DEF 14A: Regulus Therapeutics Seeks Stockholder Approval for Amended Equity Incentive Plan and Director Elections at Upcoming Annual Meeting

Regulus Therapeutics is holding its annual meeting on May 16, 2024, to vote on director elections, executive compensation, auditor ratification, and an amendment to the equity incentive plan.

Summary

• Regulus Therapeutics Inc. is holding its 2024 Annual Meeting of Stockholders on May 16, 2024, at its principal executive offices in San Diego.
• Stockholders will vote on several key proposals, including the election of ten director nominees, ratification of Ernst & Young LLP as the independent registered public accounting firm, and an advisory vote on executive compensation.
• A significant proposal involves amending the Regulus Therapeutics Inc. 2019 Equity Incentive Plan to increase the number of shares available for issuance by 9,500,000 and modify the calculation of the annual automatic share reserve increase.
• The record date for the annual meeting is April 18, 2024, with 65,465,251 shares of common stock outstanding and entitled to vote.
• The company intends to first mail these proxy materials on or about April 24, 2024.
• The Board of Directors recommends voting for all director nominees, for the ratification of Ernst & Young LLP, for the approval of executive compensation, and for the approval of the amendment to the 2019 Equity Incentive Plan.
• The Board of Directors recommends a vote of one year for the advisory vote on the frequency of holding stockholder advisory votes on the compensation of the Company's named executive officers.

Sentiment

Score: 7

Explanation: The document is a standard proxy statement, presenting information in a neutral and factual manner. The sentiment is slightly positive due to the recommendations for key proposals that could benefit the company's long-term growth.

Positives

• The proposed amendment to the 2019 Equity Incentive Plan aims to provide competitive equity incentives to attract and retain key talent.
• The Board of Directors is actively engaged in overseeing risk management processes, including financial, legal, and cybersecurity risks.
• The company has a Code of Business Conduct and Ethics in place for all directors, officers, and employees.
• The company has a hedging policy in place that prohibits officers, directors, employees and consultants from engaging in short sales, transactions in put or call options, hedging transactions or other inherently speculative transactions with respect to the Company's stock at any time.

Risks

• Failure to secure stockholder approval for the proposed amendment to the 2019 Equity Incentive Plan could limit the company's ability to attract and retain key personnel.
• The company's success depends on its ability to advance RGLS8429 for the treatment of ADPKD and its preclinical programs.
• The company faces risks associated with clinical trials, regulatory approvals, and competition in the biopharmaceutical industry.
• The company's insider trading and window period policy provides that no officer, director, other employee or consultant of the Company may margin, or make any offer to margin, any of the Company's stock, including without limitation, borrowing against such stock, at any time.

Future Outlook

The company expects to conduct its next say-on-pay vote at its 2025 annual meeting of stockholders, assuming stockholders approve the One Year option as the frequency of future say-on-pay votes under Proposal 4.

Management Comments

• The Board believes that separation of the positions of Chair and Chief Executive Officer reinforces the independence of the Board of Directors from management.
• The Compensation Committee is committed to providing the information necessary to help stockholders understand its executive compensation-related decisions.

Industry Context

This announcement is typical for publicly traded companies as they prepare for their annual meetings, outlining the key proposals and seeking stockholder votes on important corporate governance matters.

Comparison to Industry Standards

• The peer group of companies used by the Compensation Committee in making 2023 executive compensation decisions was comprised of the following companies: Adial Pharmaceuticals (ADIL), Assembly* Biosciences (ASMB) aTyr Pharma(LIFE), BioCardia(BCDA), Calithera* Bioscience(CALA), Capricor Therapeutics (CAPR), Cidara Therapeutics (CDTX), CohBar (CWBR), ContraFect (CFRX), CorvusPharmaceuticals(CRVS), DarBioscience(DARE), Eledon Pharmaceuticals(ELDN), Infinity Pharmaceuticals (INFI), Lineage Cell Therapeutics (LCTX), Otonomy (OTIC), Pulmatrix(PULM), Rezolute* (RZLT) Synlogic(SYBX), Tenax Therapeutics (TENX), TRACON Pharmaceuticals (TCON).
• This peer group was recommended by Aon/Radford and approved by the Compensation Committee in late-2022 based on the following parameters: biopharmaceutical companies that were pre-commercial and with programs in early clinical development, had market values generally under $200 million and with a preference for companies with headcounts under 100.

Related Party Transactions

• On April 13, 2023, we entered into a Securities Purchase Agreement (the 2023 Purchase Agreement) with certain institutional and other accredited investors, pursuant to which we agreed to sell and issue shares of common stock and shares of our newly designated non-voting Class A-5 convertible preferred stock (the 2023 Private Placement).
• On April 14, 2023, we completed the closing of the 2023 Private Placement (the 2023 Closing) pursuant to which we sold and issued (i) 2,615,536 shares of common stock at a purchase price of $0.9001 per share, and (ii) 140,827 shares of non-voting Class A-5 convertible preferred stock, in lieu of shares of common stock, at a price of $90.01 per share.
• On March 11, 2024, we entered into a Securities Purchase Agreement (the 2024 Purchase Agreement) with certain institutional and other accredited investors, pursuant to which we agreed to sell and issue shares of common stock and shares of our newly designated non-voting convertible preferred stock (the 2024 Private Placement).
• On March 14, 2024, we completed the closing of the 2024 Private Placement (the 2024 Closing) pursuant to which we sold and issued (i) 45,108,667 shares of common stock at a purchase price of $1.60 per share, and (ii) 173,915 shares of non-voting Class A-6 convertible preferred stock, in lieu of shares of common stock, at a price of $160.00 per share.

Stakeholder Impact

• Approval of the equity incentive plan amendment could positively impact employees and directors by providing them with additional equity-based compensation opportunities.
• The outcome of the votes on director elections and executive compensation could influence investor confidence and the company's stock price.
• The ratification of the independent auditor ensures the integrity of the company's financial reporting.

Next Steps

• Stockholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will announce the voting results following the annual meeting in a Form 8-K filing.

Key Dates

Keywords

Equity Incentive Plan, Annual Meeting, Director Election, Executive Compensation, Proxy Statement, Stockholders, Regulus Therapeutics, Auditor Ratification