Form 4: Acrivon Therapeutics Director Derek DiRocco Granted Stock Options, Disclaims Beneficial Ownership for RA Capital Funds

Acrivon Therapeutics, Inc. Director Derek DiRocco was granted 20,275 stock options with an exercise price of $1.2, though he disclaims beneficial ownership as the options are held for the benefit of RA Capital Healthcare Fund and RA Capital Nexus Fund II.

Summary

• Derek DiRocco, a Director of Acrivon Therapeutics, Inc. (ACRV), was granted 20,275 stock options on June 13, 2025.
• The exercise price for these options is $1.2 per share.
• The options are set to vest on the date immediately preceding the Issuer's next annual meeting of stockholders, contingent on DiRocco's continuous service.
• The expiration date for these stock options is June 12, 2035.
• DiRocco disclaims beneficial ownership of these options and the underlying common stock, as they are held for the benefit of RA Capital Healthcare Fund, L.P. and RA Capital Nexus Fund II, L.P.
• He is obligated to transfer any net cash or stock received from exercising the options to RA Capital Management, L.P., which will offset advisory fees owed by the aforementioned funds.

Sentiment

Score: 6

Explanation: The document reports a routine stock option grant to a director, which is a neutral event. The disclaimer of beneficial ownership due to an arrangement with RA Capital is a specific detail that doesn't inherently indicate positive or negative sentiment for the company's operations, but rather clarifies the nature of the director's compensation.

Positives

• The grant of stock options to a director aligns with standard compensation practices, potentially incentivizing long-term commitment to the company's success.
• The options have a long expiration date (June 12, 2035), providing a significant window for potential value realization.

Negatives

• The disclaimer of beneficial ownership by the director, while a specific arrangement with RA Capital, means the director does not personally benefit from the options in the traditional sense, which might be perceived as less direct alignment of personal financial interest with the company's stock performance compared to direct ownership.

Risks

• The vesting of the options is contingent on the reporting person's continuous service, meaning the options could be forfeited if service is terminated before vesting.
• The value of the stock options is subject to the future market price of Acrivon Therapeutics, Inc. common stock, which could be lower than the exercise price, rendering the options worthless.

Future Outlook

The vesting schedule indicates that the options will vest prior to the company's next annual meeting of stockholders, contingent on the director's continued service, aligning future compensation with ongoing contributions.

Management Comments

• The shares subject to the option shall vest on the date immediately preceding the date of the Issuer's next annual meeting of stockholders, subject to the Reporting Person's continuous service through the applicable vesting date.
• Under the Reporting Person's arrangement with RA Capital Management, L.P. (the 'Adviser'), the Reporting Person holds the stock option for the benefit of RA Capital Healthcare Fund, L.P. (the 'Fund') and RA Capital Nexus Fund II, L.P. (the 'Nexus Fund II').
• The Reporting Person is obligated to turn over to the Adviser any net cash or stock received upon exercise of the stock option, which will offset advisory fees owed by the Fund and the Nexus Fund II.
• The Reporting Person therefore disclaims beneficial ownership of the stock option and underlying Common Stock.

Industry Context

The grant of stock options is a common form of equity compensation in the biotechnology and pharmaceutical industries, used to attract and retain talent, particularly directors and executives, and align their interests with long-term shareholder value. The specific arrangement with RA Capital Management highlights the involvement of institutional investors in corporate governance and compensation structures.

Comparison to Industry Standards

• The grant of stock options to directors is a standard practice across many industries, including biotechnology, as a component of non-employee director compensation.
• The exercise price of $1.2, while specific to this grant, would typically be set at or above the fair market value of the stock on the grant date, which is a common industry standard for incentive stock options.
• The vesting schedule tied to continuous service and the next annual meeting is a typical mechanism to ensure ongoing commitment.
• The arrangement where the director holds the options for the benefit of specific funds (RA Capital) and disclaims beneficial ownership is less common for individual director compensation but reflects a specific agreement between the director and the investment firm they represent, which is a unique aspect of this particular grant. This type of arrangement is more common when a director is appointed as a representative of a significant institutional investor.

Related Party Transactions

• The stock option is held by Derek DiRocco for the benefit of RA Capital Healthcare Fund, L.P. and RA Capital Nexus Fund II, L.P., with proceeds offsetting advisory fees owed by these funds to RA Capital Management, L.P. This constitutes a related party transaction given DiRocco's affiliation with RA Capital.

Stakeholder Impact

• Shareholders: The grant of options dilutes existing shares upon exercise, but also serves as a form of compensation to align director interests with long-term company performance. The specific arrangement with RA Capital means the director's personal financial incentive is indirect.

Next Steps

• The options are expected to vest on the date immediately preceding the Issuer's next annual meeting of stockholders.
• The reporting person is obligated to turn over any net cash or stock received upon exercise to RA Capital Management, L.P.

Key Dates

Recommendation

Keywords

Acrivon Therapeutics, ACRV, SEC Form 4, Stock Option Grant, Insider Transaction, Director Compensation, RA Capital Management, Beneficial Ownership, Equity Compensation, Biotechnology, Pharmaceuticals