Form 4: Acadia Pharmaceuticals Directors Receive Equity Grants from 2024 Incentive Plan

Key directors affiliated with Baker Bros. Advisors, Julian C. Baker and Dr. Stephen R. Biggar, have received grants of restricted stock units and non-qualified stock options from Acadia Pharmaceuticals Inc.'s 2024 Equity Incentive Plan.

Summary

• On May 29, 2025, Julian C. Baker and Dr. Stephen R. Biggar, directors of Acadia Pharmaceuticals Inc. and representatives of Baker Bros. Advisors, were granted equity compensation.
• Each director received 8,107 Restricted Stock Units (RSUs), totaling 16,214 RSUs, which are payable solely in common stock.
• These RSUs will fully vest on the earlier of May 29, 2026, or the date of the next annual meeting of stockholders, contingent on their continuous service on the board.
• Additionally, each director was granted 13,793 Non-Qualified Stock Options, totaling 27,586 options, with a strike price of $22.29.
• These stock options vest in four equal quarterly installments starting from May 29, 2025, with the final tranche vesting upon the earlier of the one-year anniversary of the grant date or the next annual meeting of stockholders, and expire on May 28, 2035.
• The reporting persons, including Baker Bros. Advisors LP and its affiliates, disclaim beneficial ownership of these securities except to the extent of their indirect pecuniary interest.
• Following these transactions, indirect beneficial ownership of common stock by the reporting entities includes 3,658,735 and 39,365,965 shares, while Julian C. Baker and Felix J. Baker directly hold 102,876 shares each from prior distributions.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. It's a routine disclosure of director compensation, which is a positive for aligning interests, but doesn't indicate any new operational or financial performance.

Positives

• The grants of RSUs and stock options align the interests of key directors and significant shareholders (Baker Bros. Advisors) with those of the company's long-term performance.
• Equity compensation is a standard practice for incentivizing directors and retaining talent, reflecting a commitment to long-term value creation.

Future Outlook

The document indicates future vesting events for the granted RSUs and stock options, contingent on the continuous service of the directors. The RSUs are set to fully vest by May 29, 2026, or the next annual meeting, while stock options will vest quarterly over the next year.

Management Comments

• Julian C. Baker and Dr. Stephen R. Biggar serve on the Board as representatives of 667, L.P. and Baker Brothers Life Sciences, L.P. and their affiliates and control persons.
• Julian C. Baker, Felix J. Baker, Baker Bros. Advisors (GP) LLC, and Baker Bros. Advisors LP disclaim beneficial ownership of the securities held directly by or for the benefit of the Funds except to the extent of their pecuniary interest therein.
• Pursuant to the policies of Baker Bros. Advisors LP, Julian C. Baker and Dr. Biggar do not have a right to any of the Issuer's securities issued as compensation for their Board service, and the Funds are entitled to an indirect proportionate pecuniary interest in such securities.

Industry Context

Equity compensation, such as RSUs and stock options, is a common practice in the biotechnology and pharmaceutical industries to attract, retain, and incentivize key personnel, including directors, by aligning their financial interests with the long-term success and shareholder value of the company.

Comparison to Industry Standards

• The granting of restricted stock units and stock options to directors is a standard form of compensation across the biotechnology and pharmaceutical sectors, aiming to align director incentives with shareholder returns.
• The vesting schedules (one year for RSUs, quarterly for options over a year) are typical for director equity grants, promoting sustained engagement and long-term commitment.
• The strike price of $22.29 for the options reflects the market price at the time of grant, which is a common practice for non-qualified stock options.

Corporate Governance

Related Party Transactions

• The grants of RSUs and stock options were made to Julian C. Baker and Dr. Stephen R. Biggar, who are directors of Acadia Pharmaceuticals Inc. and also affiliated with Baker Bros. Advisors LP, a significant 10% owner of the company. This represents compensation to individuals associated with a major shareholder.
• The footnotes clarify that the Baker Bros. entities and individuals disclaim direct beneficial ownership, but acknowledge an indirect pecuniary interest in these securities through their ownership interests in the Funds (667, L.P. and Baker Brothers Life Sciences, L.P.).

Stakeholder Impact

• **Shareholders**: The grants represent a form of dilution as new shares will be issued upon vesting and exercise, but also serve to align the interests of key directors with long-term shareholder value.
• **Employees**: While the grants are to directors, the use of an equity incentive plan can signal a broader commitment to performance-based compensation, potentially impacting employee morale and retention strategies.

Next Steps

• Continued service of Julian C. Baker and Dr. Stephen R. Biggar on the board of directors of Acadia Pharmaceuticals Inc.
• Vesting of 8,107 RSUs for each director on the earlier of May 29, 2026, or the date of the next annual meeting of stockholders.
• Quarterly vesting of 13,793 stock options for each director, starting May 29, 2025, with the final tranche vesting upon the earlier of the one-year anniversary of the grant date or the next annual meeting of stockholders.

Key Dates

Keywords

Acadia Pharmaceuticals, ACAD, SEC Form 4, Insider Trading, Equity Compensation, Restricted Stock Units, Stock Options, Director Compensation, Baker Bros. Advisors, Biotechnology, Pharmaceuticals