Form 4: Neumora Therapeutics CFO's Stock Options Repriced Following Shareholder Approval

Neumora Therapeutics, Inc. shareholders approved the repricing of stock options held by Chief Financial Officer Michael Lee Milligan, significantly lowering the exercise price from $1.69 to $0.72 per share.

Summary

• On May 28, 2025, Neumora Therapeutics, Inc. (NMRA) stockholders approved the repricing of outstanding stock options held by Michael Lee Milligan, the company's Chief Financial Officer and Principal Accounting Officer.
• The exercise price for these options was reduced from $1.69 per share to $0.72 per share.
• The repricing applies to a total of 593,550 shares underlying various stock options previously granted to Mr. Milligan.
• The repricing is contingent upon Mr. Milligan remaining in service to Neumora Therapeutics through August 13, 2026.
• The affected options have various vesting commencement dates ranging from December 20, 2021, to February 13, 2025, with standard vesting schedules of 25% on the first anniversary and 1/48th monthly thereafter over four years.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative from a broader market perspective because option repricing often signals past stock underperformance. While positive for the executive's incentive, it reflects a need to adjust compensation due to a decline in share value.

Positives

• The repricing makes the stock options more 'in-the-money' or reduces the barrier to exercise for the Chief Financial Officer, potentially increasing the incentive for long-term commitment and performance.
• It aligns the executive's incentives with potential future stock price appreciation from the current lower valuation.

Negatives

• Option repricing typically occurs when a company's stock price has significantly declined, indicating past underperformance and that previously granted options are 'underwater' (exercise price is higher than current market price).
• While not explicitly stated, the need for repricing suggests a lack of confidence in the stock reaching its previous highs in the near term, or a need to re-incentivize management due to poor stock performance.

Risks

• The repricing could be perceived negatively by investors as it often signals past stock underperformance.
• If the repriced options are exercised, it could lead to increased share dilution, impacting existing shareholders' ownership percentage.
• The condition of the Reporting Person remaining in service until August 13, 2026, ties the benefit to continued employment, but also highlights a potential retention risk if the condition is not met.

Future Outlook

The repricing of stock options is subject to the Chief Financial Officer remaining in service to Neumora Therapeutics through August 13, 2026, indicating a strategic move to retain key executive talent and align their long-term incentives with the company's future performance at a revised valuation.

Management Comments

• "On May 28, 2025, the Issuer's stockholders approved the repricing of the option. As further described in footnote 7, all other terms of the option remain unchanged."
• "On May 28, 2025, the Issuer's stockholders approved an option repricing at an exercise price of $0.72 per share (the 'Repricing') of the outstanding stock options held by members of the Board, certain employees and other service providers. The Repricing is subject to the Reporting Person remaining in service to the Issuer through August 13, 2026."

Industry Context

Option repricing is a common practice in the biotechnology and pharmaceutical industries, particularly for companies whose stock price has experienced significant declines. It is often used as a mechanism to re-incentivize and retain key executives and employees when their existing stock options are 'underwater,' ensuring their compensation remains competitive and aligned with the company's current valuation and future prospects. This practice aims to prevent talent drain and maintain motivation during challenging market conditions.

Comparison to Industry Standards

• Option repricing is a recognized, albeit sometimes controversial, compensation tool in the biotech sector, especially for companies that have seen their stock price fall significantly below previous option strike prices.
• While specific comparable companies or projects are not detailed in this filing, such repricings are typically observed in companies facing market capitalization challenges or those in early-to-mid-stage development where stock volatility is higher.
• The reduction from $1.69 to $0.72 represents a substantial decrease in the exercise price, which is common in repricing events where the stock has traded well below its previous highs.

Corporate Governance

Stakeholder Impact

• **Shareholders:** Potential for increased dilution if the repriced options are exercised. The repricing itself may signal past stock underperformance, which could concern existing shareholders.
• **Employees/Executives (specifically CFO):** The repricing provides a significant incentive, making their options more valuable and potentially increasing their motivation and retention, especially for Michael Lee Milligan.
• **Creditors:** No direct impact mentioned in this filing.

Next Steps

• The Chief Financial Officer, Michael Lee Milligan, must remain in service to Neumora Therapeutics through August 13, 2026, for the repricing to be effective.
• The repriced stock options will continue to vest according to their original schedules, with 25% vesting on the first anniversary of their respective Vesting Commencement Dates and 1/48th monthly thereafter.

Key Dates

Keywords

Neumora Therapeutics, NMRA, Stock Option Repricing, Executive Compensation, Form 4, Insider Transaction, Michael Lee Milligan, Chief Financial Officer, Corporate Governance, Shareholder Approval