Form 4: TScan Therapeutics Grants 67,000 Stock Options to Director Stephen Biggar, Indirectly Benefiting Baker Bros. Funds

TScan Therapeutics, Inc. has granted 67,000 non-qualified stock options to director Dr. Stephen R. Biggar, with an exercise price of $1.45 per share, vesting on the earlier of one year or the next annual meeting, and indirectly benefiting Baker Bros. investment funds.

Summary

• TScan Therapeutics, Inc. granted 67,000 non-qualified stock options to Dr. Stephen R. Biggar, a director and employee of Baker Bros. Advisors LP, on June 30, 2025.
• The stock options have a strike price of $1.45 per share and are set to expire on June 29, 2035.
• Vesting for these options will occur on the earlier of the first anniversary of the grant date (June 30, 2026) or the date of the next annual meeting of stockholders, contingent on Dr. Biggar's continued service on the board of directors.
• While granted to Dr. Biggar, the pecuniary interest in these options is indirectly held by 667, L.P. and Baker Brothers Life Sciences, L.P. (referred to as 'the Funds') due to Baker Bros. Advisors LP's policies.
• Julian C. Baker and Felix J. Baker are deemed to have an indirect pecuniary interest in these options through their ownership interests in the general partners of the Funds.
• Baker Bros. Advisors LP, acting as the investment adviser, maintains complete and unlimited discretion and authority over the investment and voting power of these securities.

Sentiment

Score: 7

Explanation: The grant of stock options to a director, particularly one representing a significant investor like Baker Bros., is generally a positive signal, indicating alignment of interests and confidence in future performance. The low strike price offers significant upside potential. There are no negative disclosures.

Positives

• The granting of stock options to a director aligns the director's interests with shareholder value, as the options become more valuable if the stock price increases above the strike price.
• The strike price of $1.45 per share is relatively low, indicating potential for significant upside if the company's stock performs well over the option's lifespan.

Future Outlook

The vesting schedule indicates an expectation of Dr. Biggar's continued service on the board, aligning his long-term interests with the company's performance. The options' expiration in 2035 suggests a long-term view on potential stock appreciation.

Management Comments

• Dr. Stephen R. Biggar, a full-time employee of Baker Bros. Advisors LP, is a director of TScan Therapeutics, Inc. (the 'Issuer').
• By virtue of their representation on the board of directors of the Issuer, for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, the reporting persons are deemed directors by deputization of the Issuer.
• Pursuant to the policies of the Adviser, Dr. Biggar does not have a right to any of the Issuer's securities issued as compensation for his service on the Board and the Funds are entitled to an indirect proportionate pecuniary interest in such securities.

Industry Context

Stock option grants are a common form of executive and director compensation in the biotechnology and pharmaceutical industries, aiming to incentivize long-term value creation. Baker Bros. Advisors is a prominent investment firm specializing in life sciences, and their continued involvement and compensation structure for their representatives on portfolio company boards is typical.

Comparison to Industry Standards

• The grant of 67,000 non-qualified stock options to a director is a standard practice in the biotech industry for aligning director incentives with shareholder interests.
• The strike price of $1.45, if it reflects the market price at the time of grant, is typical for at-the-money options.
• The 10-year expiration period (until June 29, 2035) is a common duration for employee and director stock options, providing a long window for potential value realization.
• The vesting schedule (earlier of one year or next annual meeting) is also a standard approach to ensure continued service and commitment.

Corporate Governance

Related Party Transactions

• The grant of stock options to Dr. Stephen R. Biggar, a director who is also a full-time employee of Baker Bros. Advisors LP, which is a significant shareholder and has other representatives on the board, constitutes a related party transaction.
• The indirect pecuniary interest in these options flows to 667, L.P. and Baker Brothers Life Sciences, L.P., which are investment funds advised by Baker Bros. Advisors LP, further highlighting the related party nature.

Stakeholder Impact

• Shareholders: The grant aligns the interests of a key director (and indirectly, a major institutional investor) with shareholder value creation, potentially leading to better long-term performance.
• Employees: No direct impact on general employees, but it highlights the compensation structure for board members.

Next Steps

• The stock options will vest on the earlier of June 30, 2026, or the date of the next annual meeting of stockholders, subject to Dr. Biggar's continued service.
• The options can be exercised at any time after vesting until their expiration on June 29, 2035.

Key Dates

Recommendation

Keywords

TScan Therapeutics, TCRX, Stock Options, Non-Qualified Stock Options, Director Compensation, Insider Trading, SEC Form 4, Baker Bros. Advisors, Equity Incentive Plan, Beneficial Ownership, Biotechnology, Pharmaceuticals