposal No. 1 and, therefore, will not be implemented unless Proposal No. 1 is approved and such reverse stock split is implemented.

How does the board of directors recommend that I vote?

        Our board of directors recommends that you vote as follows:

•

FOR each of the director nominees to our board of directors (Proposal One); and



•

FOR Proposal OneTwo, Proposal Three, and Proposal Two.Four.

        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 Four, is also advisory. Our board will carefully consider the outcome of each of these votes.

Will any other business be conducted at the special2020 annual meeting of stockholders?

        Our board of directors does not know of any other business to be conducted or matters to be voted upon at the special2020 annual meeting. If any other matter properly comes before the special2020 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 special2020 annual meeting.

Who is making and paying for the solicitation of proxies and how is it made?

        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

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proxies by telephone, facsimile, email, personal interviews and other means. We may retain ahave engaged MacKenzie Partners, Inc. to serve as our proxy solicitation firmsolicitor to assist indistribute our proxy materials and solicit proxies, and the solicitation of proxies in connection with the special meeting. In that event, we will pay such firm customary fees, which we expect would be approximately $10,000, plus expenses.estimated fee for these services is $14,000. 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.

How and when may I submit a proposal for the 20182021 annual meeting of stockholders?

        If you are interested in submitting a proposal for inclusion in the proxy statement and proxy card for our 20182021 annual meeting of stockholders, or the 20182021 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, 167 Sidney Street, Cambridge, Massachusetts 02139,505 Eagleview Blvd., Suite 212, Exton, Pennsylvania 19341, Attention: Secretary, no later than January 8, 2018. TheDecember [4], 2020. SEC rules of the Securities and Exchange Commission, or the SEC, set standards for the types of stockholder proposals and the information that must be provided by the stockholder making the request.

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        If you wish to present a proposal at the 20182021 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" on page 15) at least 60 days, but not more than 90 days, prior to the date of the 20182021 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 no later than the close of business on the tenth day following the date on which the notice of the annual meeting was mailed or such public disclosure was made, whichever occurs first. If a stockholder who wished to present a proposal fails to notify us by this date, the proxies that management solicits for that meeting will have discretionary authority to vote on the stockholder's proposal if it is otherwise properly brought before that meeting. If a stockholder makes timely notification, the proxies may still exercise discretionary authority to vote on stockholder proposals under circumstances consistent with the SEC's rules.

HowAre annual meeting materials householded?

        Some banks and whenbrokerage firms may be participating in the practice of "householding" proxy statements and annual reports. This means that the banks and brokerage firms send only one copy of this proxy statement and the accompanying 2019 Annual Report to multiple stockholders in the same household. Upon request, we will promptly deliver separate copies of this proxy statement and our annual report to stockholders. To make such a request, please call Investor Relations at (877) 888-6550, write to Investor Relations, 505 Eagleview Blvd., Suite 212, Exton, Pennsylvania 19341 or email Investor Relations at ir@iderapharma.com. To receive separate copies of our annual report to stockholders and proxy statement in the future, or to receive only one copy for the household, please contact us or your bank or brokerage firm.

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PROPOSAL ONE

ELECTION OF DIRECTORS

General Information

        Our board of directors is divided into three classes and currently consists of three Class I submitdirectors: Vincent J. Milano, Cristina Csimma, PharmD, MHP, and Michael R. Dougherty; three Class II directors: Howard Pien, James A. Geraghty and Maxine Gowen, Ph.D.; and two Class III directors: Mark Goldberg, M.D. and Carol A. Schafer. Each member of a class is elected for a three-year term, with the terms staggered so that approximately one-third of our directors stand for election at each annual meeting of stockholders. The Class I, Class II and Class III directors were elected to serve until the annual meeting of stockholders to be held in 2020, 2021 and 2022, respectively, and until their respective successors are elected and qualified.

        Our board of directors, on the recommendation of the members of our nominating and corporate governance committee, has nominated Dr. Csimma and Messrs. Dougherty and Milano for election as Class I directors at the 2020 annual meeting. At the 2020 annual meeting, stockholders will be asked to consider the election of Dr. Csimma and Messrs. Dougherty and Milano.

        The persons named in the enclosed proxy card will vote to elect Dr. Csimma and Messrs. Dougherty and Milano to our board of directors unless you indicate that you withhold authority to vote for the election of any or all nominees. You may not vote for more than three directors. Each Class I director will be elected to hold office until our 2023 annual meeting of stockholders and until his or her successor is elected and qualified or until his or her earlier resignation, death or removal. Each of the nominees is presently a director and each has indicated a willingness to serve as a director, if elected. If a nominee becomes unable or unwilling to serve, however, the persons acting under the proxy may vote for substitute nominees selected by the board of directors.

Information about our Directors

        Set forth below is information about each member of our board of directors, including (a) the year in which each director first became a director, (b) their age as of the 2020 annual meeting, (c) their positions and offices with our Company, (d) their principal occupations and business experience during at least the past five years and (e) the names of other public companies for which they currently serve, or have served within the past five years, as a director. We have also included information about each director's specific experience, qualifications, attributes or skills that led our board of directors to conclude that such individual should serve as one of our directors. We also believe that all of our directors have a reputation for integrity, honesty and adherence to high ethical standards. They each have demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to our Company and our board of directors.

Recommendation of the Board of Directors?Directors

Our board of directors unanimously recommends that the stockholders vote FOR the election of Dr. Csimma and Messrs. Dougherty and Milano as Class I directors.

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Class I Directors—Terms to Expire in 2020

Cristina Csimma, PharmD, MHP
Director since 2019

        Dr. Csimma, age 61, currently serves as a board director and chair of the Nominating and Corporate Governance Committee of Seneca Biopharma, Inc. (previously, Neuralstem Inc. (CUR)), 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 a board director of T1D Exchange (non-profit-Type 1 Diabetes), a position she has held since December 2018. She 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, and the TREAT-NMD Advisory Committee for Therapeutics (TACT) since 2009. 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 NIH Blueprint Neurotherapeutics Network External Oversight Committee from 2014 to 2018, the Executive Oversight Board to the National Institutes of Health (NIH) NeuroNext Network from 2013 until 2017, 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.

Michael R. Dougherty
Director since 2019

        Mr. Dougherty, age 62, was executive chairman of Celator Pharmaceuticals, Inc., a biopharmaceutical company, from August 2015 until its acquisition by Jazz Pharmaceuticals in 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, including chief executive officer of Kalidex Pharmaceuticals, Inc.; president and chief executive officer of Adolor Corporation; president and chief operating officer of Genomics Collaborative, Inc.; president and chief executive officer of Genaera Corporation, and chief financial officer at Centocor, Inc. He currently serves on the board of directors of Marinus Pharmaceuticals, Inc. and Trevena, Inc., both publicly traded life sciences organizations. Mr. Dougherty has also served on 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 J. Milano
Director since 2014

        Vincent Milano, age 56, 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 Incorporated, a pharmaceutical company that was acquired by Shire Plc in January 2014, from March 2008 to January 2014, as its vice president, chief financial

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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 Aclaris Therapeutics, Inc., a publicly traded company, and privately held VenatoRx Pharmaceuticals, Inc. Mr. Milano previously served as a director of Spark Therapeutics, Inc. and Vanda Pharmaceuticals Inc. from 2014 to 2019 and 2010 to 2019, respectively. Mr. Milano holds a Bachelor of Science degree in Accounting from Rider College. We believe Mr. Milano's qualifications to sit on our board of directors include his knowledge of our company as our President and Chief Executive Officer, knowledge of our industry, including over 20 years of experience serving in a variety of roles of increasing responsibility in the finance department, corporate administration and operations of a multinational biopharmaceutical company, and understanding of pharmaceutical research and development, sales and marketing, strategy, and operations in both the United States and overseas. He also has corporate governance experience through service on other public company boards.

Class II Directors—Terms to Expire in 2021

James A. Geraghty
Director since 2013

        Mr. Geraghty, age 65, has served as chairman of our board of directors since July 2013. Mr. Geraghty is an industry leader with over 35 years of strategic and leadership experience, including more than 25 years as a senior member of executive teams at biotechnology companies developing and commercializing innovative therapies. From May 2013 to October 2016, Mr. Geraghty was an Entrepreneur in Residence at Third Rock Ventures, a leading biotech venture fund. From April 2011 to December 2012, he served as a Senior Vice President of Sanofi, a global healthcare company. Prior to that, he served in various senior management roles at Genzyme Corporation, a biotechnology company, from 1992 to April 2011, including as Senior Vice President, International Development and President of Genzyme Europe. Mr. Geraghty currently serves as chairman of the board of Orchard Therapeutics PLC and Pieris Pharmaceuticals, Inc., each a publicly traded company, and as a member of the board of Voyager Therapeutics and Fulcrum Therapeutics, each a publicly traded company. He also previously served as a director of bluebird bio, Inc. and GTC Biotherapeutics, Inc. We believe that Mr. Geraghty's qualifications to sit on our board of directors include his public company board and management experience and his broad and deep knowledge of the industry in which we operate.

Maxine Gowen, Ph.D.
Director since 2016

        Dr. Gowen, age 62, has served as the chief executive officer and a board director of TamuroBio Inc., a privately held drug development company, since August 2019. She was the founding President and CEO of Trevena, Inc., a publicly traded biopharmaceutical company, from November 2007 until her retirement in October 2018, and remains a member of its board of directors. Prior to joining Trevena, Dr. Gowen was Senior Vice President for the Center of Excellence for External Drug Discovery at GlaxoSmithKline plc, or GSK, where she held a variety of leadership positions during her tenure of 15 years. Before GSK, Dr. Gowen was Senior Lecturer and Head, Bone Cell Biology Group, Department of Bone and Joint Medicine, of the University of Bath, U.K. Dr. Gowen has served as a director of Akebia Therapeutics, Inc. since July 2014, and Aclaris Therapeutics, Inc. since July 2019, both publicly traded companies. From 2008 until 2012, Dr. Gowen served as a director of Human Genome Sciences, Inc., a publicly traded company. She received her Ph.D. from the University of Sheffield, U.K., an M.B.A. with academic honors from The Wharton School of the University of Pennsylvania, and a B.Sc. with Honors in Biochemistry from the University of Bristol, U.K. We believe

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that Dr. Gowen's qualifications to sit on our board of directors include her significant public company management and board experience and knowledge of our industry.

Howard Pien
Director since September 2018

        Mr. Pien, age 62, has worked in the pharmaceutical and biotechnology industries for over 30 years. He currently serves as non-executive chairman of Indivior Plc, a publicly traded global pharmaceutical company, since 2014. He was previously non-executive chairman of Juno Therapeutics, Inc., a development stage company focused on immunotherapy aimed to cure cancer, from 2014 until its acquisition by Celgene Corp. in 2018. He was also previously a director of Vanda Pharmaceuticals Inc., a commercial-stage public company specializing in CNS (three years as chairman), from 2007 to 2016; ImmunoGen, Inc., a public biotechnology company, from 2009 to 2018; Sage Therapeutics, Inc., a development stage public company specializing in CNS, from 2014 to 2017; and an advisor to the Life Sciences Practice of Warburg Pincus. From 2007 to 2009, Mr. Pien was the chairman and chief executive officer of Medarex, Inc., a public biotechnology company, until it was acquired by Bristol-Myers Squibb Co. From 2003 to 2006, he was the chairman and chief executive officer of Chiron Corporation, a public biotechnology company, which was acquired by Novartis AG. Mr. Pien's additional prior board directorships include Talon International, Inc., Arresto Biosciences, Inc., Ikaria, Inc., ImmunoGen, Inc. and ViroPharma Incorporated (where he was lead independent director)—all biopharmaceutical companies that were acquired in strategic transactions. Between 1991 and 2003, he held various executive positions at GlaxoSmithKline plc (GSK) and SmithKline Beecham, as Presidents of US, International, and Pharmaceuticals. Prior to GSK, Mr. Pien worked for Abbott Labs for six years and Merck & Co., Inc. for five years. Mr. Pien holds a BS in engineering from MIT and an MBA from Carnegie-Mellon University. We believe that Mr. Pien's qualifications to sit on our board of directors include Mr. Pien's extensive experience as a chief executive officer in the pharmaceutical industry, including an immuno-oncology company, and his expertise in corporate governance matters.

Class III Directors—Terms to Expire in 2022

Mark Goldberg, M.D.
Director since 2014

        Dr. Goldberg, age 65, has served as a member of the board of directors of ImmunoGen, Inc. since November 2011, a member of the board of directors of GlycoMimetics, Inc. since July 2014, and as a member of the board of directors of Blueprint Medicines since June 2015. In addition, he is a member of the board of directors of the American Cancer Society, a non-profit organization. Dr. Goldberg previously served on the board of directors of Audentes Therapeutics, Inc. from December 2017 until January 2020 and aTyr Pharma from April 2015 until December 2017. Dr. Goldberg served as advisor and medical and regulatory strategist for Synageva BioPharma Corp., a biopharmaceutical company, from October 2014 until June 2015. Prior to that, he served as the Executive Vice President for Medical and Regulatory Strategy of Synageva from January 2014 to October 2014 and as the Senior Vice President of Medical and Regulatory Affairs of Synageva from September 2011 to January 2014. Dr. Goldberg served in a variety of senior management positions at Genzyme Corporation from 1996 to July 2011, including most recently as Senior Vice President for Clinical Development and Therapeutic Group Head for Oncology and Personalized Genetic Health from 2009 to July 2011. Prior to working at Genzyme Corporation, he was a full-time staff physician at Brigham and Women's Hospital and Dana Farber Cancer Institute, where he still holds appointments. He has also been an Associate Professor of Medicine at Harvard Medical School since 1996. Dr. Goldberg is a board-certified medical oncologist and hematologist and has more than 50 published papers. Dr. Goldberg holds an A.B. from Harvard College and an M.D. from Harvard Medical School. We believe that

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Dr. Goldberg's qualifications to sit on our board of directors include his extensive scientific and medical background, public company board experience and extensive experience in the management and operations of pharmaceutical companies.

Carol A. Schafer
Director since December 2018

        Ms. Schafer, age 56, has served on the board of directors, where she serves on the audit committee and nominating and corporate governance committee of Five Prime Therapeutics, Inc., a publicly traded company, since May 2019. Additionally, Ms. Schafer has served on the board of directors and audit committee of Repare Therapeutics, Inc., a private biotechnology company, and as a non-fiduciary board member of OneGoal NY, a non-profit entity, since March 2019. She also currently serves as managing partner at Hyphen Advisors, LLC, a firm that provides advisory, consulting and board services to public and private companies and boards of directors on topics such as financing strategy and execution, financial planning and analysis, investor access and messaging, and strategic initiatives. Ms. Schafer has more than 25 years of experience in investment banking and equity capital markets, as well as in corporate finance and business development in the biopharmaceutical sector, with substantial experience financing and facilitating investor access for public and private healthcare companies. Ms. Schafer most recently served as Vice Chair, Equity Capital Markets at Wells Fargo Securities. Prior to Wells Fargo, Ms. Schafer served as Vice President of Finance and Business Development at Lexicon Pharmaceuticals. Earlier in her career, Ms. Schafer served as an Equity Capital Markets Sector Head in her role as Managing Director at J.P. Morgan. Ms. Schafer received a B.A. from Boston College and an M.B.A from New York University. We believe that Ms. Schafer's qualifications to sit on our board of directors include her extensive financial background and her many years of experience providing investment banking, equity capital markets and strategic support to companies within the healthcare sector.

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DIRECTOR COMPENSATION

        We use a combination of cash and equity-based compensation to attract and retain candidates to serve on our board of directors. We do not compensate directors who are also our employees for their service on our board of directors. As a result, Mr. Milano does not receive any compensation for his service on our board of directors.

        We generally review our director compensation program every two years with the advice of an independent compensation consultant. In November 2018, we modified our director compensation program, effective January 1, 2019, to increase the cash compensation for service on the board of directors from $35,000 to $40,000. On June 4, 2019, we modified our Scientific Advisory Committee chairperson compensation to $8,000. With the exception of the foregoing cash compensation increase, no other changes were made to our director compensation program.

        Under our director compensation program, we pay our non-employee directors retainers in cash. Each director receives a cash retainer for service on the board of directors and for service on each committee on which the director is a member. The chairperson of each committee receives higher retainers for such service. These fees are paid quarterly in arrears. The fees paid to non-employee directors for service on the board of directors and for service on each committee of the board of directors on which the director was a member during 2019 were as follows:

        Our director compensation program includes a stock-for-fees policy, under which directors have the right to elect to receive common stock in lieu of cash fees. These shares of common stock are issued under our 2013 Stock Incentive Plan. The number of shares issued to participating directors is determined on a quarterly basis by dividing the cash fees to be paid through the issuance of common stock by the fair market value of our common stock, which is the closing price of our common stock, on the first business day of the quarter following the quarter in which the fees are earned. In 2019, several of our directors elected to receive shares of our common stock in lieu of cash fees as set forth in the footnotes to the Director Compensation table below.

        Under our director compensation program, we also reimburse our directors for travel and other related expenses for attendance at meetings.

        Under our current director compensation program, upon their initial election to the board of directors, new non-employee directors receive an initial option grant to purchase 23,000 shares of our common stock, and all non-employee directors, other than the chairperson, receive an annual option grant to purchase 11,500 shares of our common stock. The chairperson receives an annual option grant for 14,500 shares of our common stock. The annual grants are made on the date of our annual meeting of stockholders and fully vest one year from that date of grant. The initial options granted to our non-employee directors vest with respect to one-third of the underlying shares on the first anniversary of the date of grant and the balance of the underlying shares vest in eight equal quarterly installments following the first anniversary of the date of grant, subject to continued service as a director, and are granted under our 2013 Stock Incentive Plan. These options are granted with exercise prices equal to the fair market value of our common stock, which is the closing price of our common stock, on the date of grant and will become immediately exercisable in full if there is a change in control of our Company.

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        Under our retirement policy for non-employee members of the board, if a non-employee director is deemed to retire, then:

•

all outstanding options held by such director will automatically accelerate and vest in full; and



•

the period during which such director may exercise the options will be extended to the expiration of the option under the plan.

        Under the policy, a non-employee director will be deemed to have retired if:

•

the director resigns from the board or determines not to stand for re-election or is not nominated for re-election at a meeting of our stockholders and has served as a director for more than 10 years; or



•

the director does not stand for re-election or is not nominated for re-election due to the fact that he or she is or will be older than 75 at the end of such director's term.

        The following table sets forth a summary of the compensation we paid to our non-employee directors who served on our board in 2019.

DIRECTOR COMPENSATION FOR 2019

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CORPORATE GOVERNANCE INFORMATION

Board of Directors

        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 four times during 2019, including regular, special and telephonic meetings. Each director who served as a director during 2019 attended at least 75% of the total number of board meetings and committee meetings for the committees on which he or she served during 2019.

        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 attended the 2019 annual meeting of stockholders in person.

Board Leadership Structure

        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 at that time. Currently, Mr. Geraghty serves as chairman of our board of directors and Mr. Milano serves as chief executive officer. 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.

Board of Directors' Role in Risk Oversight

        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

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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 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.

Board Committees

        Our board of directors has established three standing committees: audit, compensation and nominating and corporate governance. Each of our audit, compensation and nominating and corporate governance committees operates under a charter that has been approved by our board of directors. Our board of directors has also adopted corporate governance guidelines to assist our board of directors in the exercise of its duties and responsibilities. Current copies of the charters for the audit, compensation and nominating and corporate governance committees and the corporate governance guidelines are posted on our website, www.iderapharma.com, and can be accessed by clicking "Investors" and "Corporate Governance."

Audit Committee

        Our audit committee's purpose is to assist the board of directors' oversight of our accounting and financial reporting processes and the audits of our financial statements. Our audit committee's responsibilities include:

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appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;



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overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of certain reports from such accounting firm;



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reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures;



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monitoring our internal control over financial reporting, disclosure controls and procedures and code of business conduct and ethics;



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discussing with management and our independent auditor about significant risks or exposures;



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establishing procedures for the receipt and retention of accounting related complaints and concerns;



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reviewing and approving related party transactions;



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meeting independently with our independent registered public accounting firm and management; and



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preparing the audit committee report required by SEC rules.

        The current members of our audit committee are Ms. Schafer (Chair), Mr. Dougherty and Dr. Goldberg. Our board of directors has determined that Ms. Schafer is an "audit committee financial expert" within the meaning of SEC rules and regulations. Each member of the audit committee is independent as defined under applicable rules of the Nasdaq, including the independence requirements contemplated by Rule 10A-3 under the Exchange Act. During 2019, our audit committee held four meetings in person or by teleconference.

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Compensation Committee

        Our compensation committee's purpose is to oversee the discharge of the responsibilities of the board of directors relating to compensation of the Company's executive officers, employees, and board members. Our compensation committee's responsibilities include:

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approving the Company's long-term strategy of compensation, including the consideration of base compensation, short-term incentive and long-term incentive targets,



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reviewing and approving the compensation of the Company's chief executive officer and the other executive officers;



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overseeing and administering our cash and equity incentive plans;



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reviewing and making recommendations to the board of directors with respect to director compensation;



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overseeing the evaluation of the Company's senior executives;



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reviewing and discussing annually with management the compensation discussion and analysis required by the SEC rules and included in this proxy statement; and



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preparing the compensation committee report required by SEC rules.

        The current members of our compensation committee are Dr. Gowen (Chair), Dr. Csimma, and Mr. Pien. During 2019, the compensation committee held six meetings in person or by teleconference. 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."

Nominating and Corporate Governance Committee

        Our nominating and corporate governance committee's purpose is to identify and recommend to the board of directors persons to be nominated for election as directors, develop and recommend corporate governance principals, and oversee the evaluation of the board of directors. Our nominating and corporate governance committee's responsibilities include:

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reviewing with the board of directors the requisite skills and criteria for new board members, as well as the composition of the board as a whole;



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adopting and periodically reviewing procedures regarding director candidates proposed by stockholders;



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recommending to the board the directors to be appointed to each committee of the board;



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reviewing and assessing the adequacy of the corporate governance guidelines;



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determining the nature of the self-evaluation of the board, supervising the conduct of the evaluation, and preparing the assessment of the board's performance; and



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overseeing the Company's succession planning, which includes transitional leadership in the event of an unplanned vacancy.

        The current members of our nominating and corporate governance committee are Messrs. Geraghty (Chair), Pien, and Dougherty. During 2019, the nominating and corporate governance committee held two meetings in person or by teleconference.

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        The processes and procedures followed by our nominating and corporate governance committee in identifying and evaluating director candidates are described below under the heading "Director Nomination Process."

Director Independence

        Our securities are listed on the Nasdaq Capital Market and we use the standards of "independence" prescribed by rules set forth by Nasdaq. Under Nasdaq rules, a majority of a listed company's board of directors must be comprised of independent directors. In addition, Nasdaq rules require that, subject to specified exceptions, each member of a listed company's audit committee and compensation committee be independent and satisfy additional independence criteria set forth in Rules 10A-3 and 10C-1, respectively, under the Exchange Act. Under the applicable Nasdaq rules, a director will only qualify as an "independent director" if, in the opinion of our board of directors, that person does not have a relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that Dr. Csimma, Mr. Dougherty, Mr. Geraghty, Dr. Goldberg, Dr. Gowen, Mr. Pien and Ms. Schafer and all of the members of each of the audit, compensation and nominating and corporate governance committees are independent as defined under applicable rules of the Nasdaq, and, in the case of all members of the audit and compensation committees, the independence requirements contemplated by Rule 10A-3 and Rule 10C-1 under the Exchange Act.

Director Nomination Process

        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:

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business acumen;



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knowledge of our business and industry;



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age;



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experience;



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diligence;



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conflicts of interest;



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ability to act in the interests of all stockholders; and



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in the case of the renomination of existing directors, performance on our board of directors and on any committee of which the director was a member.

        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 committee

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has not adopted any formal or informal diversity policy and treats diversity as one of the criteria to be considered by the committee. The committee does not assign specific weights to particular criteria that the 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.

Stockholder Nominees

        Stockholders may recommend individuals to the nominating and corporate governance committee for consideration as potential director candidates by submitting the individuals' names,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., 167 Sidney Street, Cambridge, Massachusetts 02139.505 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 submitted by others. 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 special2020 annual meeting—How and when may I submit a proposal for the 20182021 annual meeting of stockholders?" for more information about these procedures.procedures and the deadline for submitting director nominations.

Are stockholder meeting materials householded?Communicating with our Board of Directors

        Some banksShareholders and brokerage firmsother interested parties may be participating incommunicate directly with the practice of "householding" proxy statements. This means that the banks and brokerage firms send only one copy of this proxy statement to multiple stockholders in the same household. Upon request, we will promptly deliver separate copies of this proxy statement. To make such a request, please call Investor Relations at 1 (877) 888-6550, write to Investor Relations, 167 Sidney Street, Cambridge, Massachusetts 02139 or email Investor Relations at ir@iderapharma.com. To receive separate copies of our proxy statement in the future, or to receive only one copy for the household, please contact us or your bank or brokerage firm.

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PROPOSAL ONE

APPROVAL OF AN AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED, TO EFFECT A REVERSE STOCK SPLIT OF OUR ISSUED AND OUTSTANDING COMMON STOCK BY A WHOLE NUMBER RATIO OF NOT LESS THAN 1-FOR-4 AND NOT MORE THAN 1-FOR-8, SUCH RATIO AND THE IMPLEMENTATION AND TIMING OF SUCH REVERSE STOCK SPLIT TO BE DETERMINED IN THE DISCRETION OF OUR BOARD OF DIRECTORS AT ANY TIME PRIOR TO OUR 2018 ANNUAL MEETING OF STOCKHOLDERS, AND, IN CONNECTION THEREWITH, TO DECREASE THE NUMBER OF AUTHORIZED SHARES OF OUR COMMON STOCK ON A BASIS PROPORTIONAL TO THE REVERSE STOCK SPLIT RATIO.

General

        We are asking stockholders to approve a proposal to amend our Restated Certificate of Incorporation, as amended, to effect a reverse stock split of our issued and outstanding common stock by a whole number ratio of not less than 1-for-4 and not more than 1-for-8, such ratio and the implementation and timing of such reverse stock split to be determined in the discretion of our board of directors and, in connection therewith, to decrease the number of authorized shares of our common stock on a basis proportional to the reverse stock split ratio. A reverse stock split would reduce the number of outstanding shares of our common stock, and the holdings of each stockholder, according to the same formula.

        If the proposal is approved, the board's present intention is to effect a reverse stock split of our issued and outstanding common stock by a whole number ratio of not less than 1-for-4 and not more than 1-for-8 prior to our 2018 annual meeting of stockholders. We are requesting authorization to effect the reverse stock split at the board's discretion at any time prior to our 2018 annual meeting of stockholders to provide the board(and with the flexibility to determine the appropriate ratio for, and timing to effect, the reverse stock split based upon our performance and market factors. However, the board reserves its right to elect not to proceed and abandon the reverse stock split if it determines, in its sole discretion, that this proposal is no longer in the best interests of our stockholders.

        We currently have 280,000,000 authorized shares of common stock. As of November 9, 2017, the record date for the special meeting, [                  ] shares of common stock were issued and outstanding. "Authorized" shares represent the number of shares of common stock that we are permitted to issue under our Restated Certificate of Incorporation, as amended. This proposal, if implemented, would reduce both the number of issued and outstanding shares of common stock and the number of authorized shares of common stock by the ratio selected by the board (within the parameters described), and, except for the effect of fractional shares, each stockholder's proportionate ownership interest in our company would be the same immediately before and after the reverse stock split. If Proposal No. 2 is approved and implemented, which is subject to the approval and implementation of this proposal, the number of authorized shares of our common stock would, following the reverse stock split, be doubled.

Reasons for the Reverse Stock Split

        The board is proposing a reverse stock split in order to reduce the number of issued and outstanding shares and to increase the per share trading value of our common stock. The board believes that a reverse stock split is desirable and should be approved by stockholders for a number of reasons, including the reasons described below.

        First, our board believes that a reverse stock split may expand our audience of potential investors by increasing the per share stock price of our common stock. Some institutional investors have internal policies preventing the purchase of low-priced stocks. Similarly, non-solicitation rules at most broker-

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dealers prevent financial advisorsindependent directors, individually or brokers within those firms from soliciting orders in low-priced stocks. In both cases, $5.00 is a price level that is commonly set as the minimum price requirement for such institutions or broker-dealers to purchase common stock. On November [    ], 2017, the last reported sale price of our common stock on the NASDAQ Capital Market was $[            ]. As a result, we believe that an increased per share stock price will enable additional participation in the trading of our common stock. In addition, while there may not be a specific price that defines a low-priced stock, we believe that stocks priced below $5.00 are sometimes viewed with hesitation by some investors and their advisors. Price is frequently used as a proxy for "quality" and low-priced stocks are considered to potentially be of lower investing quality and/or less desirable relative to a company's peers with higher share prices. Additionally, because brokers' commissions on transactions in lower-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current average price per share of our common stock can result in individual stockholders paying transaction costs representing a higher percentage of their total share value than would be the case if the share price were higher. We believe that by implementing the reverse stock split, our common stock will not be viewed as a low-priced stock.

        We also believe that the investors who are unable to or choose not to invest in our company because of our share price may be investors who are more oriented towards fundamentals and have a longer term investment horizon. We believe that a higher share price and lower outstanding share count will increase the perceived quality and appeal of our common stock for investment purposes and may expand our audience of potential investors in general and increase our shareholder base of investors with longer term investment horizons specifically. In accomplishing this goal, we may also reduce share price volatility.

Certain Risks Associated with the Reverse Stock Split

        In evaluating a reverse stock split, ourgroup). Our board of directors also took into consideration certain risks associated with reverse stock splits, includingwill give appropriate attention to written communications that are submitted by stockholders and will respond if and as appropriate. The chairperson of the negative perceptionboard of reverse stock splits held by some investors, analystsdirectors (if an independent director) or the lead independent director, if any, is primarily responsible for monitoring communications from stockholders and for providing copies or summaries to the other stock market participants; the factdirectors, as he or she considers appropriate.

        Communications are forwarded to all directors if they relate to important substantive matters and include suggestions or comments that the stock pricechairperson of some companiesthe board of directors or lead independent director, as the case may be, considers to be important for the directors to know. In general, communications relating to corporate governance and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances and matters that have effected reverse stock splits has subsequently declined backinvolve repetitive or duplicative communications.

        Stockholders who wish to pre-reverse stock split levels; and the risks described below.

There can be no assurance that the total market capitalization of our common stock (the aggregate value of our common stock at the then market price) after the implementation of a reverse stock split will be equal to or greater than the total market capitalization before the reverse stock split or that the per share market price of our common stock following a reverse stock split will increase in proportionsend communications on any topic to the reduction in the numberboard of sharesdirectors should address such communications to Board of our common stock outstanding before the reverse stock split.

        There can be no assurance that the market price per new share of our common stock after a reverse stock split will remain unchanged or increase in proportion to the reduction in the number of shares of our common stock outstanding before the reverse stock split. For example, based on the closing price of our common stock on [                  ], 2017, of $[        ] per share, if the board were to implement the reverse stock split and utilize a ratio of 1-for-6, we cannot assure you that the post-split market price of our common stock would be $[        ] (that is, $[        ] multiplied by 6) per share or greater. The market price of a company's shares may fluctuate and potentially decline after a reverse stock split.

        Accordingly, the total market capitalization of our common stock after a reverse stock split when and if implemented may be lower than the total market capitalization before the reverse stock split. Moreover, in the future, the market price of our common stock following a reverse stock split may not exceed or remain higher than the market price prior to the reverse stock split.Directors, c/o Secretary, Idera Pharmaceuticals, Inc., 505 Eagleview Blvd., Suite 212, Exton, PA 19341.

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        IfEach communication from a reverse stock split is effected,stockholder should include the resulting per-share market price may not attract institutional investors or investment funds and may not satisfy the investing guidelines of such investors and, consequently, the trading liquidity of our common stock may not improve.

        While the board believes that a higher stock price may help generate investor interest, there can be no assurance that a reverse stock split will resultfollowing information in a per-share market price that will attract institutional investors or investment funds or that such share price will satisfy the investing guidelines of institutional investors or investment funds. As a result, the trading liquidity of our common stock may not necessarily improve.

A decline in the market price of our common stock after a reverse stock split is implemented may result in a greater percentage decline than would occur in the absence of a reverse stock split.

        If a reverse stock split is effected and the market price of our common stock declines, the percentage decline may be greater than would occur in the absence of a reverse stock split. The market price of our common stock will, however, also be based upon our performance and other factors, which are unrelatedorder to the number of shares of common stock outstanding.

The reverse stock split may reduce the liquidity and increase the volatility of our stock.

        Following the reverse stock split, the number of our outstanding shares will be reduced by a whole number factor ranging from four to eight, which may lead to reduced trading and a smaller number of market makers for our common stock. Brokerage firms often do not permit stocks trading below $5.00 per sharestockholder status to be sold short, but permit short-selling of shares which are traded at higher prices. Following the reverse stock split,confirmed and to the extent our per-share trading price is consistently above $5.00, investors may short our stock. This may increase the volatility of our stock price.

Principal Effects of this Proposal

        If approved and implemented, the principal effects of this proposal would include the following:provide an address to forward a response if deemed appropriate:

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depending on the ratio forname, mailing address and telephone number of the reverse stock split selected bystockholder sending the board (within the parameters described), each four to eight shares of common stock that you own will be reclassified into one share of common stock, the exact whole number ratio within the four to eight range to be determined by the board;communication;



•

the number of shares of common stock issued and outstanding will be reduced proportionately based on the ratio selectedheld by the board;



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the total number of shares of common stock that we are authorized to issue will be reduced proportionately based on the ratio selected by the board (which total number is subject to further change if the authorized common stock is set at the number described in Proposal No. 2);



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the number of shares reserved for issuance under our equity incentive plans will be reduced proportionately based on the ratio selected by the board (and other appropriate adjustments or modifications will be made under the respective plans);



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appropriate adjustments will be made to outstanding stock options granted under our equity incentive plans to maintain the economic value of the awards, as described below;stockholder; and



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appropriate adjustments will be made to outstanding warrants.if the stockholder is not a record owner of our securities, the name of the record owner of our securities beneficially owned by the stockholder.

        If Code of Business Conduct and Ethics

        We have adopted a reverse stock split is effected, the shares subjectwritten code of business conduct and ethics that applies to outstanding stock options will be adjusted, in accordance with the provisionsour principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have posted a current copy of the applicable equity incentive plan pursuant to which such awards were granted, usingCode of Business Conduct and Ethics in the ratio selected by the board. The shares subject to such awards will be rounded down for any fractional shares. Additionally, the exercise price of any outstanding options will be

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multiplied by the ratio selected by the board. For instance, using a 1-for-7 conversion ratio, if an employee has an option to purchase 1,400 shares at an exercise of $2.50 per share, then after the reverse stock split is effected, such employee would hold an option to purchase 200 shares (or 1,400 shares divided by seven) at an exercise price of $17.50 per share (or $2.50 multiplied by seven).

        In addition, if a reverse stock split is effected, the shares subject to outstanding warrants will be similarly adjusted, in accordance with the provisions of the applicable warrant, using the ratio selected by the board. The shares subject to such warrants will be rounded down for any fractional shares.

        A reverse stock split would affect all stockholders uniformly and would not alter any stockholder's percentage interest in our equity, except to the extent that a reverse stock split would result in some"Investors—Corporate Governance" section of our stockholders owningwebsite, which is located at www.iderapharma.com. We intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a fractional share as described below.

        A reverse stock split would not, by itself, affect our assets or business prospects. The common stock resulting from the reverse stock split will remain fully paid and non-assessable. The reverse stock split will not affect the public registration of the common stock under the Securities Exchange Act of 1934, as amended. The reverse stock split will also not affect our shares of preferred stock.

        If approved and implemented, a reverse stock split may result in some stockholders owning "odd lots" of less than 100 shares of common stock. Odd lot shares may be more difficult to sell, and brokerage commissions and other costs of transactions in odd lots are generally somewhat higher than the costs of transactions in "round lots" of even multiples of 100 shares.

        Assuming reverse stock split ratios of 1-for-4, 1-for-6 and 1-for-8, which reflect the low end, middle and high end of the range that our stockholders are being asked to approve, the following table sets forth (i) the number of sharesprovision of our common stock that would be issuedcode of business conduct and outstanding, (ii) the number of shares of common stock authorized (subject to Proposal No. 2), (iii) the aggregate number of shares ofethics by posting such information on our common stock that would be reserved for issuance upon (a) conversion of our Series A convertible preferred stock, (b) exercise of outstanding warrants and (c) exercise of outstanding stock options and (iv) the number of shares of our common stock that would be reserved and available for future issuance under our equity incentive plans, each giving effect to the reverse stock split and based on securities outstanding as of [                  ], 2017. Such amounts listed below are approximate as no fractional shares will be issued and share amounts shall be rounded down.

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Treatment of Fractional SharesCompensation Committee Interlocks and Insider Participation

        Our compensation committee currently consists of Drs. Gowen and Csimma and Mr. Pien, each of whom have served as members of our compensation committee for all or a portion of 2019. No fractional shares will be issuedmember of our compensation committee was at any time during 2019, or was formerly, an officer or employee of ours. No member of our compensation committee engaged in connection withany related person transaction involving our Company during 2019. None of our executive officers has served as a reverse stock split. Stockholders who otherwise would be entitled to receive fractional shares because they hold a numberdirector or member of shares of common stock not evenly divisible by the number selected bycompensation committee (or other committee serving the board for a reverse stock split ratio will be entitled, upon surrendersame function as the compensation committee) of any certificate(s) representing such shares, toother entity, while an executive officer of that other entity served as a cash payment (without interest) in lieu thereof equal to the fraction of one share of common stock that such holder would otherwise be entitled to receive multiplied by the closing price per sharedirector or member of our common stock on the first trading day that commences after the reverse stock split is effective on the NASDAQ Capital Market.

        Stockholders who receive a cash payment in lieu of such fractional shares will no longer have any rights as a stockholder with respect to such shares.compensation committee.

Accounting Matters

        The par value of our common stock will remain unchanged at $0.001 per share after a reverse stock split. The reverse stock split will not affect total assets, liabilities or shareholders' equity. However, the per share net income or loss and net book value of the common stock will be retroactively increased for each period because there will be fewer shares of common stock outstanding.

Procedure for Effecting a Reverse Stock Split and Exchange of Stock Certificates

        If stockholders approve the proposal to amend our Restated Certificate of Incorporation, as amended, and the board determines to implement the reverse stock split (with the ratio to be determined in the discretion of the board within the parameters described), we will file with the Secretary of State of the State of Delaware a Certificate of Amendment of Restated Certificate of Incorporation, as amended, in the form attached hereto as Appendix A, or the Certificate of Amendment, reflecting such reverse stock split ratio determined by the board. The reverse stock split will become effective at the time and on the date of filing of, or at such later time as is specified in, the Certificate of Amendment, which we refer to as the "effective time" and the "effective date," respectively. The effective time of the Certificate of Amendment shall be determined in the discretion of our board of directors and in accordance with applicable law. Beginning at the effective time, each certificate representing shares of common stock will be deemed for all corporate purposes to evidence ownership of the number of whole shares into which the shares previously represented by the certificate were combined pursuant to the reverse stock split.

        Our board has approved the amendment to our Restated Certificate of Incorporation, as amended. The ratio of the reverse stock split, within the parameters described, and the implementation and timing of such reverse stock split shall be determined in the discretion of our board of directors.

        Following any reverse stock split, stockholders holding physical certificates would need to exchange those certificates. As we are now fully participating in the direct registration system, you will not receive a replacement physical certificate. Instead you will receive uncertificated shares and a written confirmation from our transfer agent, Computershare Trust Company, N.A., indicating the whole number of uncertificated shares you own after the effect of the reverse stock split and a cash payment in lieu of any fractional shares. Our common stock will also receive a new CUSIP number.

        If a reverse stock split is implemented, our transfer agent will advise registered stockholders of the procedures to be followed to exchange certificates in a letter of transmittal to be sent to stockholders. No written confirmations will be issued to a stockholder until the stockholder has surrendered the stockholder's outstanding certificate(s), together with the properly completed and executed letter of transmittal, to our transfer agent. Any old shares submitted for transfer, whether pursuant to a sale,

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other disposition or otherwise, will automatically be exchanged for new shares.Stockholders should not destroy any stock certificate(s) and should not submit any certificate(s) until requested to do so.

        Certain of our registered stockholders hold some or all of their shares electronically in book-entry form with our transfer agent. These stockholders do not hold physical certificates evidencing their ownership of our common stock. However, they are provided with a statement reflecting the number of shares of our common stock registered in their accounts. If a stockholder holds shares of common stock in book-entry form with our transfer agent, no action needs to be taken to receive post-reverse stock split shares or payment in lieu of fractional shares, if applicable. If a stockholder is entitled to post-reverse stock split shares, a transaction statement will automatically be sent to the stockholder's address of record indicating the number of shares of our common stock held following the reverse stock split.

        Upon a reverse stock split, we intend to treat stockholders holding our common stock in "street name," through a broker, bank or other nominee, in the same manner as registered stockholders whose shares are registered in their names. Brokers, banks or other nominees will be instructed to effect a reverse stock split for their beneficial holders holding our common stock in "street name." However, these brokers, banks or other nominees may have different procedures than registered stockholders for processing a reverse stock split. If you hold your shares with a broker, bank or other nominee and if you have any questions in this regard, we encourage you to contact your nominee.

No Appraisal Rights

        Stockholders do not have appraisal rights under the Delaware General Corporation Law or under our Restated Certificate of Incorporation, as amended, in connection with the reverse stock split.

Reservation of Right to Abandon the Amendment to our Restated Certificate of Incorporation, as amendedHedging Policy

        Our board reservesinsider trading policy prohibits our directors and employees (including our executive officers) from hedging or entering into other similar arrangements with respect to the right to abandonCompany's securities, including, without limitation, short sales of Company securities, including short sales "against the amendment to our Restated Certificatebox," or purchases or sales of Incorporation, as amended, described in this Proposal No. 1 without further action by our stockholders at any time before the effective time, even if stockholders approve such amendment at the special meeting of stockholders. By voting in favor of the amendment to our Restated Certificate of Incorporation, as amended, stockholders are also expressly authorizing the board to determine not to proceed with, and abandon, a reverse stock split if it should so decide.

Material U.S. Federal Income Tax Consequences of the Reverse Stock Split

        The following discussion is a summary of the material U.S. federal income tax consequences of the proposed reverse stock split to U.S. Holders (as defined below) of our common stock. This discussion isputs or calls or other derivative securities based on the Internal Revenue Code of 1986, as amended, which we refer to as the Code, U.S. Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service, which we refer to as the IRS, in each case in effect as of the date of this proxy statement. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a U.S. Holder. We have not sought and will not seek any rulings from the IRS regarding the matters discussed below and there can be no assurance the IRS or a court will not take a contrary position to that discussed below regarding the tax consequences of the proposed reverse stock split.

        For purposes of this discussion, a "U.S. Holder" is a beneficial owner of our common stock that, for U.S. federal income tax purposes, is or is treated as (i) an individual who is a citizen or resident of the United States; (ii) a corporation (or any other entity or arrangement treated as a corporation) created or organized under the laws of the United States, any state thereof, or the District of

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Columbia; (iii) an estate, the income of which is subject to U.S. federal income tax regardless of its source; or (iv) a trust if (1) its administration is subject to the primary supervision of a court within the United States and all of its substantial decisions are subject to the control of one or more "United States persons" (within the meaning of Section 7701(a)(30) of the Code), or (2) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

        This discussion is limited to U.S. Holders who hold our common stock as a "capital asset" within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all U.S. federal income tax consequences relevant to the particular circumstances of a U.S. Holder, including the impact of the Medicare contribution tax on net investment income. In addition, it does not address consequences relevant to U.S. Holders that are subject to special rules, including, without limitation, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, grantor trusts, tax-exempt organizations, dealers or traders in securities or currencies, stockholders who hold our common stock as part of a position in a straddle or as part of a hedging, conversion or integrated transaction for U.S. federal income tax purposes, U.S. Holders that have a functional currency other than the U.S. dollar, or U.S. Holders who actually or constructively own 10% or more of our voting stock.

        If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is the beneficial owner of our common stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities of the partnership. Accordingly, partnerships (and other entities treated as partnerships for U.S. federal income tax purposes) holding our common stock and the partners in such entities should consult their own tax advisors regarding the U.S. federal income tax consequences of the proposed reverse stock split to them.

        In addition, the following discussion does not address the U.S. federal estate and gift tax, alternative minimum tax, or state, local and non-U.S. tax law consequences of the proposed reverse stock split. Furthermore, the following discussion does not address any tax consequences of transactions effectuated before, after or at the same time as the proposed reverse stock split, whether or not they are in connection with the proposed reverse stock split.

Each stockholder should consult his, her or its own tax advisors concerning the particular U.S. federal tax consequences of the reverse stock split, as well as the consequences arising under the laws of any other taxing jurisdiction, including any state, local or foreign income tax consequences.

        The proposed reverse stock split is intended to be treated as a "recapitalization" for U.S. federal income tax purposes pursuant to Section 368(a)(1)(E) of the Code. As a result, a U.S. Holder generally should not recognize gain or loss upon the proposed reverse stock split for U.S. federal income tax purposes, except with respect to cash received in lieu of a fractional share of our common stock, as discussed below. A U.S. Holder's aggregate adjusted tax basis in the shares of our common stock received pursuant to the proposed reverse stock split should equal the aggregate adjusted tax basis of the shares of our common stock exchanged therefor (reduced by the amount of such basis that is allocated to any fractional share of our common stock). The U.S. Holder's holding period in the shares of our common stock received pursuant to the proposed reverse stock split should include the holding period in the shares of our common stock exchanged therefor. U.S. Treasury Regulations provide detailed rules for allocating the tax basis and holding period of shares of common stock surrendered in a recapitalization to shares received in the recapitalization. U.S. Holders of shares of our common stock acquired on different dates and at different prices should consult their tax advisors regarding the allocation of the tax basis and holding period of such shares.

        A U.S. Holder that, pursuant to the proposed reverse stock split, receives cash in lieu of a fractional share of our common stock should recognize capital gain or loss in an amount equal to the difference, if any, between the amount of cash received and the portion of the U.S. Holder's aggregate

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adjusted tax basis in the shares of our common stock surrendered that is allocated to such fractional share. Such capital gain or loss will be short term if the pre-reverse stock split shares were held for one year or less at the effective time of the reverse stock split and long term if held for more than one year. No gain or loss will be recognized by us as a result of the proposed reverse stock split.

        A U.S. Holder of our common stock may be subject to information reporting and backup withholding on cash paid in lieu of a fractional share in connection with the proposed reverse stock split. A U.S. Holder of our common stock will be subject to backup withholding if such U.S. Holder is not otherwise exempt and such U.S. Holder does not provide its taxpayer identification number in the manner required or otherwise fails to comply with applicable backup withholding tax rules. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or allowed as a credit against a U.S. Holder's federal income tax liability, if any, provided the required information is timely furnished to the IRS. U.S. Holders of our common stock should consult their own tax advisors regarding their qualification for an exemption from backup withholding and the procedures for obtaining such an exemption.

        The U.S. federal income tax discussion set forth above does not discuss all aspects of U.S. federal income taxation that may be relevant to a particular stockholder in light of such stockholder's circumstances and income tax situation.Accordingly, we urge you to consult with your own tax advisor with respect to all of the potential U.S. federal, state, local and foreign tax consequences to you of the reverse stock split.

Recommendation of the Board of Directors

Our board of directors unanimously recommends that the stockholders vote FOR the proposal to amend our Restated Certificate of Incorporation, as amended, to effect a reverse stock split of our issued and outstanding common stock by a whole number ratio of not less than 1-for-4 and not more than 1-for-8, such ratio and the implementation and timing of such reverse stock split to be determined in the discretion of our board of directors at any time prior to our 2018 annual meeting of stockholders, and, in connection therewith, to decrease the number of authorized shares of our common stock on a basis proportional to the reverse stock split ratio.

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PROPOSAL TWO

APPROVE AN AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED, TO SET THE NUMBER OF AUTHORIZED SHARES OF OUR COMMON STOCK AT A NUMBER DETERMINED BY CALCULATING THE PRODUCT OF 280,000,000 MULTIPLIED BY TWO TIMES (2X) THE REVERSE STOCK SPLIT RATIO.

General

        In October 2017, our board approved, subject to stockholder approval and the implementation of the reverse stock split described in Proposal No. 1, an additional amendment to our Restated Certificate of Incorporation, as amended, to set the number of authorized number of shares of our common stock at a number determined by calculating the product of 280,000,000 multiplied by two times (2x) the reverse stock split ratio. If Proposal No. 1 and Proposal No. 2 are approved and the reverse stock split is implemented then, effectively, upon such split, the number of our authorized shares of common stock will be decreased proportionally to the reverse stock split ratio, and then such decreased amount will be increased by 200%.

        Our board believes that, if Proposal No. 2 is not approved, following the implementation of a reverse stock split of our issued and outstanding common stock and the proportionate decrease in our authorized common stock as described in Proposal No. 1, we would have limited flexibility to issue shares of common stock in connection with possible future financings, joint ventures, acquisitions, stock incentive plans and other general corporate purposes. As a result, our board believes that a 2x increase in our authorized common stock in such instance is in our and our stockholders' best interests because it will provide us with that flexibility. We do not currently have any plans, understandings, arrangements, commitments or agreements, written or oral, for the issuance of the additional shares of common stock that would be authorized if this proposal is approved. However, we desire to have the shares available to provide additional flexibility to use our common stock for business and financial purposes in the future as well to have sufficient shares available to provide appropriate equity incentives for our employees.

        Proposal No. 2 is subject to, and conditioned upon, approval of the amendment to our Restated Certificate of Incorporation, as amended, to effect the reverse stock split in Proposal No. 1. If the reverse stock split pursuant to Proposal No. 1 and the amendment pursuant to this Proposal No. 2 are approved by the requisite vote of our stockholders, and our board determines to implement such proposals, the change in the number of shares of our authorized common stock would become effective upon the date and time set by our board, as set forth in the amendment to our Restated Certificate of Incorporation, as amended, to be filed with the Secretary of State of the State of Delaware. In addition, our board reserves the right, notwithstanding stockholder approval and without further action by our stockholders, to abandon the amendment if, at any time prior to the effectiveness of the filing of the amendment with the Secretary of State, our board, in its sole discretion, determines that it is no longer in our best interest and the best interests of our stockholders to proceed. Our board does not anticipate receiving further authorization from stockholders for the issuance of any newly authorized shares, except as required by applicable laws, rules and regulations.

        The form of the proposed amendment to our Restated Certificate of Incorporation, as amended, to effect the reverse stock split and set the number of authorized shares of our common stock at a number determined by calculating the product of 280,000,000 multiplied by two times (2x) the reverse stock split ratio is attached as Appendix A to this proxy statement. Any amendment to our Restated Certificate of Incorporation, as amended, to set the number of authorized shares of our common stock at a certain number will be based on the reverse stock split ratio fixed by our board, within the range approved by our stockholders pursuant to Proposal No. 1.Company's securities.

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Effect of the ProposalEXECUTIVE OFFICERS

        We currently have 280,000,000 shares of common stock authorized for issuance under our Restated Certificate of Incorporation, as amended. Assuming (i) reverse stock split ratios of 1-for-4, 1-for-6 and 1-for-8, which reflect the low end, middle and high end of the range that our stockholders are being asked to approve, and (ii) that the number of our authorized shares of common stock is reduced proportionally to the reverse stock split ratios of 1-for-4, 1-for-6 and 1-for-8 and then subsequently increased by 2x as provided in Proposal No. 2, the following table sets forth (a) the number of shares of our common stock that would be authorized, (b) the number of shares of our common stock that would be issued and outstanding, (c) the aggregate number of shares of our common stock that would be reserved for issuance upon (1) conversion of our Series A convertible preferred stock, (2) exercise of outstanding warrants and (3) exercise of outstanding stock options and (d) the number of shares of our common stock that would be reserved and available for future issuance under our equity incentive plans, each giving effect to the reverse stock split and based on securities outstanding as of [            ], 2017. The following table also sets forth the number of shares of our common stock that would be authorized if this Proposal No. 2 is not approved. Such amounts listed below are approximate as no fractional shares will be issued and share amounts shall be rounded down.

        The additional shares of authorized common stock would have the same rights and privileges as the shares of common stock currently issued and outstanding. Holders of our common stock have no preemptive rights.

Reservation of Right to Abandon the Amendment toInformation about our Restated Certificate of Incorporation, as amendedExecutive Officers

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

John J. Kirby joined the rightCompany in 2015 as the Company's Vice President of Corporate Accounting and has served as Vice President of Finance from July 2018 to abandonJuly 2019 and as Senior Vice President and Chief Financial Officer since July 2019 (principal financial officer and principal accounting officer since October 2018). Prior to joining us, Mr. Kirby served as Assistant Controller at Endo Pharmaceuticals, Inc. from November 2014 to October 2015. From August 2012 to July 2014, Mr. Kirby served as Vice President, Chief Accounting Officer and Corporate Controller at ViroPharma Incorporated, which was acquired by Shire Plc in January 2014. Mr. Kirby began his career at KPMG, LLP in their Healthcare and Life Science Practice and served as a Regional Audit Director at AstraZeneca Pharmaceuticals L.P. prior to joining ViroPharma Incorporated. Mr. Kirby received his B.S. in Accountancy from Villanova University and is a licensed certified public accountant in the amendmentCommonwealth of Pennsylvania.

R. Clayton Fletcher has been our Senior Vice President, Business Development and Strategic Planning since January 2015. Prior to joining us, Mr. Fletcher served in increasingly senior positions at ViroPharma Incorporated, which was acquired by Shire Plc in January 2014, from April 2001 until January 2014, including as Vice President, Business Development and Project Management from 2005 until January 2014. Mr. Fletcher served as Senior Project Manager at SmithKline Beecham plc, a pharmaceutical company, which was purchased by Glaxo Wellcome plc in December 2000, from 1997 until 2001. Prior to working at SmithKline Beecham plc, he served as Project Scientist, at Becton, Dickinson and Company, a medical devices company and as Principal Scientist at Intracel Corporation, a biopharmaceutical company. Prior to working at Intracel Corporation, he served as Senior Associate Scientist at Centocor Biotech, Inc., a biotechnology company from 1991 until 1993. Mr. Fletcher holds a B.S. and a M.S. in biology from Wake Forest University.

Bryant D. Lim has been our Restated CertificateSenior Vice President, General Counsel and Secretary since September 2018. Prior to joining us, Mr. Lim served as Vice President, Assistant General Counsel and, prior to that, Global Chief Compliance Officer at Incyte Corporation from March 2014 to September 2018. Prior to Incyte Corporation, Mr. Lim held roles of Incorporation,increasing responsibility at ViroPharma Incorporated from January 2009 until its acquisition by Shire Plc in January 2014. Mr. Lim served as amended, describedAssistant Counsel at Merck & Co., Inc. and also was associated with Morgan, Lewis & Bockius, LLP. Mr. Lim began his legal career as a law clerk for a federal judge. Mr. Lim received his J.D. from Villanova University School of Law, where he currently serves on its adjunct faculty where he teaches about the Law of Drugs and Biologics. Mr. Lim received his B.A. from the University of Rochester. Mr. Lim also serves on the board of directors of Life Sciences of Pennsylvania.

Elizabeth Tarka, M.D., FACC, joined our Company as Senior Vice President, Chief Medical Officer in this Proposal No. 2 without further action by our stockholdersJuly 2019. Prior to joining us, Dr. Tarka served as Vice President, Clinical Development at

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Complexa, Inc. from September 2017 to July 2019 where she was responsible for the clinical development of a novel asset in rare diseases. Prior to Complexa, Inc., Dr. Tarka served as Clinical Program Lead, Clinical Development at any time beforeJanssen Pharmaceuticals, Inc. from September 2015 to September 2017, where she was the effective time, even if stockholders approve such amendmentClinical Program Leader for Xarelto® (rivaroxaban) and was responsible for the design, implementation and medical oversight for large multinational trials. Dr. Tarka held roles of increasing responsibility in late state clinical development of cardiovascular medications at GlaxoSmithKline from May 2003 to May 2015 and held the role of Senior Director, Clinical Development at the special meetingtime of stockholders.

Recommendationher transition to Janssen. Dr. Tarka earned her B.A. in Biochemistry and an M.D. from the University of Pennsylvania where she also completed her Internal Medicine residency and Cardiovascular fellowship training. She was also an Assistant Professor of Medicine in the BoardCardiovascular Division at the University of Directors

Our board of directors recommends that stockholders vote FOR the proposal to amend our Restated Certificate of Incorporation, as amended, to set the number of authorized shares of our common stock at a number determined by calculating the product of 280,000,000 multiplied by two times (2x) the reverse stock split ratio.Pennsylvania where she had numerous major teaching and clinical responsibilities.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

        On October 31, 2017, we had [            ] shares of common stock issued and outstanding. The following table sets forth, as of March 24, 2020, information we know about the beneficial ownership of our common stock as of October 31, 2017, by:

•

each person or entity, including any "group" as that term is used in Section 13(d)(3) of the Exchange Act, who is known by us to own beneficially more than 5% of the issued and outstanding shares of our common stock;



•

each of our current directors;



•

each of our named executive officers, serving as of December 31, 2016;set forth in the Summary Compensation Table set forth in this proxy; and



•

all of our current directors and executive officers as a group.

        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. Under such rules, beneficialThe SEC has defined "beneficial" ownership of a person includes any shares assecurity to which such person hasmean the solepossession, directly or sharedindirectly, of voting power and/or investment power. In addition, under such rules, beneficial ownership of a person includes any shares that such person has the right to acquire within 60 days after October 31, 2017 through the conversion of any convertible security or the exercise of any stock option, warrant or other right. These shares, however, are not considered outstanding when 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 24, 2020, 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.

        Unless otherwiseTo our knowledge and except as indicated in the footnotesnotes to thethis table below,and pursuant to applicable community property laws, each stockholder named in the table has sole voting and investment and voting power (or shares such power with his or her spouse) with respect to the shares shown as beneficially owned by them.set forth opposite such stockholder's name. The inclusionpercentage of any shares deemed beneficially owned does not constitute an admission of beneficial ownership of such shares.is

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based on 30,607,326 shares of our common stock issued and outstanding on March 24, 2020. All fractional common share amounts have been rounded to the nearest whole number.

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                        , 2017

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APPENDIX AEXECUTIVE COMPENSATION

Compensation Discussion and Analysis

        This Compensation Discussion and Analysis ("CD&A") should be read in conjunction with the compensation tables and narratives that immediately follow this section.

Overview

        We are a development-stage biotech company focused on the acquisition, development, and ultimate commercialization of drug candidates for both oncology and rare disease indications characterized by small, well-defined patient populations with serious unmet needs. As such, we operate in an environment that is very competitive from a business perspective and for talent. We see that having a competitive compensation program is one element of our employee value proposition that allows us to attract and retain the resources we need to drive our business success.

Purpose

        The purpose of this CD&A is to provide our stockholders with an overview and understanding of the philosophy, objectives, process, components, decision making, and additional aspects of our 2019 executive compensation program. This analysis focuses on the compensation paid to our named executive officers ("NEOs"):

•

Vincent J. Milano, President and Chief Executive Officer,



•

John J. Kirby, Senior Vice President and Chief Financial Officer(1)



•

R. Clayton Fletcher, Senior Vice President of Business Development and Strategy



•

Bryant D. Lim, Senior Vice President, General Counsel and Corporate Secretary



•

Jonathan Yingling, Former Senior Vice President and Chief Scientific Officer(2)

(1)

Mr. Kirby was named our Senior Vice President and Chief Financial Officer effective July 1, 2019. Previously, Mr. Kirby served as our Vice President of Finance and as our Principal Financial Officer and Principal Accounting Officer. Mr. Kirby acted as and performed the functions of our principal financial officer for the entirety of 2019, irrespective of changes to his officer title.

(2)

Dr. Yingling served as our Senior Vice President and Chief Scientific Officer for the entirety of fiscal 2019. Effective as of January 31, 2020, Dr. Yingling resigned from such position.

Business Achievements

        Our executive compensation program is designed to, among other goals, align executive compensation with the achievement of measurable corporate objectives. In 2019, the Company achieved strong results against its objectives, highlighted by the following:

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Continued progress of tilsotolimod toward its first potential registration in anti-PD-1 refractory melanoma;



•

Expanding the potential of tilsotolimod beyond melanoma; and



•

Enhancing our financial position.

        Further detail regarding our performance against 2019 goals can be found in the section "Annual Cash Performance Bonus."

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Key Compensation Decisions and Actions

        Our compensation committee took several actions in 2019, considering our compensation philosophy and objectives, the needs and performance of our Company, individual performance, and other factors such as market data and industry best practices.

•

Base Salary. The compensation committee reviewed base salaries of our NEOs in January 2019. No adjustments were made to the salaries of Mr. Fletcher, Mr. Milano, and Dr. Yingling, as they were determined to be market competitive during our benchmark analysis. Mr. Lim received a salary adjustment to maintain reasonable positioning relative to our peer companies. Mr. Kirby received no salary increase in January 2019, since his salary had been adjusted in October 2018 to reflect his assumption of additional responsibilities. Mr. Kirby's salary was adjusted, in alignment with benchmark data from our peer companies, when he was promoted to Chief Financial Officer in July 2019. Further detail regarding our salary review and decision-making process is provided in the section "Base Salary."



•

Annual Cash Performance Bonus. In January 2019, the compensation committee approved corporate goals as part of our 2019 bonus program. The corporate goals consisted of three primary corporate objectives, each with its own weighting to reflect their importance to our business. To the extent goals are partially met or exceeded, the compensation committee may ascribe a partial achievement or overachievement percentage to each goal, as applicable. The compensation committee also reviews individual performance to determine whether the potential bonus should be increased or decreased. In January 2020, the compensation committee reviewed our achievements against our 2019 corporate objectives and agreed to attribute a corporate performance score of 105%. Further detail relating to this program is provided in the section "Annual Cash Performance Bonus."



•

Long-term Equity Incentive Awards. In January 2019, the compensation committee approved the grant of the 1^st tranche of the biannual option awards and an award of restricted stock units to our NEOs. Additionally, in July 2019, the compensation committee approved the grant of the 2^nd tranche of biannual option awards. Further detail relating to our stock incentive program is provided in the section "Long Term Equity Compensation."

        The compensation committee again reviewed base salaries of our NEOs in January 2020. No adjustments were made to the salaries of any of our NEOs as they were determined to be market competitive during our benchmark analysis.

        As it relates to Mr. Milano's 2020 base salary, the Company entered into an amendment to Mr. Milano's employment agreement in January 2020. This amendment was recommended by Mr. Milano as a way for the Company to conserve cash during 2020 and subsequently approved by the board. Pursuant to this amendment, Mr. Milano's annual base salary of $600,000 shall be payable as follows: (i) for the period from January 1, 2020 to the January 10, 2020, $18,182 was payable in cash; and (ii) for the period immediately following the January 10, 2020 to December 31, 2020, an additional $6,600 shall be payable in cash and the balance of his 2020 salary, approximately $575,218, shall be payable in the form of a restricted stock unit grant to be granted to Mr. Milano on December 18, 2020.

Compensation Philosophy and Objectives

        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 page 13 for further detail regarding the composition,

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independence, and responsibilities of our compensation committee. Our executive compensation program is designed to achieve the following broad goals:

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attract, retain and motivate the best possible executive talent;



•

ensure executive compensation is aligned with our corporate strategies and business objectives, including our short-term operating goals and longer-term strategic objectives;



•

promote the achievement of key strategic and financial performance measures by linking short- and long-term cash and equity incentives to the achievement of measurable corporate and individual performance goals; and



•

align executives' incentives with the creation of stockholder value.

        To achieve these objectives, the compensation committee:

•

sets short- and long-term compensation at levels the compensation committee believes are competitive with those of other companies in our industry and our region that compete with us for executive talent;



•

conditions a substantial portion of each executive officer's overall cash compensation on the achievement of key strategic, financial, research, and operational goals such as clinical trial and regulatory progress, intellectual property portfolio development, establishment and maintenance of key strategic relationships, and exploration of business development opportunities, as well as our financial and operational performance; and



•

provides a portion of our executive compensation in the form of equity awards that vest over time from the date of grant of the option awards and from the time of achievement of performance milestones when applicable, which we believe helps to retain our executives and align their interests with those of our stockholders by allowing them to participate in the longer term success of our Company as reflected in stock price appreciation.

Advisory Vote on Executive Compensation

        We conducted an advisory vote on executive compensation, commonly referred to as a "say-on-pay" proposal, at our 2019 Annual Meeting of Stockholders. While this vote was not binding on us, we value the opinions of our stockholders and, to the extent there is any significant vote against the compensation of our named executive officers in the future, we will consider our stockholders' concerns and our board and compensation committee will evaluate whether any actions are necessary to address those concerns.

        At our 2019 Annual Meeting of Stockholders, approximately 95% of the votes cast on the advisory vote on executive compensation approved the compensation paid to our named executive officers as disclosed in the proxy statement for that meeting. The board of directors and compensation committee considered the results of this advisory vote, together with the other factors and data, in determining executive compensation decisions and will continue to consider the outcome of our say-on-pay votes when making future compensation decisions for our NEOs.

Executive Compensation Process

Role of Our Compensation Committee and Our Chief Executive Officer

        In order to accomplish its objectives consistent with its philosophy for executive compensation and determine compensation for our named executive officers, our compensation committee reviews competitive information on executive compensation practices from peer companies as well as an

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assessment of overall corporate performance and individual performance. In connection therewith, our compensation committee typically takes the following actions annually:

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reviews chief executive officer performance;



•

seeks input from our chief executive officer on the performance of other NEOs;



•

reviews all components of our executive compensation program, including base salary, cash bonus targets and awards, equity compensation, and the estimated payout obligations under severance and change in control scenarios;



•

considers historic compensation and amounts realizable from prior awards;



•

consults with its independent compensation consultant;



•

holds executive sessions (without our management present);



•

reviews information regarding the performance and executive compensation of its peer companies; and



•

reviews the outcomes from the foregoing with the board of directors.

        Our chief executive officer does not submit an assessment of his own performance and does not participate in the portion of the meeting where his compensation is determined. Our compensation committee reviews and approves, or recommends for approval by the board, the compensation of our NEOs, including our chief executive officer.

        Under our annual performance review program, annual performance goals are determined for our Company as a whole and for each individual NEO.

•

Annual corporate goals are proposed by management and approved by the board of directors. These corporate goals target the achievement of specific research, clinical, operational, and financial milestones. The compensation committee determines how the components of our annual corporate goals will contribute to the overall performance evaluation.



•

Annual individual goals focus on contributions that facilitate the achievement of our corporate goals. Individual goals are proposed at the start of each year by each NEO and approved by the chief executive officer and, as appropriate, the compensation committee. Typically, the compensation committee sets the chief executive officer's goals and reviews and discusses with the chief executive officer the goals for the other NEOs. The individual performance goals of each NEO consist primarily of the key objectives and goals from our annual business plan that relate to the functional area for which such NEO is responsible. The individual performance goals for the chief executive officer are largely coextensive with the corporate goals.

        At the end of each year, the compensation committee evaluates corporate and individual performance.

        In assessing corporate performance, the compensation committee evaluates corporate performance relative to the approved corporate goals for the applicable year, as well as other aspects of corporate performance, including progress and achievement of milestones outside of the corporate goals.

        The compensation committee evaluates individual performance with respect to the areas that fall within each NEO's responsibility. In doing so, the compensation committee relies on the chief executive officer's evaluation of the other NEOs. The chief executive officer prepares evaluations of the other NEOs, which includes comparing such individual's performance to his or her individual performance goals. The chief executive officer recommends annual executive salary increases, annual stock option awards and bonuses, if any, for the other NEOs; the compensation committee then reviews and approves, as appropriate, the chief executive officer's recommendations. In the case of the chief

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executive officer, the compensation committee independently conducts his individual performance evaluation and determines his compensation accordingly.

        During this process, the compensation committee consults with its independent compensation consultant. In connection with the compensation committee's annual performance and compensation review in the fourth quarter of each year, the independent compensation consultant provides the compensation committee with a blend of the data from the peer group (identified below for 2018) and relevant compensation survey data from the Radford Global Life Sciences Survey. We refer to this blended data as the "market compensation data."

        For all NEOs, annual base salary increases, if any, are awarded during the first quarter following the end of the fiscal year. Annual stock option awards and bonuses, if any, are granted as determined by the compensation committee. Annual bonuses are typically granted in the first quarter of the fiscal year, while annual stock option awards are given in two biannual tranches, typically in the first and third quarters of the fiscal year.

Role of the Compensation Committee's Independent Consultant

        In the fourth quarter of 2018, our compensation committee engaged Pearl Meyer & Partners, LLC ("Pearl Meyer") in connection with our 2019 annual compensation assessment to review our executive compensation practices and to provide the compensation committee with an assessment of our compensation program against competitive market data. See "Use of Market Compensation Data" below for a discussion of the competitive market compensation data compiled by Pearl Meyer. Based on this assessment, Pearl Meyer made recommendations to our compensation committee regarding the amount and form of executive officer compensation, including the ratio of cash to equity compensation and "at-risk" compensation. Pearl Meyer did not provide any services to our Company during 2019 other than pursuant to their respective engagement by the compensation committee, which was limited to aforementioned assessment of our executive officer compensation program.

        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 has not created 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.

Benchmarking: Use of Market Compensation Data

        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 2018 to create a peer group of publicly traded companies to be used in connection with our 2019 compensation decisions, including stock options granted during 2019, fiscal year 2019 salary adjustments and fiscal year 2019 target bonus percentages. In selecting this peer group, the compensation committee and Pearl Meyer generally targeted

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mid- to late-development stage companies in the Pharmaceuticals, Biotechnology and Life Sciences sectors that generally met the following screening criteria:

•

Company Size: revenue less than or equal to $150M; operating expense less than or equal to four times our operating expense (i.e., less than or equal to $220M); employees fewer than 200;



•

Business Operations: companies with Phase 2 or Phase 3 assets focused on cancer/oncology/immune-oncology, and with no or few other areas of research and development; and



•

Other: exclude subsidiaries; companies with business challenges; companies having market valuations below $100M; and companies that have recently conducted an initial public offering.

        The following table lists the companies included in the 2018 peer group used in connection with our 2019 compensation decisions referred to above:

        The foregoing peer group companies were recommended by Pearl Meyer and approved by our compensation committee because they have similar business profiles to ours considering number of employees, market value and stage of development. Additionally, while there were no quantitative changes to the screening criteria used for determining the 2018 peer group used for 2019 compensation decisions, as compared to the determination of the 2017 peer group used for 2018 compensation decisions, we did narrow the areas of business focus to only cancer/oncology/immune-oncology to reflect our pipeline focus as of the end of 2018. Certain companies were excluded from or added to the 2018 peer group, primarily due to this factor and/or application of our screening criteria (e.g., quantitative metrics and market capitalization).

        Our compensation committee intends that if we achieve our corporate goals and the executive performs at the level expected, the executive should have the opportunity to receive compensation that is competitive with industry norms. Accordingly, our compensation committee generally targets overall compensation for NEOs towards the 50th percentile of the market data. However, the compensation committee does not apply those targets formulaically and allows for NEOs to be positioned at different percentiles based each individual NEO's experience, current and future performance levels, and changes in duties and responsibilities.

Components of Executive Compensation

        The primary elements of our executive compensation program are:

•

base salary;



•

annual cash bonuses;



•

long-term equity awards (i.e., stock option and restricted stock awards); and



•

severance and change in control benefits.

        The value of our variable, performance-based compensation is allocated between short-term compensation in the form of a cash bonus and long-term compensation in the form of equity awards that vest over time from the date of grant of the award or from the time of achievement of performance milestones. The annual cash bonus is intended to provide an incentive to our NEOs to achieve short-term operational objectives, while equity awards are intended to incentivize our NEOs to achieve longer-term strategic business goals, which should ultimately lead to higher stock prices and

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increased stockholder value. We do not have any formal or informal policy or target for allocating compensation between long-term and short-term compensation, between cash and non-cash compensation, or among the different forms of non-cash compensation. Instead, the compensation committee, after reviewing industry information, including the compensation practices of our peer companies, and our cash resources, determines subjectively what it believes to be the appropriate level and mix of the various compensation components.

        We do not have any defined benefit pension plans or non-qualified deferred compensation plans.

        We are party to employment agreements and employment offer letters with each of our NEOs. Employment agreements and employment offer letters with our NEOs are described below under the caption "Employment Agreements with our NEOs."

Base Salary

        In establishing base salaries for our named executive officers, our compensation committee typically:

•

reviews the market compensation data provided by the independent compensation consultant;



•

considers historic salary levels of the NEO and the nature of the NEO's responsibilities;



•

compares each NEO's base salary with the salaries of our other NEOs; and



•

considers the NEO's experience, performance and contributions.

        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 the achievement of 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 2018 annual performance and compensation review, the compensation committee approved annual base salaries for our executive officers for 2019. In setting these annual base salaries, the compensation committee reviewed the 2018 market compensation data presented by Pearl Meyer. Similarly, as part of our December 2019 annual performance and compensation review, the compensation committee reviewed the 2019 market compensation data and approved annual base salaries for our executive officers for 2020. In each of the 2018 and 2019 reviews, after considering each executive's current salary, performance, and experience in the context of the market compensation data as well as relative to one another, the compensation committee approved the following base salaries:

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Annual Cash Performance Bonus

        The annual cash performance bonus provides an opportunity for additional income to NEOs if pre-established annual performance goals are attained, which focuses our NEOs on key annual objectives. The compensation committee generally structures cash bonuses by linking them to the achievement of the annual corporate goals, corporate performance outside of the corporate goals (e.g. an unexpected opportunistic business development deal would be factored subjectively as an adjustment to the score that the compensation committee derived from evaluation of the corporate goals), and individual performance. The amount of the bonus paid, if any, varies among the NEOs depending on individual performance and their contribution to the achievement of our annual corporate goals and corporate performance generally. The compensation committee reviews and assesses corporate goals and NEO individual performance and considers the reasons why specific goals were or were not achieved. While achievement of the corporate goals is given substantial weight in connection with the determination of annual bonuses, the compensation committee also factors in an evaluation of each NEO's individual performance in relation to his or her individual performance goals and may exercise discretion in its determinations. Additionally, the compensation committee considers the following subjective criteria:

•

leadership;



•

management;



•

judgment and decision-making skills;



•

results orientation; and



•

communication.

        The annual cash performance bonuses 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. Each year, the compensation committee reviews the individual bonus target percentages against the market data to ensure its competitiveness.

        The following table sets forth the individual bonus target percentages for each of our NEOs for 2019 and 2020.

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        Consistent with our Company-wide annual incentive plan applicable to all employees, including our NEOs, both a corporate performance score and individual performance score factored into the determination of each NEO's cash bonus award for 2019.

        Under the terms of our incentive plan, the corporate performance score is based on the degree to which corporate performance objectives have been achieved. This score is determined by the compensation committee and may range from 0-125%. The individual performance score is based on:

•

the degree to which individual performance objectives have been achieved;



•

the competencies and behaviors demonstrated in achieving results;



•

the technical skills required by the position; and



•

the completion of the ongoing responsibilities required by the position.

        Like the corporate performance score, the individual performance score may range from 0-125% and is approved by the compensation committee. The individual's actual award is then calculated as follows:

        In setting corporate goals in the first quarter of 2019, the compensation committee agreed to group the business objectives into one of three primary categories, each of which would contribute toward the overall assessment of our corporate performance. In assessing our achievement of the 2019 corporate goals, and determining the corporate performance score, the compensation committee

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considered the extent to which the Company achieved the business objectives in each of the categories, and assigned a score for each category, as summarized in the following table:

        Based on these achievements and resulting category scores, the compensation committee approved a corporate performance score of 105%.

        In assessing each NEO's individual performance score, the compensation committee determined:

•

Mr. Milano's, our Chief Executive Officer, overall score was equivalent to the corporate performance score of 105%;



•

Mr. Kirby's individual performance score, recognizing his achievement against his personal objectives and taking into consideration his promotion to chief financial officer, as well as his leadership contributions, was 100%. Using the broader corporate score of 105%, as noted above, this resulted in an overall bonus equal to 105% of his bonus target;



•

Mr. Fletcher's individual performance score, recognizing his achievement against his personal objectives, including his role in business development along with his leadership contributions, was 100%, resulting in an overall bonus equal to 105% of his bonus target;



•

Mr. Lim's individual performance score, recognizing his achievement against his personal objectives, including legal support to the ILLUMINATE program and corporate governance-related matters, along with his leadership contributions, was 110%. Using the broader corporate score of 105% as noted above, this resulted in an overall bonus equal to 116% of his bonus target; and

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•

Dr. Yingling's individual performance score, recognizing his achievement against his personal objectives, including his contributions to business development, and his leadership contributions, would be 100%, resulting in an overall bonus equal to 105% of his bonus target.

Long-Term Equity Compensation

        Our equity award program is the primary vehicle for offering long-term incentives to our executive officers, including our NEOs. We believe that equity awards provide our executives with a strong link to our long-term performance, create an ownership culture and help to align the interests of our NEOs and with those of our stockholders. Equity grants are intended as both a reward for contributing to our long-term success and an incentive for future performance. Additionally, the vesting feature of our equity awards is intended to further our goal of executive retention by providing an incentive to our NEOs to remain in our employ during the vesting period. In determining the size of equity awards to our executives, our compensation committee considers:

•

the achievement of our annual corporate goals;



•

individual performance;



•

the previous awards granted to each executive officer, including the exercise price of such previous awards;



•

the recommendations of management;



•

the market compensation data presented by the compensation committee's independent compensation consultant; and



•

the combined components of the executive officer's compensation.

        The compensation committee approves all equity awards to our NEOs. Our equity awards have historically been in the form of stock options. However, under the terms of our 2013 Stock Incentive Plan, as amended, we may grant equity restricted stock awards, stock appreciation rights, and restricted stock units. In January 2019, in connection with our annual equity award issuance, both stock options and restricted stock units were granted to all eligible employees, including our NEOs. This change was made in light of competitive market practices and as an additional means to promote retention in a challenging labor market, as well as in consideration of 2018 corporate performance and the Company's long-term stock price trend.

        The compensation committee typically makes initial stock option awards to our NEOs upon commencement of their employment and annual stock option awards thereafter. Stock option awards to our NEOs after the initial stock option awards have typically been granted annually after the annual performance review. For 2019, this review occurred at the regularly scheduled meeting of the compensation committee held in the first quarter of 2019. Beginning in 2019, annual stock option awards for all employees, including our NEOs, are granted in two biannual tranches in order to increase the recognition and retention related aspect of the awards. In general, annual stock option grants vest with respect to 25% of the shares subject to the option on the first anniversary of the date of grant and with respect to the balance of the shares subject to the option, in 12 equal quarterly installments over the three-year period thereafter. The exercise price of stock options equals the fair market value of our common stock on the date of grant, which is typically equal to the closing price of our common stock on Nasdaq on the date of compensation committee approval except in the case of new-hire grants, which are approved in advance by the compensation committee and granted on the first day of employment.

        In December 2018, as part of its annual executive compensation and performance review, the compensation committee reviewed the 2018 market compensation data regarding annual stock option grants and special restricted stock unit awards. In January 2019, the compensation committee approved

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the grant of the 1^st tranche of the biannual option awards and an award of restricted stock units to our NEOs. Additionally, in July 2019, the compensation committee approved the grant of the 2^nd tranche of biannual option awards. The following table sets forth the number of options and restricted stock units granted to our NEOs in 2019:

Benefits and Other Compensation

        Broad-Based Benefits.    We maintain broad-based benefits that are provided to all employees, including health and dental insurance, life and disability insurance, and a 401(k) plan. During 2019, we matched 100% of the employee contributions to our 401(k) plan up to a maximum of 5% of the participating employee's annual salary. Our NEOs are eligible to participate in all our employee benefit plans, in each case on the same basis as other employees and subject to any limitations in such plans. Each of our NEOs, except for Mr. Fletcher, contributed to our 401(k) plan and their contributions were matched by us.

        Retirement Policy Regarding the Treatment of Equity Awards.    Our board of directors has adopted a retirement policy to address the treatment of options in the event of an employee's retirement that applies to all employees, including all officers. For purposes of this policy, an employee will be deemed to have retired if (i) the employee terminates his or her employment with us, (ii) has been an employee of ours for more than 10 years and (iii) is older than 65 upon termination of employment. Under the policy, if an employee retires, then:

•

all outstanding equity awards held by the employee will automatically vest in full; and



•

the period during which the employee may exercise the options will be extended to the expiration of the term of the option under the applicable option agreement.

        Our board adopted this policy for our employees in recognition of the importance of stock options to the compensation of employees and in order to provide each of our employees with the opportunity to get the full benefit of the options held by the employee in the event of his or her retirement after making 10 years of contributions to our Company.

        Relocation Expenses.    We occasionally pay relocation expenses for newly-hired executive officers who we require to relocate as a condition to their employment offer. We also occasionally pay local housing expenses and travel costs for executive officers who maintain a primary residence outside of a reasonable daily commuting range to our headquarters. We believe that these are typical benefits offered by comparable companies to executive officers who are asked to relocate and that we would be at a competitive disadvantage in trying to attract executive officers who would need to relocate in order to work for us if we did not offer such assistance. We did not provide any relocation benefits to any of our NEOs in 2019.

        ESPP.    Our NEOs may also participate in our employee stock purchase plan (the "ESPP"), which is generally available to all employees who work over 20 hours per week, so long as they own less than 5% of our common stock, including for this purpose vested and unvested stock options. Mr. Kirby participated in the ESPP in 2019.

        Perquisites.    Apart from the discussed benefits, we do not provide our NEOs with perquisites.

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Severance and Change in Control Benefits and Agreements with NEOs

        We believe providing severance and/or change in control benefits as a component of our compensation structure can help us compete for executive talent and attract and retain highly talented executive officers whose contributions are critical to our long-term success. In that regard, we periodically review our severance and/or change in control practices. In 2017, after reviewing the practices of companies in general industry surveys published by Aon Reward Solutions and consultation with Pearl Meyer, we revised our severance and change in control benefits. Accordingly, on March 7, 2017, the board of directors approved a form of Severance and Change of Control Agreement (the "Form Severance/CIC Agreement"), which subsequently the Company entered into with each of our NEOs. The severance benefits terms contained in the Form Severance/CIC Agreements entered into with each of our NEOs are controlling and superseded the severance and change of control terms provided for under any NEO's pre-existing employment agreement or employment offer letter. We believe that our severance and change in control benefits are appropriate.

Severance and Change in Control Agreements

        As discussed above, we have entered into the Form Severance/CIC Agreement with each of Messrs. Milano, Kirby, Fletcher and Lim, and Dr. Yingling.

        The Form Severance/CIC Agreement provide that if we consummate a change of control (as defined in therein), we will employ the executive for a period of 24 months from the date of the consummation of the change of control. Pursuant to the Form Severance/CIC Agreement, during such period:

(i)

the executive's position and duties for the Company will be commensurate with the most significant of the duties and positions held by the executive during the 90-day period preceding the date of the consummation of the change of control;



(ii)

the executive's annual base salary will equal at least 12 times the highest monthly base salary paid to the executive during the 12 months prior to the date of the change of control;



(iii)

the executive will be entitled to an annual bonus equal to at least the greatest of (a) the average bonus paid to the executive in respect of the three years immediately preceding the year in which the change of control occurs, (b) the annual bonus paid for the year immediately preceding the year in which the change of control occurs and (c) 100% of the target bonus for (1) the year immediately preceding the year in which the change of control occurs, (2) the year in which the change of control occurs or (3) any year following the year in which the change of control occurs and prior to the then-current year, whichever is highest; and



(iv)

the executive will be entitled to certain other benefits as are consistent with the benefits paid to the executive during the year prior to the change of control.

        The Form Severance/CIC Agreements also provide that if an executive is terminated without "cause" or resigns for "good reason" (as such terms are defined therein) in either case, within 24 months following a change of control, subject to the executive's timely execution and non-revocation of a general release of claims in a form provided by us and the executive's continued compliance with the invention, non-disclosure and non-competition agreement previously entered into in connection with the commencement of executive's employment, executives would receive a lump sum cash payment payable within 30 days after the date of termination equal to:

(i)

the executive's target bonus for the year of termination prorated for the portion of the year worked;

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(ii)

150% of the sum of (a) such executive's annual base salary for the year immediately preceding the year of termination and (b) the greatest of (1) the average bonus paid or earned and accrued, but unpaid to the executive in respect of the three years immediately preceding the year of termination, (2) the annual bonus paid for the year immediately preceding the year of termination and (3) the target bonus for the year of termination; and



(iii)

150% of the Company's share of the annual premium for group medical and/or dental insurance coverage that was in place for the executive immediately prior to the date of termination.

        In addition, all unvested options, restricted stock, restricted stock units, or stock appreciation rights held by the executive as of the date of termination will be immediately and automatically vested and/or exercisable in full as of the date of termination, and the executive will have the right to exercise any such options or stock appreciation rights for the longer of (A) the period of time provided for in the applicable equity award agreement or plan, or (B) the shorter of one year after the date of termination or the remaining term of the applicable equity award.

        If the executive is terminated without "cause" or resigns for "good reason," prior to the date of a change of control, such executive will be entitled to the following under the Form Severance/CIC Agreement, subject to the executive's timely execution and non-revocation of a general release of claims in a form provided by us and the executive's continued compliance with the invention, non-disclosure and non-competition agreement previously entered into in connection with the commencement of executive's employment:

(i)

a lump sum cash payment payable within 30 days after the date of termination in an amount equal to the greater of (x) the average bonus paid or earned and accrued, but unpaid to the executive in respect of the three years immediately preceding the year of termination, and (y) the annual bonus paid for the year immediately preceding the year of termination prorated for the portion of the year worked;



(ii)

continued payment of the executive's base salary payable in accordance with our standard payroll practices over the one-year period following termination; and



(iii)

if the executive elects to continue receiving group medical and/or dental insurance under COBRA (to the extent the executive previously participated in such group insurance plans immediately prior to the date of termination), payment by us of our share of the premium for such coverage that we pay for active and similarly-situated employees who receive the same type of coverage for the one-year period following termination.

Employment Agreements with our NEOs

        We have entered into employment agreements with our NEOs, all of which are at-will employees.

Vincent J. Milano

        We are a party to an Employment Agreement, dated as of December 1, 2014, with Mr. Milano, our President and Chief Executive Officer (the "Milano Employment Agreement"). Under the Milano Employment Agreement, Mr. Milano is entitled to receive an annual base salary of $600,000 or such higher amount as our compensation committee or our board of directors may determine. In addition, pursuant to the Milano Employment Agreement, Mr. Milano is eligible to receive an annual bonus of 50% of his base salary, subject to adjustment, based on the achievement of both individual and Company performance objectives as developed and determined by our board of directors.

        Mr. Milano's severance and change in control benefits are governed by the Form Severance/CIC Agreement.

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        On January 10, 2020, as a means suggested by Mr. Milano to help conserve cash for the Company, we entered into an Amendment to Employment Agreement with Mr. Milano (the "Milano Employment Amendment" and, together with the Milano Employment Agreement, the "Milano Agreement"), amending the Milano Employment Agreement to specify the manner in which Mr. Milano will be paid his annual base salary for the 2020 fiscal year and to make other corresponding changes. Pursuant to the Milano Employment Amendment, Mr. Milano's annual base salary of $600,000 shall be payable as follows: (i) for the period from January 1, 2020 to the January 10, 2020, $18,182 was payable in cash; and (ii) for the period immediately following the January 10, 2020 to December 31, 2020, an additional $6,600 (the "Cash Value") shall be payable in cash and $575,218 (the "RSU Value" and together with the Cash Value, the "Post-Amendment Compensation") shall be payable in the form of a restricted stock unit grant to be granted to Mr. Milano on December 18, 2020, pursuant to our 2013 Stock Incentive Plan, as amended, and in accordance with the terms and conditions set forth in a restricted stock unit agreement to be entered into between Mr. Milano and us at the time of the grant.

John J. Kirby

        We are a party to an Employment Offer Letter, dated October 15, 2015, with Mr. Kirby, our current Senior Vice President and Chief Financial Officer Finance (the "Kirby Employment Agreement"). Under the terms of the Kirby Employment Agreement, Mr. Kirby is entitled to receive an annual base salary of $225,000 or such higher amount as our compensation committee or our board of directors may determine. In addition, under the Kirby Employment Agreement, Mr. Kirby is eligible to receive an annual bonus of 30% of his base salary, subject to adjustment, based on the achievement of both individual and Company performance objectives as established by our board of directors.

        Mr. Kirby's severance and change in control benefits are governed by the Form Severance/CIC Agreement.

R. Clayton Fletcher

        We are a party to an Employment Offer Letter, dated as of January 26, 2015, with Mr. Fletcher, our Senior Vice President of Business Development and Strategic Planning (the "Fletcher Employment Agreement"). Under the terms of the Fletcher Employment Agreement, Mr. Fletcher is entitled to receive an annual base salary of $360,000 or such higher amount as our compensation committee or our board of directors may determine. In addition, under the employment letter, Mr. Fletcher is 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 as established by our board of directors.

        Mr. Fletcher's severance and change in control benefits are governed by the Form Severance/CIC Agreement.

Bryant D. Lim

        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 of directors 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 as established by our board of directors.

        Mr. Lim's severance and change in control benefits are governed by the Form Severance/CIC Agreement.

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Jonathan Yingling, Ph.D.

        Prior to his resignation on January 22, 2020, the terms of Dr. Yingling's, our former Chief Scientific Officer, were set forth in an Employment Offer Letter, dated February 2, 2017. The terms of Dr. Yingling's severance and change in control benefits were governed by the Form Severance/CIC Agreement. In connection with the Dr. Yingling's resignation, we entered into an Amendment to Severance and Change in Control Agreement with Dr. Yingling, dated as of January 27, 2020, amending the Form Severance/CIC Agreement (the "Yingling Amendment"). Under the Yingling Amendment, Dr. Yingling will provide certain consulting services to us for the one-year period following the termination of his employment and in exchange for such consulting services, (i) Dr. Yingling will be entitled to certain compensation and other benefits as set forth in the Form Severance/CIC Agreement, (ii) Dr. Yingling's equity awards issued under our 2013 Stock Incentive Plan, as amended, will continue to vest during the consulting period, and (iii) if a change of control occurs during the later of (A) the consulting period or (B) January 29, 2021, Dr. Yingling will be entitled to certain benefits as set forth in the Form Severance/CIC Agreement relating to immediate and automatic vesting and exercisability of equity awards and exercise period.

Indemnification Agreements

        On March 7, 2017, the board of directors approved a form of Indemnification Agreement to be entered into between the Company and each of our directors and officers. Each of Messrs. Milano, Kirby, Fletcher and Lim and Dr. Yingling entered into an Indemnification Agreement with the Company. In general, the Indemnification Agreements provide that the Company will indemnify the director or officer to the fullest extent permitted by law for claims arising in his or her capacity as a director or officer of the Company or in connection with their service at our request for another corporation or entity. The Indemnification Agreements also provide for procedures that will apply in the event that a director or officer makes a claim for indemnification and establish certain presumptions that are favorable to the director or officer.

Formal Clawback Policy

        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 will apply 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 awarded as compensation) during the three-year period preceding the date on which we are required to prepare an accounting restatement based on erroneous data, the excess of what would have been paid to such executive officer under the accounting restatement.

Compensation Committee Report

        The compensation committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with our management. Based on this review and discussion, the compensation committee recommended to our board of directors that the Compensation Discussion and Analysis be included in this proxy statement.

By the compensation committee of the board of directors,

Maxine Gowen, Chair
Cristina Csimma
Howard Pien

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Summary Compensation Table

        The table below summarizes compensation paid to or earned by our named executive officers for 2019, 2018, and 2017.

Summary Compensation Table

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Grants of Plan-Based Awards

        The following table sets forth information regarding grants of plan-based awards to our named executive officers during 2019.

Grants of Plan-Based Awards for Fiscal Year 2019

Outstanding Equity Awards at Fiscal Year-End

        The following table sets forth information regarding the outstanding stock options held by our named executive officers as of December 31, 2019. None of our named executive officers held shares of unvested restricted stock as of December 31, 2019.

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Outstanding Equity Awards at Fiscal Year-End