alks-10ka_20211231.htm
Alkermes plc. 0001520262 true --12-31 FY 0001520262 2021-01-01 2021-12-31 iso4217:USD 0001520262 2021-06-30 xbrli:shares 0001520262 2022-04-22

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K/A

(Amendment No. 1)

 

(Mark One)

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the fiscal year ended December 31, 2021

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                         

 

Commission file number: 001-35299

ALKERMES PUBLIC LIMITED COMPANY

(Exact name of registrant as specified in its charter)

 

 

 

 

Ireland

(State or other jurisdiction of incorporation or organization)

 

98-1007018

(I.R.S. Employer Identification No.)

Connaught House

1 Burlington Road

Dublin 4, Ireland
(Address of principal executive offices)

 

D04 C5Y6

(Zip code)

 

 

+353-1-772-8000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Ordinary shares, $0.01 par value

 

ALKS

 

Nasdaq Global Select Market

 

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well‑known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes   No 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes   No 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S‑T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

 

Large Accelerated Filer

 

                  Accelerated Filer

Non-Accelerated Filer

 

Smaller Reporting Company

 

 

Emerging Growth Company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Act). Yes   No 

The aggregate market value of the registrant’s ordinary shares held by non‑affiliates of the registrant (without admitting that any person whose shares are not included in such calculation is an affiliate) computed by reference to the price at which the ordinary shares were last sold as of the last business day of the registrant’s most recently completed second fiscal quarter was $3,918,149,321.

As of April 22, 2022, 163,426,943 ordinary shares were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

Auditor Firm Id:

238

Auditor Name:

PricewaterhouseCoopers LLP

Auditor Location:

Boston, Massachusetts

 


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EXPLANATORY NOTE

 

This Amendment No. 1 to Annual Report on Form 10-K/A (this “Amendment”), amends the Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (Commission File Number 001-35299), as filed by the registrant with the U.S. Securities and Exchange Commission (the “SEC”) on February 16, 2022 (the “2021 Annual Report”). The principal purpose of this Amendment is to amend Part III of the 2021 Annual Report to include the information that was intended to be incorporated therein by reference to the registrant’s definitive proxy statement for its 2022 annual general meeting of shareholders, and to update certain of the information included on the cover page of the 2021 Annual Report and in the list of exhibits included and Item 15 of the Exhibit Index of the 2021 Annual Report. This Amendment hereby amends the cover page, Part III (Items 10 through 14) and Part IV (Item 15) of the 2021 Annual Report. In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), new certifications by the registrant’s principal executive officer and principal financial officer are filed as exhibits to this Amendment.

 

No attempt has been made in this Amendment to modify or update the other disclosures presented in the 2021 Annual Report. This Amendment does not reflect events occurring after the filing of the 2021 Annual Report (i.e., those events occurring after February 16, 2022) or modify or update those disclosures that may be affected by subsequent events. Accordingly, this Amendment should be read in conjunction with the 2021 Annual Report and the registrant’s other filings with the SEC.

 

 

 

 


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ALKERMES PLC AND

SUBSIDIARIES

 

Amendment No.1 TO

ANNUAL REPORT ON FORM 10‑K

FOR THE YEAR ENDED DECEMBER 31, 2021

 

INDEX

 

 

 

 

 

 

 

 

 

 

 

PART III

 

 

 

 

Item 10.

 

Directors, Executive Officers and Corporate Governance

 

4

Item 11.

 

Executive Compensation

 

13

Item 12.

 

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

51

Item 13.

 

Certain Relationships and Related Transactions, and Director Independence

 

55

Item 14.

 

Principal Accounting Fees and Services

 

56

PART IV

 

 

 

 

Item 15.

 

Exhibits and Financial Statement Schedules

 

57

SIGNATURES

 

65

 

 

 

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Cautionary Note Concerning Forward-Looking Statements

This document contains and incorporates by reference “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. In some cases, these statements can be identified by the use of forward-looking terminology such as “may,” “will,” “could,” “should,” “would,” “expect,” “anticipate,” “continue,” “believe,” “plan,” “estimate,” “intend,” or other similar words.

Actual results might differ materially from those expressed or implied by these forward-looking statements because these forward-looking statements are subject to risks, assumptions and uncertainties. These risks, assumptions and uncertainties, and other material risks to our business are discussed in “Part I, Item 1A—Risk Factors” in the 2021 Annual Report.  In light of these risks, assumptions and uncertainties, the forward-looking expectations discussed in this Amendment might not occur. You are cautioned not to place undue reliance on the forward-looking statements in this Amendment, which speak only as of the date of this Amendment. All subsequent written and oral forward-looking statements concerning the matters addressed in this Amendment and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except as required by applicable law or regulation, we do not undertake any obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Note Regarding Company and Product References

We are a fully-integrated, global biopharmaceutical company that applies our scientific expertise and proprietary technologies to research, develop and commercialize, both with partners and on our own, pharmaceutical products that are designed to address unmet medical needs of patients in major therapeutic areas. We have a portfolio of proprietary commercial products focused on alcohol dependence, opioid dependence, schizophrenia and bipolar I disorder, and a pipeline of product candidates in development for neurodegenerative disorders and cancer. Headquartered in Dublin, Ireland, we have a research and development (“R&D”) center in Waltham, Massachusetts; an R&D and manufacturing facility in Athlone, Ireland; and a manufacturing facility in Wilmington, Ohio. Use of terms such as “us,” “we,” “our,” “Alkermes” or the “Company” in this Amendment is meant to refer to Alkermes plc and its consolidated subsidiaries. Except as otherwise suggested by the context, (a) references to “products” or “our products” in this Amendment include our marketed products, marketed products using our proprietary technologies, our licensed products, our product candidates and product candidates using our proprietary technologies and (b) references to the “biopharmaceutical industry” in this Amendment are intended to include reference to the “biotechnology industry” and/or the “pharmaceutical industry”.

Note Regarding Trademarks

We are the owner of various United States (“U.S.”) federal trademark registrations (“®”) and other trademarks (“TM”), including ALKERMES®, Alkermes Inspiration Grants®, ARISTADA®, ARISTADA INITIO®, LYBALVI® and VIVITROL®. Other trademarks, trade names and service marks appearing in this Amendment are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Amendment are referred to without the ® and TM symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

 

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

Board of Directors

Director Biographical Information

The following descriptions set forth certain biographical information regarding each member of the Company’s board of directors (the “Board”), including their respective ages as of the date of this Amendment and information regarding their business experience and specific qualifications and skills that qualify them to serve on the Board.

Emily Peterson Alva

Age: 47

Experience: Ms. Alva is an experienced financial, strategic and business advisor to founders and leadership teams of growth companies. She previously served as an investment banker at Lazard, a financial advisory and asset management firm, where she worked from 1997 to 2013, most recently as an M&A Partner. During her Lazard tenure, Ms. Alva advised corporate boards and leadership teams on corporate strategy initiatives. Ms. Alva is currently on the boards of directors of Amneal Pharmaceuticals, Inc., a public pharmaceutical company, Robotic Research, LLC, a private autonomous technology company, and the Mission Society of New York City. She is also a corporate board partner with the Nasdaq Center for Board Excellence and a member of PathNorth, the NextGen Board Leaders, the EY Audit Committee Leaders and Extraordinary Women on Boards. Ms. Alva received a B.A. in Economics from Barnard College, Columbia University.

Qualifications and Skills: Ms. Alva brings to our Board more than two decades of experience leading transactions and strategic evaluations for boards and leadership teams of large global companies and growth companies across many sectors, including specific expertise in healthcare and pharmaceuticals. The Board benefits from her financial, business development, transactional and strategic expertise, her experience serving on public and private company boards and her experience and insights in a variety of corporate governance matters.

Director since: May 2021*

Current Public Company Boards:

Amneal Pharmaceuticals, Inc. (NYSE: AMRX) since May 2018

* Ms. Alva was appointed to the Board in connection with an agreement entered into between the Company and shareholder Elliott Advisors (UK) Limited and its affiliates in December 2020.

 

 

David W. Anstice AO

Age: 73

Experience: Mr. Anstice served as Executive Vice President of Merck & Co., Inc. (“Merck”) from 2006 until his retirement in 2008, with responsibility for enterprise strategy and implementation. During separate parts of this period he served as acting President, Global Human Health and as President of Merck’s business in Japan. Prior to that, Mr. Anstice served as President of Merck from 2003 to 2006, with responsibility for Merck’s Asia Pacific businesses. In his 34 years with Merck, he held a variety of positions including President, U.S. Human Health; President, Human Health, the Americas; President, U.S./Canada; and President, Human Health, Europe. He reported to the Chief Executive Officer of Merck from 1994 until his retirement in 2008. Mr. Anstice currently serves as a non-executive director of NeuClone Pharmaceuticals Pty Ltd., an unlisted clinical-stage biopharmaceutical company based in Australia. Mr. Anstice previously served as a non-executive director of CSL Limited, a global biopharmaceutical company, from September 2008 until October 2018, and as a member of the board of the University of Sydney USA Foundation. He is currently an Adjunct Professor at the University of Sydney Business School.

Qualifications and Skills: Mr. Anstice’s lengthy service with Merck, which included oversight of, and responsibility for, all aspects of pharmaceutical drug development and commercialization in the U.S. and in many countries outside the U.S., provides our Board with broad global research-based pharmaceutical industry experience. Mr. Anstice’s prior leadership positions in industry organizations, including as a board and executive committee member of the Biotechnology Innovation Organization (“BIO”) for approximately ten years and as a former Chairman of the National Pharmaceutical Council, augment his pharmaceutical management, industry knowledge and organizational expertise with knowledge of public policy issues involving pharmaceutical care. Mr. Anstice also has expertise in the areas of strategic planning, risk management and corporate governance.

 

Director since: September 2011

Current Public Company Boards: None

 

 

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Shane M. Cooke

Age: 59

Experience: Mr. Cooke served as our President and as President of Alkermes Pharma Ireland Limited (“APIL”), a wholly-owned subsidiary of the Company, from September 2011 until his retirement in March 2018. He became a member of our Board upon his retirement. In addition, Mr. Cooke has been chairman of the board of directors of APIL since September 2011. Mr. Cooke served as Executive Vice President of Elan Corporation, plc (“Elan”) and Head of Elan Drug Technologies from May 2007 to September 16, 2011 and as the Chief Financial Officer of Elan from July 2001 until May 2011. Mr. Cooke served as a director of Elan from May 2005 to September 16, 2011. Prior to joining Elan, Mr. Cooke was Chief Executive of Pembroke Capital Limited, an aviation leasing company, and prior to that, he held a number of senior finance positions in the banking and aviation industries. Mr. Cooke previously served on the board of directors of UDG Healthcare plc, formerly a publicly-traded healthcare company, from February 2019 to August 2021. He is a chartered accountant.

Qualifications and Skills: Mr. Cooke is an Irish citizen, resident in Ireland. His depth of experience in managing Irish corporate entities and his extensive network within the Irish business and finance community, as well as his familiarity with Irish policy and regulation, are highly beneficial to the Company as an Irish-incorporated entity. In addition to Mr. Cooke’s global experience in the pharmaceutical industry, he also has significant experience in business development and transactional activities. Mr. Cooke’s substantial experience as an executive in the biopharmaceutical industry, including having served as a chief financial officer and as a president of publicly-traded companies, brings strategic leadership attributes and expertise in operations, finance, and commercial management to our Board.

Director since: March 2018

Current Public Company Boards:

Prothena Corporation plc (Nasdaq: PRTA) since 2012

Endo International plc (Nasdaq: ENDP) since 2014

 

 

David A. Daglio, Jr.

Age: 55

Experience: Mr. Daglio most recently served as a non-executive director of Mellon Investments Corporation, a global investment manager (“Mellon”), from 2019 to January 2020 and as Executive Vice President, Chief Investment Officer and Executive Director of Mellon from 2017 to 2019. He also served as Mellon’s head of Opportunistic Value Strategies. Since joining Mellon in 1998, Mr. Daglio worked with institutional clients and boards around the world, managed numerous investors and grew portfolio assets by more than five-fold, and helped to design, launch, and manage a unique equity investing approach. Prior to his investing career, Mr. Daglio was a management consultant at Deloitte and an engineer for The Dannon Company. Mr. Daglio previously served as a director of The Boston Company and Mellon. Mr. Daglio earned a bachelor’s degree in mechanical engineering from Rensselaer Polytechnic Institute and a Master of Business Administration from New York University’s Stern School of Business.

Qualifications and Skills: Mr. Daglio brings to our Board a seasoned institutional investment management perspective and strong management and leadership experience. The Board benefits from his experience in portfolio management, value creation, and transactional matters, and from his service on other boards of directors, including his current service on the board of directors and remuneration committee of Total Brain Ltd.

Director since: December 2020

Current Public Company Boards:

Total Brain Ltd. (ASX:TTB) since January 2020

 

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Wendy L. Dixon, Ph.D.

Age: 66

Experience: Dr. Dixon has extensive experience in the pharmaceutical and biotechnology industries, combining a technical background with experience in drug development, regulatory affairs and marketing, and has directed the launch and growth of more than twenty pharmaceutical products. Dr. Dixon was Chief Marketing Officer and President, Global Marketing for Bristol-Myers Squibb and served on its Executive Committee from 2001 to 2009. She was Senior Vice President, Marketing at Merck from 1996 to 2001 and, prior to that, held executive management positions at West Pharmaceuticals, Osteotech and Centocor and various positions in marketing, regulatory affairs, project management and as a biochemist at SmithKline and French (now GlaxoSmithKline). Dr. Dixon was formerly on the boards of directors of then-public companies Ardea Biosciences, Inc., Dentsply International, Furiex Pharmaceuticals and Orexigen Therapeutics, Inc. during various periods from 2005 to 2016, and more recently on the boards of directors of public biopharmaceutical companies bluebird bio, Inc. from 2013 to November 2021, Sesen Bio, Inc. (formerly Eleven Biotherapeutics, Inc.) from 2014 to February 2020 and Voyager Therapeutics, Inc. from January 2017 to January 2021. She is also the principal of Great Meadow Consultancy. She was a Senior Advisor to The Monitor Group, now Deloitte, from 2010 to 2012.

Qualifications and Skills: Dr. Dixon brings to our Board a depth of experience in the global marketing of pharmaceutical products across a broad variety of disease states. Dr. Dixon has a strong technical background, direct experience in product development and regulatory affairs, and has successfully built and grown commercial organizations in the U.S. and Europe, all of which provide valuable insight to our Board regarding the development and commercialization of pharmaceutical products. Dr. Dixon’s additional qualifications include her deep industry knowledge and her reputation as a strategic thinker with a focus on execution, as well as her ability to provide direction regarding improvements to the interface between research and development and marketing. Dr. Dixon’s service on other company boards of directors provides experience relevant to corporate governance practices.

Director since: September 2011

Current Public Company Boards:

Arvinas, Inc. (Nasdaq: ARVN) since June 2020

Black Diamond Therapeutics, Inc. (Nasdaq: BDTX) since April 2022

Incyte Corporation* (Nasdaq: INCY) since 2010

* Dr. Dixon has announced her retirement from the board of directors of Incyte Corporation, effective at the time of its 2022 annual meeting of stockholders.

 

 

Richard B. Gaynor, M.D.

Age: 72

Experience: Since May 2020, Dr. Gaynor has served as President, Chief of Research and Development at BioNTech US Inc. (f/k/a Neon Therapeutics, Inc. (“Neon”)), a wholly-owned subsidiary of BioNTech SE focused on the development of novel neoantigen-targeted T cell therapies. Dr. Gaynor had previously served as President of Research and Development at Neon since November 2016. Prior to joining Neon, Dr. Gaynor held roles in clinical development and medical affairs at Eli Lilly and Company (“Lilly”) from August 2002 to October 2016, including serving as Senior Vice President, Clinical Development and Medical Affairs of Lilly Oncology. During his time at Lilly, Dr. Gaynor chaired the Lilly Oncology Research and Development Committee and helped oversee various collaborations, including with General Electric, AstraZeneca, Merck and Bristol-Myers Squibb. Dr. Gaynor started his career in academia, initially serving on the faculty at UCLA School of Medicine, followed by eleven years at the University of Texas Southwestern Medical School, during which he spent time as the Chief of Hematology-Oncology and Director of the Simmons Cancer Center. Dr. Gaynor holds an M.D. from the University of Texas Southwestern Medical School and completed fellowship training in hematology-oncology at UCLA School of Medicine. Dr. Gaynor is on the editorial board of several scientific journals and has published extensively, including over 140 scientific articles. He serves on the board of directors of the Damon Runyon Cancer Research Foundation and sits on several committees for the American Association of Cancer Research and other leading cancer organizations. Dr. Gaynor is a licensed physician with board certifications in oncology and hematology.

Qualifications and Skills: Dr. Gaynor brings to our Board a deep background in the field of oncology, having practiced in academic medicine, conducted extensive scientific research and held leadership roles at companies focusing in the field of oncology. The Board benefits from his technical expertise in oncology research and development, clinical development and business development and his insights from years as an academic and practicing physician.

Director since: September 2019

Current Public Company Boards:

Infinity Pharmaceuticals, Inc. (Nasdaq: INFI) since March 2020

Zai Lab Limited (Nasdaq: ZLAB) since November 2021

 

 

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Cato T. Laurencin, M.D., Ph.D.

Age: 63

Experience: Dr. Laurencin is the University Professor and Albert and Wilda Van Dusen Distinguished Endowed Professor of Orthopaedic Surgery at the University of Connecticut (“UConn”), where he also serves as Professor of Chemical and Biomolecular Engineering, Professor of Materials Science and Engineering and Professor of Biomedical Engineering. He has been a professor at UConn since 2008. Dr. Laurencin is a practicing surgeon and serves as the Chief Executive Officer of The Connecticut Convergence Institute for Translation in Regenerative Engineering. Dr. Laurencin previously served as Vice President for Health Affairs and Dean of the School of Medicine at UConn. Dr. Laurencin is a pioneer in the field of regenerative engineering, and an expert in biomaterials science, stem cell technology and nanotechnology. He currently serves on the board of directors of MiMedx Group, Inc., a public company focused on advanced wound care and therapeutic biologics. Dr. Laurencin received his B.S.E. degree in chemical engineering from Princeton University, his Ph.D. in biochemical engineering and biotechnology from the Massachusetts Institute of Technology, and his M.D. from Harvard Medical School.

Qualifications and Skills: Dr. Laurencin brings to our Board extensive experience across a wide range of medical and scientific disciplines, strong administrative skills, and a focus on public health that is consistent with the Company’s values and business strategy. The Board benefits from his vast medical and scientific knowledge, his leadership and administrative experience, his involvement in mentoring and other activities that promote diversity and excellence in science, and his dedication to social justice research and addressing health disparities.

Director since: November 2021*

Current Public Company Boards:

MiMedx Group, Inc. (Nasdaq: MDXG) since November 2020

* Dr. Laurencin was appointed to the Board in connection with an agreement reached between the Company and shareholder Sarissa Capital Offshore Master Fund LP and its affiliates in April 2021.

 

 

Brian P. McKeon

Age: 60

Experience: Since 2014, Mr. McKeon has served as the Executive Vice President, Chief Financial Officer, and Treasurer of IDEXX Laboratories, Inc. (“IDEXX”), a public multinational corporation providing products and services in the veterinary, livestock and poultry, dairy and water testing markets. He leads IDEXX’s finance, corporate development and strategy, and investor relations functions and, since June 2019, has overseen IDEXX’s livestock, water and human diagnostics businesses. Mr. McKeon served on the board of directors of IDEXX from 2003 to 2013, including serving as Chair of its Audit Committee and as a member of its Compensation Committee. Prior to joining IDEXX, Mr. McKeon served as Executive Vice President and Chief Financial Officer of Iron Mountain Incorporated from 2007 to 2013 and as Executive Vice President and Chief Financial Officer of Timberland Company from 2000 to 2007. Prior to these roles, he held several finance and strategic planning roles at PepsiCo Inc., serving most recently as Vice President, Finance, at Pepsi-Cola, North America. Mr. McKeon previously served as a director of athenahealth, Inc. from September 2017 to February 2019. Mr. McKeon holds a bachelor’s degree in accounting from the University of Connecticut and an MBA with high distinction from Harvard University.

Qualifications and Skills: Mr. McKeon brings to our Board strong financial and management expertise as well as public company executive and director leadership experience. The Board benefits from his experience in finance, strategic planning, corporate development and investor relations, and from his prior service on public company boards of directors, including as a member of audit and compensation committees.

Director since: December 2020

Current Public Company Boards: None

 

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Richard F. Pops

Age: 60

Experience: Prior to assuming his current positions, Mr. Pops served as Chief Executive Officer of Alkermes, Inc. from February 1991 to April 2007 and as Chief Executive Officer and President from September 2009 to September 2011. Mr. Pops serves on the board of directors of BIO and the Pharmaceutical Research and Manufacturers of America (“PhRMA”). He previously served on the boards of directors of Acceleron Pharma, Inc., a publicly-traded biopharmaceutical company, from 2004 to December 2019, Epizyme, Inc., a publicly-traded biopharmaceutical company, from 2008 to October 2020, and the National Health Council, a nonprofit organization, from 2016 to December 2019. Mr. Pops also previously served on the advisory board of Polaris Venture Partners and as a member of the Harvard Medical School Board of Fellows through June 2012.

Qualifications and Skills: Mr. Pops’ qualifications for our Board include his leadership experience, business judgment and deep industry knowledge. As a senior executive of Alkermes, he provides in-depth knowledge of the Company derived from leading our day-to-day operations. His ongoing involvement as a board member of BIO and PhRMA, brings to the organization extensive knowledge of the current state of the pharmaceutical industry and the policy issues impacting healthcare today. As a Co-Chair of BIO’s Regulatory Environment Committee, and a member of its Health Section Governing Board, and as a member of PhRMA’s FDA and Biomedical Research Committee, Mr. Pops is an influential industry leader on U.S. Food and Drug Administration (“FDA”) regulatory policy issues, including recent Prescription Drug User Fee Act reauthorizations. Mr. Pops has also played a leadership role in the industry in identifying pathways to allow patient voices to be incorporated into the drug development and approval process, which is a fundamental principle on which we operate our business.

Director since: September 2011

Current Public Company Boards:

Neurocrine Biosciences, Inc. (Nasdaq: NBIX) since 1998

 

 

 

Nancy L. Snyderman, M.D.

Age: 70

Experience: Dr. Snyderman is a board-certified otolaryngologist and is currently a consulting professor at Stanford University Center for Innovation in Global Health. She served as Chief Medical Editor at NBC News from 2006 until 2015 and was a clinical professor of otolaryngology at the University of Pennsylvania from August 2003 to December 2015. Dr. Snyderman was Senior Vice President Corporate Communications at Johnson & Johnson, a publicly-traded pharmaceutical company, from January 2003 to September 2006. She practiced as an otolaryngologist at California Pacific Medical Center from July 1994 to June 2003 and acted as Medical Editor for ABC News from 1987 until May 2003. Dr. Snyderman is a fellow in the American College of Surgeons. She previously served on the board of directors of the Fair Food Network, a nonprofit organization dedicated to the growth of community health and wealth through food. During Dr. Snyderman’s tenure as a medical journalist at NBC News and ABC News, she received Emmy Awards, Edward R. Murrow Awards, a Columbia University DuPont Award, and a Gracie Award for her reporting. Dr. Snyderman attended medical school at the University of Nebraska and completed residencies in pediatrics and otolaryngology at the University of Pittsburgh.

Qualifications and Skills: Dr. Snyderman’s experiences as a veteran healthcare journalist, a practicing physician, and an executive at a pharmaceutical company, as well as her roles in academia and as advisor to policy organizations, make her uniquely qualified for our Board. The Board benefits from her expert insight into the intersection of healthcare policy, public relations, and journalism from the perspective of both a practitioner and an academic.

 

 

Director since: May 2016

Current Public Company Boards:

Axonics, Inc. (Nasdaq: AXNX) since April 2019

Lyra Therapeutics, Inc. (Nasdaq: LYRA) since October 2020

Future Health ESG Corp. (Nasdaq: FHLT) since September 2021

 

 

 

 

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Frank Anders “Andy” Wilson

Age: 63

Experience: Mr. Wilson most recently served as Chief Financial Officer and Senior Vice President of PerkinElmer, Inc., a life sciences diagnostics, discovery and analytical solutions company, from 2009 to 2018, with responsibility for oversight of the organization’s growth strategy. Prior to PerkinElmer, Mr. Wilson held key business development and finance roles at Danaher Corporation, a global science and technology conglomerate, from 1997 to 2009, including the position of Corporate Vice President of Investor Relations. Earlier in his career, Mr. Wilson worked at AlliedSignal, Inc., now Honeywell International Inc., where he served as Vice President of Finance and Chief Financial Officer for the Commercial Avionics Systems division. Prior to that, Mr. Wilson’s work included financial and controllership positions of increasing responsibility at PepsiCo, Inc., as well as roles at E.F. Hutton and Company and KPMG Peat Marwick. He was previously a member of the board of directors of Sparton Corporation, a provider of complex and sophisticated electromechanical devices, from 2015 to early 2019, where he last served as chairman of the board. Mr. Wilson is a certified public accountant.

Qualifications and Skills: Mr. Wilson’s financial expertise and decades of experience in strategic planning, investor relations and business development for global public companies provide valuable insight for our Board as the Company’s strategic priorities expand and evolve. His background as a chief financial officer and certified public accountant provide significant expertise to our Board in matters relating to finance, value creation and commercial growth.

Director since: September 2019

Current Public Company Boards:

Cabot Corporation (NYSE: CBT) since September 2018

Novanta Inc. (Nasdaq: NOVT) since May 2021

 

 

Nancy J. Wysenski

Age: 64

Experience: Ms. Wysenski served as the Executive Vice President and Chief Commercial Officer of Vertex Pharmaceuticals Incorporated (“Vertex”) from December 2009 through June 2012. Prior to joining Vertex, Ms. Wysenski held the position of Chief Operating Officer of Endo Pharmaceuticals plc (“Endo”), a specialty pharmaceutical company, where she led sales, marketing, commercial operations, supply chain management, human resources and various business development initiatives. Prior to her role at Endo, Ms. Wysenski participated in the establishment of EMD Pharmaceuticals, Inc., where she held various leadership positions, including the role of President and Chief Executive Officer from 2001 to 2006 and Vice President of Commercial from 1999 to 2001. From 1984 to 1998, Ms. Wysenski held several sales-focused roles at major pharmaceutical companies, including Vice President of Field Sales for Astra Merck, Inc. Ms. Wysenski formerly served as a director for Reata Pharmaceuticals, Inc., now a publicly-traded biopharmaceutical company, and more recently served as a director for Inovio Pharmaceuticals, Inc., a publicly-traded biopharmaceutical company, from March 2015 to May 2017, Tetraphase Pharmaceuticals, Inc., formerly a publicly-traded biopharmaceutical company, from March 2014 to July 2020, and Dova Pharmaceuticals Inc., formerly a publicly-traded biopharmaceutical company, from June 2018 to November 2019. She is a founder of the Research Triangle Park chapter of the Healthcare Business Women’s Association and served on the Nominating Committee and National Advisory Board of the Healthcare Businesswomen’s Association.

Qualifications and Skills: Ms. Wysenski is a proven leader who brings to our Board extensive experience building and leading life sciences companies. Ms. Wysenski’s background includes executive management roles with responsibility over key operational and product commercialization functions, including substantial direct experience in sales, marketing, commercial operations, supply chain management, human resources and various business development initiatives. Her experience, leadership skills and knowledge of the life sciences industry provide valuable insight to our Board with respect to the launch and commercialization of pharmaceutical products.

Director since: May 2013

Current Public Company Boards:

Provention Bio, Inc. (Nasdaq: PRVB) since May 2020

Cytokinetics, Inc. (Nasdaq: CYTK) since November 2020

 

 


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Executive Officers

The following table sets forth our executive officers, their ages and the position held by each such person as of the date of this Amendment, and the biographical descriptions that follow set forth additional information regarding each executive officer, including such officer’s business experience that is most relevant to his current position(s). Each of our executive officers is employed by Alkermes, Inc., our U.S. operating subsidiary.

Name

Age

 

Position

Iain M. Brown

53

 

Senior Vice President, Chief Financial Officer

David J. Gaffin

50

 

Senior Vice President, Chief Legal Officer and Chief Compliance Officer*

Craig C. Hopkinson, M.D.

54

 

Executive Vice President, Research and Development and Chief Medical Officer

Blair C. Jackson

49

 

Executive Vice President, Chief Operating Officer

Michael J. Landine

68

 

Senior Vice President, Corporate Development and Chief Risk Officer

C. Todd Nichols

53

 

Senior Vice President, Chief Commercial Officer

Richard F. Pops

60

 

Chief Executive Officer and Chairman of the Board

 

*  Mr. Gaffin also serves as Secretary of the Company.

Information about the number of our ordinary shares beneficially owned by our executive officers, directly and indirectly, appears in the section entitled “Ownership of the Company’s Ordinary Shares” beginning on page 51 of this Amendment.

Executive Officer Biographical Information

 

Richard F. Pops

Chief Executive Officer and Chairman of the Board

Appointment to Current Position(s): September 2011

Experience: Prior to assuming his current positions, Mr. Pops served as Chief Executive Officer of Alkermes, Inc. from February 1991 to April 2007 and as Chief Executive Officer and President from September 2009 to September 2011. Mr. Pops currently serves on the boards of directors of Neurocrine Biosciences, Inc., a publicly-traded biotechnology company, BIO and PhRMA. He previously served on the boards of directors of Acceleron Pharma, Inc., a publicly-traded biotechnology company, from 2004 to December 2019, Epizyme, Inc., a publicly-traded biotechnology company, from 2008 to October 2020, and the National Health Council, a nonprofit organization, from 2016 to December 2019. Mr. Pops also previously served on the advisory board of Polaris Venture Partners and as a member of the Harvard Medical School Board of Fellows through June 2012.

 

Iain M. Brown

Senior Vice President, Chief Financial Officer

Appointment to Current Position(s): January 2021

Experience: Prior to assuming his current position, Mr. Brown served as our Senior Vice President, Finance and Chief Accounting Officer from May 2016 to January 2021 and as Vice President, Finance and Chief Accounting Officer from May 2015 to May 2016. From September 16, 2011 to May 2015, Mr. Brown was our Vice President, Finance. From June 2006 to September 16, 2011, Mr. Brown served as Vice President, Finance of Alkermes, Inc. From March 2005 to June 2006, Mr. Brown served as Director of Finance of Alkermes, Inc. From July 2004 to March 2005, Mr. Brown served as Director of Financial Planning and Analysis of Alkermes, Inc. Mr. Brown joined Alkermes, Inc. in June 2003 as Associate Director of Financial Planning and Analysis. Prior to joining Alkermes, Inc., Mr. Brown was Vice President of Finance, North America at Serono, Inc.

 

David J. Gaffin

Senior Vice President, Chief Legal Officer and Chief Compliance Officer;

Secretary of Alkermes plc

Appointment to Current Position(s): March 2018

Experience: Prior to assuming his current positions, Mr. Gaffin served as Senior Vice President and Chief Legal Officer of Alkermes, Inc. and Secretary of the Company from December 2017 to March 2018. Mr. Gaffin served as Senior Vice President and Chief Legal Officer of Alkermes, Inc. from May 2016 to December 2017. Mr. Gaffin served as Vice President, U.S. General Counsel of Alkermes, Inc., from January 2014 to May 2016. Mr. Gaffin served as Vice President, Deputy General Counsel of Alkermes, Inc. from October 2011 to January 2014, and prior to that in roles of increasing responsibility since joining Alkermes, Inc. in 2005. Prior to joining Alkermes, Mr. Gaffin held the role of Assistant General Counsel at Biogen Inc., where he provided legal counsel on product-related matters and collaboration and licensing transactions.

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Craig C. Hopkinson, M.D.

Executive Vice President, Research and Development and Chief Medical Officer

Appointment to Current Position(s): January 2020

Experience: Prior to assuming his current positions, Dr. Hopkinson was our Chief Medical Officer, and Senior Vice President of Medicines Development and Medical Affairs of Alkermes, Inc. from February 2018 to January 2020, and Chief Medical Officer and Senior Vice President of Clinical Development and Medical Affairs of Alkermes, Inc. from May 2017 to February 2018. Prior to joining Alkermes, Dr. Hopkinson served as Senior Vice President of Clinical Development and Head of Global Medical Affairs at Vertex Pharmaceuticals Incorporated, a global biopharmaceutical company, from July 2014 until May 2017. Prior to that, Dr. Hopkinson held various executive management positions at Eisai Pharmaceuticals, including President Eisai Value Maximization Systems from January 2013 to July 2014 and President and Chief Medical Officer of the Frontier Product Creation Unit from October 2011 to December 2012. Dr. Hopkinson has extensive experience in research and development, medical affairs, and interactions with the FDA.

 

Blair C. Jackson

Executive Vice President, Chief Operating Officer

Appointment to Current Position(s): January 2021

Experience: Prior to assuming his current position, Mr. Jackson served as Senior Vice President, Corporate Planning of Alkermes, Inc. from July 2018 to January 2021, responsible for our business development and alliance management, business planning, new product planning, data analytics and market research and corporate operations functions. From May 2016 to July 2018, Mr. Jackson served as Senior Vice President, Business Development of Alkermes, Inc. From 2006 to May 2016, Mr. Jackson served as Vice President, Business Development of Alkermes, Inc. Prior to that, Mr. Jackson held various scientific and corporate roles within Alkermes, Inc. since joining Alkermes in 1999. Mr. Jackson is a member of the board of directors of Synchronicity Pharma, Inc., a private clinical-stage biopharmaceutical company.

 

Michael J. Landine

Senior Vice President, Corporate Development and Chief Risk Officer

Appointment to Current Position(s): March 2018

Experience: Prior to assuming his current positions, from September 2011 to March 2018, Mr. Landine served as Senior Vice President, Corporate Development of Alkermes, Inc. From May 2007 to September 16, 2011, Mr. Landine served as Senior Vice President, Corporate Development of Alkermes, Inc. From March 1999 until May 2007, Mr. Landine served as Vice President, Corporate Development of Alkermes, Inc. From March 1988 until June 1998, he was Chief Financial Officer and Treasurer of Alkermes, Inc. Mr. Landine was formerly a member of the board of directors of Kopin Corporation, a publicly-traded manufacturer of components for electronic products, ECI Biotech, a privately held protein sensor company, and GTC Biotherapeutics, Inc., a publicly-traded biotechnology company. Mr. Landine was previously a Certified Public Accountant.

 

C. Todd Nichols

Senior Vice President, Chief Commercial Officer

Appointment to Current Position(s): May 2020

 

Experience: Prior to assuming his current position, Mr. Nichols served as Senior Vice President, Sales and Marketing of Alkermes, Inc. from May 2019 to May 2020. Prior to joining Alkermes, Inc., Mr. Nichols served as Vice President of Sales and Marketing, Inflammation and Immunology at Celgene Corporation, a global biopharmaceutical company, from 2018 to 2019 and as Vice President of Sales and Field Operations, Neurology and Hemophilia at Biogen, Inc., a global biopharmaceutical company, from 2014 to 2017. Prior to that, Mr. Nichols worked for Merck, serving as Vice President and Head of the US Vaccines Business Unit from 2011 to 2014 and as National Sales Leader, Specialty Commercial Operations-Women’s Health Care from 2009 to 2011. Prior to that, Mr. Nichols held a variety of positions at Schering-Plough Corporation (acquired by Merck in 2009), including Area Vice President, Sales and Regional Sales Director.

 

There are no family relationships among any of our directors or executive officers.

Certain Corporate Governance Matters

Audit and Risk Committee of the Board

The Audit and Risk Committee of the Board (the “Audit and Risk Committee”) is currently comprised of three members: Frank Anders Wilson (Chair), Nancy L. Snyderman, M.D. and David A. Daglio, Jr., each of whom is independent as defined in Rule 5605(a)(2) and 5605(c)(2) of the Nasdaq Stock Market (“Nasdaq”) listing standards and the applicable requirements of the Exchange Act. In compliance with the Sarbanes-Oxley Act of 2002, the Board has determined based on available facts and circumstances that Mr. Wilson is an “audit committee financial expert” as defined by the SEC. 

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Code of Business Conduct and Ethics

The Company has a Code of Business Conduct and Ethics that applies to all of the Company’s directors, employees and officers, including its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. This Code of Business Conduct and Ethics meets the requirements of a “code of ethics” (as defined in the regulations promulgated under the Securities Act and the Exchange Act) and a “code of conduct” (as defined in the applicable rules and regulations of Nasdaq (the “Nasdaq Rules”)). A current copy of this Code of Business Conduct and Ethics is available on the Corporate Governance page of the Investors section of our website at www.alkermes.com. We intend to disclose any amendments to our Code of Business Conduct and Ethics, or any waivers of its requirements, on our website. A copy of our Code of Business Conduct and Ethics may also be obtained, free of charge, from the Company upon request directed to: Alkermes Investor Relations, Connaught House, 1 Burlington Road, Dublin 4, Ireland, D04 C5Y6.

Members of the Board shall act at all times in accordance with the requirements of the Company’s Code of Business Conduct and Ethics, which is applicable to each director in connection with their activities relating to the Company. This obligation shall at all times include, without limitation, adherence to the Company’s policies with respect to conflicts of interest, confidentiality, protection and proper use of the Company’s assets, ethical conduct in business dealings and respect for, and compliance with, applicable law. Any request for a waiver of any of the requirements of the Code of Business Conduct and Ethics with respect to any individual director or any executive officer shall be reported to the Board and subject to its approval.

Procedure for Recommendation by Shareholders of Director Nominees

No material changes have been made to the procedures by which shareholders may recommend director nominees to our Board.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who beneficially own more than 10% of the Company’s ordinary shares, to file with the SEC initial reports of ownership and reports of changes in ownership of our ordinary shares. To the Company’s knowledge, all such reports were timely filed during 2021, except that, due to technical difficulties with the EDGAR system, one report on Form 3 for Mr. Jackson was inadvertently filed late.

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Item 11. Executive Compensation

Compensation Discussion and Analysis

Executive Summary

This “Compensation Discussion and Analysis” section discusses our executive compensation policies and arrangements as they relate to the following executive officers of the Company. These individuals are referred to as our “named executive officers” for 2021 (references in this Amendment to our named executive officers exclude Mr. Frates unless context requires otherwise):

Named Executive Officer

Position

Richard F. Pops

Chief Executive Officer and Chairman of the Board

Iain M. Brown

Senior Vice President, Chief Financial Officer

James M. Frates(1)

Former Senior Vice President, Chief Financial Officer

Craig C. Hopkinson, M.D.

Executive Vice President, Research and Development and Chief Medical Officer

Blair C. Jackson

Executive Vice President, Chief Operating Officer

David J. Gaffin

Senior Vice President, Chief Legal Officer, Chief Compliance Officer and Secretary

 

(1)

Mr. Frates terminated his employment with the Company in January 2021.

Leadership Changes

In January 2021, we announced a number of changes to our executive leadership team, including the departure of Mr. Frates, our former Senior Vice President, Chief Financial Officer, and the appointment of Messrs. Brown and Jackson to the roles of Senior Vice President, Chief Financial Officer and Executive Vice President, Chief Operating Officer, respectively. Prior to these changes, Messrs. Brown and Jackson served as our Senior Vice President, Chief Accounting Officer and Senior Vice President, Corporate Planning, respectively.

Business Overview

We are a fully-integrated, global biopharmaceutical company that applies its scientific expertise and proprietary technologies to research, develop, manufacture and commercialize, both with partners and on our own, pharmaceutical products that are designed to address unmet medical needs of patients in major therapeutic areas. We are currently developing a pipeline of potential new proprietary products for neurodegenerative disorders and cancer. We manufacture and commercialize VIVITROL for the treatment of alcohol dependence and opioid dependence, ARISTADA for the treatment of schizophrenia, ARISTADA INITIO for initiation onto ARISTADA for the treatment of schizophrenia and LYBALVI for the treatment of schizophrenia and bipolar I disorder. We also manufacture commercial products that incorporate our proprietary technologies under license, which are owned and commercialized by other biopharmaceutical companies and for which we receive manufacturing and/or royalty revenues. Headquartered in Dublin, Ireland, we have an R&D center in Waltham, Massachusetts, an R&D and manufacturing facility in Athlone, Ireland, and a manufacturing facility in Wilmington, Ohio.

 

COVID-19 Ongoing Impact and Response

The COVID-19 pandemic has continued to profoundly impact our employees, their families, the economies and communities in which we live and work, and the patients that our medicines are designed to serve. Since the emergence of the pandemic in early 2020, we have continuously adapted our business practices to support the health, safety and wellness of our employees, and the uninterrupted supply of, and access to, our products for people enrolled in our clinical studies and for people living with opioid dependence, alcohol dependence, schizophrenia or bipolar I disorder. We have adopted and evolved work from home and virtual engagement policies for employees who could do their jobs remotely, instituted new health and safety protocols for employees performing essential tasks in our manufacturing facilities and laboratories, worked with clinical trial sites to support continuity of care and expanded our injection site network to facilitate patient access to our marketed products. These efforts helped to mitigate the impacts of the COVID-19 pandemic on our development programs and commercial activities and to minimize disruptions at our facilities.

In 2021, the COVID-19 pandemic continued to negatively impact healthcare providers, patients and caregivers involved in the treatment of serious mental illness and addiction in the U.S. As a result, sales of our proprietary injectable products VIVITROL and ARISTADA, and of certain third-party products from which we receive revenue, continued to be negatively impacted.

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2021 Performance – Long-Term Value Creation for Patients and Shareholders

Three strategic priorities guided our management of the business in 2021: commercial execution; advancement of our development pipeline; and a focus on profitability. At the same time, we worked to enhance our foundation of strong corporate governance, dedication to patients and to our employees and our commitment to operating in an ethical and responsible manner. Consistent with these priorities, and despite COVID-19-related challenges, 2021 was a year of important accomplishments for the Company. Highlights included:

Commercial and Financial Highlights

Obtained FDA approval of, and commercially launched, LYBALVI (olanzapine and samidorphan), our oral antipsychotic product for the treatment of adults with schizophrenia or bipolar I disorder.

Increased total revenues for the year to $1.17 billion, from $1.04 billion in the prior year.

Achieved VIVITROL annual net sales of $343.9 million, which was toward the high end of our annual net sales guidance and represented an 11% increase compared to 2020.

Drove year-over-year ARISTADA prescription growth of ~14% on a months-of-therapy (“MOT”) basis, which outpaced the overall long-acting injectable market growth of ~5%.

Implemented new digital technologies and ways of engaging with healthcare providers, both remotely and in-person, to support uninterrupted patient and provider access to VIVITROL and ARISTADA as we continued to adapt our commercial model in response to the COVID-19 pandemic.

Exceeded the low end of our annual net loss in accordance with generally accepted accounting principles in the U.S. (“GAAP”) guidance and the high end of our annual non-GAAP net income guidance with a GAAP net loss of $48.2 million and non-GAAP net income of $129.1 million. See the section entitled “GAAP to Non-GAAP Reconciliation” on page 37 of this Amendment for a GAAP to non-GAAP reconciliation of this financial measure.

Significantly reduced operating expenses in 2021 through continued focus on disciplined capital allocation and optimization of cost structure.

Pipeline Highlights

Obtained FDA Fast Track designation and Orphan Drug designation for nemvaleukin alfa, our product candidate in immuno-oncology, for the treatment of mucosal melanoma, and Fast Track designation for the treatment of platinum resistant ovarian cancer (“PROC”).

Initiated potential registrational studies of nemvaleukin alfa for the treatment of mucosal melanoma and for the treatment of PROC.

Nominated ALKS 2680, our orexin 2 receptor agonist for the treatment of narcolepsy, for advancement into clinical development.

Initiated a phase 1 first-in-human study for ALKS 1140, our selective histone deacetylase inhibitor candidate.

Corporate and ESG Highlights

Expanded our diversity, inclusion and belonging (“DIB”) efforts and launched two new employee resource groups – Limitless, to support individuals with disabilities and caregivers, and Operation Salute, to support veterans.

Published our 4th Corporate Responsibility Report, disclosing our environmental, social and governance (“ESG”) activities, environmental performance data, new DIB initiatives, and ways in which we have continued to adapt to the COVID-19 environment.

Engaged with policymakers to help secure more than $1 billion in federal funding and state appropriations for use in the treatment of addiction and serious mental illness, and advanced our advocacy efforts on behalf of patients.

Awarded Alkermes Inspiration Grants Program grants totaling $500,000 to nonprofit organizations working to address the needs of people living with addiction, serious mental illness or cancer, including programs serving historically under-resourced or underrepresented communities.

Multi-year Shareholder Engagement and Board Responsiveness

The Compensation Committee of the Board (the “Compensation Committee”) and the Board are committed to executive compensation policies and practices that support the Company’s strategic objectives and align with the creation of shareholder value. We regularly engage with our shareholders on a variety of topics, including our business and growth strategy, financial performance, corporate governance, executive compensation practices and various ESG matters.

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Shareholder Outreach, Engagement and Feedback

For the past several years, the Board and Compensation Committee have been actively soliciting shareholder feedback. Following our annual meetings in 2019 and 2020, we requested engagement meetings with shareholders who collectively held more than 75% of our outstanding shares and in each year held meetings with shareholders who collectively held approximately 65% of our outstanding shares.

In 2021, our say-on-pay proposal received support of approximately 73% of the votes cast. Following our annual meeting in 2021, we requested engagement meetings with shareholders who collectively held approximately 80% of our outstanding shares and held meetings with shareholders who collectively held approximately 65% of our outstanding shares. Our Lead Independent Director and other members of our Board participated in certain of these meetings alongside representatives of management.  

During these engagements, shareholders generally acknowledged the Board and Compensation Committee’s responsiveness to shareholder feedback and the significant enhancements to our executive compensation programs, including those set forth in the table below. Two of our larger shareholders (representing approximately 20% of our outstanding shares) who voted against our say-on-pay proposal in 2021 cited our historical share price and financial performance as reasons for their vote; they did not express concerns with our executive compensation practices or our 2020 executive compensation program.

Board Responsiveness – Enhancements to Compensation Practices

Shareholder feedback received during these engagements was communicated to management, the full Board and committees of the Board, as appropriate. After careful consideration of the feedback received, the evolving needs of our business and market trends in compensation practices, the Compensation Committee implemented significant changes to our executive compensation program, primarily to enhance its performance-based nature and alignment with shareholder value creation.

Shareholder Feedback

Actions We Took in Response

Utilize peer group that reflects your company profile

Updated our peer group to eliminate certain companies whose market capitalization was significantly higher than ours. For additional detail, see the section entitled “Peer Group Selection and Review Process” on page 19 of this Amendment.  

Expand use of performance-based equity

Structured 2020 and 2021 compensation to ensure that a majority of the total target value of our Chief Executive Officer’s (“CEO”) annual equity grant consisted of performance-based restricted stock unit awards (“PRSUs”), and expanded use of PRSUs as part of the annual equity grants for all named executive officers.

Long-term incentive plan (“LTIP”) metrics tied to shareholder value creation

2021 LTIP. Incorporated three-year financial (40% weighting), pipeline (40% weighting) and commercial (20% weighting) goals that align with our long-term business strategy. Included a relative total shareholder return (“TSR”) modifier that may increase or decrease the total number of vested shares underlying the PRSUs by up to 25%. For additional information on the 2021 LTIP, see the section entitled “2021 LTIP Design In Line with Shareholder Feedback” on page 29 of this Amendment.

Develop objective and measurable approach to the determination of short-term incentive plan (“STIP”) payouts

2021 STIP. Enhanced design to include objective, pre-determined financial and commercial (45% weighting), pipeline (35% weighting) and corporate responsibility (20% weighting) objectives. For additional information on the 2021 STIP, see the section entitled “2021 STIP Design In Line with Shareholder Feedback” on page 23 of this Amendment.

Link long-term profitability to executive compensation

 

 

2021 LTIP. Added long-term profitability financial goals (40% weighting) in line with targets announced in December 2020 for fiscal year (“FY”) 2023 (non-GAAP net income margin* equal to 25% of the Company’s total revenues; EBITDA margin* of 20% of the Company’s total revenues). For additional detail, see the section entitled “2021 LTIP Design In Line with Shareholder Feedback” beginning on page 29 of this Amendment.

*See the section entitled “GAAP to Non-GAAP Reconciliation” on page 37 of this Amendment for information regarding these non-GAAP financial targets.

 

2021 STIP. Added operational targets designed to incentivize progress in 2021 toward achievement of the Company’s long-term profitability goals for FY 2023 and FY 2024. For additional detail, see the section entitled “2021 Corporate Objectives” beginning on page 23 of this Amendment.

2022 LTIP and STIP. Included financial goals and metrics tied to the revised long-term profitability targets announced by the Company in February 2022.

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Shareholder Feedback

Actions We Took in Response

Incorporate ESG matters into the Company’s compensation plans

2021 STIP. Included (i) a corporate responsibility objective related to ESG matters, with underlying performance metrics related to human capital development, employee engagement, corporate responsibility and sustainability, and (ii) a corporate responsibility objective focused on DIB, with underlying metrics related to talent management and development, pay practices, employee engagement and sentiment and the launch of new employee resource groups. For additional detail, see the section entitled “2021 Company Performance Assessment” on page 24 of this Amendment.

Expand scope of Clawback Policy

Expanded our Clawback policy to apply to certain cash-based compensation in addition to equity-based compensation. For additional detail, see the section entitled “Clawback Policy” beginning on page 33 of this Amendment.

 

We remain committed to engaging with our shareholders and other stakeholders on a regular basis to solicit and consider their views on our business strategy and performance, executive compensation programs and corporate responsibility and governance practices. We invite stakeholders to reach out to our Investor Relations team at investor_relations@alkermes.com with any suggestions, comments or inquiries.

 

Executive Compensation Program Highlights

Our executive compensation program is focused on attracting, retaining and motivating experienced and well-qualified executive officers to advance our critical business objectives and promote the creation of long-term shareholder value.

Strong Compensation Governance Attributes

Our policies and practices are designed to enhance governance of our executive compensation program and further our compensation objectives. These policies and practices include:

 

Key Features of Our Executive Compensation Program

Alignment of executive pay with performance

Clawback policy in respect of equity compensation and certain cash compensation

Annual advisory vote on executive compensation

Share ownership and holding guidelines for executive officers and directors

Use of equity awards with performance-based vesting for all executive officers

Prohibition of hedging and pledging by executive officers and directors

Majority of executive compensation is “at-risk”

No excessive perquisites

Incorporation of ESG considerations into STIP

No guaranteed bonuses or base salary increases

Incorporation of relative TSR metric into LTIP

No tax gross-ups on severance or change in control benefits for individuals hired after 2009

Annual review of peer group companies

No repricing of underwater stock options without prior shareholder approval

Focus on Pay for Performance and Alignment of Compensation with Business Strategy

We believe in a pay-for-performance approach to executive compensation that supports our business strategy and aligns the interests of our named executive officers with those of our shareholders and other stakeholders. The focus of our executive compensation program is on total direct compensation opportunity utilizing a balance of compensation elements, including:

 

Base Salary: The Compensation Committee determines base salaries for our named executive officers that are competitive with other companies in our industry with which we compete for top talent. For information about 2021 base salaries for our named executive officers, see the section entitled “Base Salary” beginning on page 22 of this Amendment.

 

Short-Term Cash Incentive Compensation: The Compensation Committee designs annual incentives that incorporate annual corporate objectives—including financial, operating, strategic and/or ESG-related objectives—to focus our executive officers on achieving our short- and long-term business and strategic goals. For information about the annual cash performance pay awarded to our named executive officers for 2021, see the section entitled “Short-Term Incentive Plan (STIP) – Annual Cash Performance Pay” beginning on page 22 of this Amendment.

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Long-Term Equity Incentive Compensation: The Compensation Committee annually considers the appropriate mix of performance-vesting and time-vesting equity awards to encourage our executive officers to focus on the Company’s ongoing and future activities and ensures that a meaningful portion of the annual equity grants made to our named executive officers is conditioned on achievement of long-term performance goals—including financial, commercial and pipeline-related goals—that are aligned with our corporate strategy and the creation of long-term value for the Company and its shareholders. For information about the long-term equity awards granted to our named executive officers in 2021, see the section entitled “Long-Term Incentive Compensation - Annual Equity Grantbeginning on page 29 of this Amendment.

Throughout this “Compensation, Discussion and Analysis” section of this Amendment, we provide insight into the deliberative processes and considerations of our Compensation Committee in making these executive compensation decisions.

Significant Portion of “At-Risk” Compensation

A significant portion of the total direct compensation opportunity for each of our named executive officers, including our CEO, is comprised of “at-risk” compensation in the form of annual cash performance pay opportunities and long-term equity awards which are either performance-based and tied to the achievement of pre-determined corporate objectives designed to drive value creation for our shareholders or time-vesting stock options which have value only if our share price increases from the price on the grant date.

The following chart represents the breakdown of 2021 total direct compensation for our CEO and illustrates the predominance of long-term equity incentives, performance-based components, and compensation that is “at-risk” in our CEO’s pay. Included in the chart are: (i) annual base salary for 2021; (ii) annual bonus award paid for 2021; and (iii) the approved target value of equity awards granted in 2021.

 

 

2021 Executive Compensation Decision Highlights

 

Maintained STIP and LTIP Designs that are reflective of Shareholder Feedback: Our Compensation Committee approved STIP and LTIP designs that include measurable, performance-based pre-determined goals that aligned with both shareholder feedback and the Company’s short-term and long-term business priorities.

 

Approved Compensation Based on Pay-for-Performance Philosophy: 2021 was a year of significant achievements that furthered the Company’s short- and long-term objectives and supported long-term value creation for our shareholders. In recognition of the Company’s strong performance as measured against the 2021 corporate objectives, the Compensation Committee approved a Company performance payout percentage of 110% under the 2021 STIP and, after assessing the individual performance of each named executive officer (other than our CEO, whose annual cash performance pay opportunity was based entirely on the Company’s performance), the Compensation Committee approved 2021 STIP cash performance payouts for our named executive officers that ranged from 105% to 115% of their performance pay targets, as described in more detail below.

 

Expanded Scope of our Clawback Policy: In May 2021, our Board expanded our Clawback policy to apply to certain cash-based compensation in addition to equity-based compensation. For additional detail, see the section entitled “Clawback Policy” beginning on page 33 of this Amendment.

 

Refreshed Compensation Committee: In June 2021, we refreshed the membership of the Compensation Committee by appointing Brian P. McKeon to the Compensation Committee and designating Nancy J. Wysenski as Chair of the Compensation Committee.

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Detailed Discussion and Analysis

Executive Compensation Philosophy and Objectives

Our executive compensation program is focused on attracting and retaining experienced and well-qualified executive officers who will help advance our critical business objectives and rewarding them for performance that contributes meaningfully to the creation of shareholder value. We structure our executive compensation based on scope of job responsibility, external peer comparisons, individual performance and our overall Company performance.

The Compensation Committee establishes our executive compensation program each year with the following objectives:

ALIGNMENT OF PAY AND PERFORMANCE

Structure an increasing proportion of an individual’s compensation as performance-based

ALIGNMENT WITH SHAREHOLDER INTERESTS

Provide an overall compensation package that rewards individual and Company performance against our corporate objectives as a means to promote the creation and retention of value for the Company and its shareholders

BALANCE OF SHORT- AND LONG-TERM INCENTIVES

Align with the short- and long-term focus required for success in the biopharmaceutical industry

MARKET COMPETITIVENESS AND RETENTION

Attract and retain a highly-skilled workforce by providing a total compensation package that is competitive with other employers who compete with us for talent

How Target Compensation is Determined for our Named Executive Officers

Role of the Compensation Committee

The Compensation Committee reviews, oversees and administers our compensation policies, plans and programs, and reviews and determines the compensation to be paid to our executive officers. The Compensation Committee’s full set of roles and responsibilities are set forth in the Compensation Committee’s written charter adopted by the Board, which is available on the Corporate Governance page of the Investors section of our website at www.alkermes.com. Among the factors considered by the Compensation Committee in determining executive compensation is the high demand for well-qualified personnel in our industry, particularly in recent years. Given such demand, the Compensation Committee strives to maintain compensation levels for our executive officers that are competitive with the compensation of executives at comparable companies.

Role of the Independent Compensation Consultant

For 2021, the Compensation Committee engaged Aon’s Human Capital Solutions practice, a division of Aon plc (formerly known as Radford), as its independent compensation consultant (the “Compensation Consultant” or “Aon”) to review market data and various incentive programs and to provide assistance in establishing our cash and equity-based compensation targets and awards based, in large part, upon a peer group identification and assessment, and upon an analysis of the retention value of equity awards.

The Compensation Consultant did not provide the Company with any services in respect of executive compensation other than the services requested by or on behalf of the Compensation Committee. The Compensation Committee considered whether the work of the Compensation Consultant caused any conflict of interest and concluded that there was no conflict. The Compensation Committee, in its sole authority, has the right to hire or terminate outside compensation consultants. Aon was the only compensation consultant engaged by the Compensation Committee for 2021.

Competitive Assessment of Compensation – Peer Companies and Market Data

We seek to attract and retain highly-qualified executive officers in an extremely competitive market. The Compensation Committee believes that it is important, when making compensation decisions, to be informed as to the current practices of comparable public companies with which we compete for executive talent.

Market Data. At the direction of the Compensation Committee, the Compensation Consultant periodically conducts peer group analyses to enable the Compensation Committee to compare our executive compensation program as a whole, and also the pay of individual executives, to that of the companies in our peer group. The Compensation Consultant also includes data from a broader survey group of public commercial-stage biopharmaceutical companies within a relevant revenue range in each of its analyses. The Compensation Consultant collects such data from public SEC filings and the Radford Global Life Sciences Survey, and applies a proprietary methodology to the data to construct a benchmark for comparison.

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Peer Group Selection and Review Process. The Compensation Committee reviews the composition of our peer group at least annually and revises the group as needed to account for changes in our business and in the businesses of the companies in our peer group.

As a fully-integrated, global biopharmaceutical company, we have built, and continue to devote significant resources to further develop and enhance, a comprehensive cross-functional organization designed to support product development from discovery through commercialization and lifecycle management. As part of this effort, we invest significantly in R&D, including early discovery, translational medicine, formulation and clinical development capabilities; intellectual property prosecution, enforcement and defense; medical affairs; manufacturing operations; U.S. federal and state government affairs; sales and marketing; and market access, among other areas.

There are a limited number of companies who are similar to us in terms of the diversity and complexity of our business. As such, the companies with which we compete directly for executive talent are not always similar to us in size, revenue or market capitalization. As a result, when developing the recommended lists of peer group companies to be used in connection with our 2021 compensation decisions for our named executive officers, the Compensation Consultant considered a mix of quantitative and qualitative factors, including the factors listed in the table immediately below.

 

Factor Considered

What We Look For

Similar industry

Biotechnology or pharmaceutical industry (GICS codes 352010 or 352020)

Commercial

Companies who market and sell commercial biopharmaceutical medicines

R&D expenditure as percentage of revenue

Significant investment in R&D to develop and advance products from discovery through to regulatory approval and commercialization

Revenue

Revenue of approximately 0.3 times to 3.0 times our then-projected revenue, resulting in a revenue range of $350 million to $3 billion as of September 2020

Market capitalization

Market capitalization of approximately 0.3 times to 3.0 times our then-current market value, resulting in a market capitalization range of $1 billion to $9 billion as of September 2020, based on our 30-day average market capitalization in August 2020

Number of employees

Employee headcount of approximately 0.3 times to 3.0 times our then-current headcount, resulting in a range of 850 to 7,500 employees as of September 2020

Geography / market competition

Companies with which we compete directly for executive talent, including those in geographic proximity to our sites of operation

Alkermes in peer group

Inclusion of Alkermes in a company’s peer group, as reported in the company’s proxy statement from the prior year

2021 Peer Group

When selecting our 2021 peer group, the Compensation Committee targeted a group of 10 to 20 peers. Since few companies align with us on all of the factors listed above, the Compensation Committee considered, and included in our peer group, those companies meeting a majority of our qualitative and quantitative criteria, with a greater weight placed on companies with a similar business model to ours––namely, those that market and sell commercial biopharmaceutical products, generate substantial revenue from such commercial activities and invest significantly in R&D and manufacturing—and with less of a focus placed on market capitalization, as the Compensation Committee believes that revenue is a better indicator of the complexity of a company’s business model in our industry. In this context, the Compensation Committee excluded from our peer group those biopharmaceutical companies with business models that are dissimilar to ours, such as those that focus on over-the-counter and generic pharmaceuticals, medical diagnostics or veterinary pharmaceuticals, as we do not compete for senior executive talent with these companies and including them within our peer group could disadvantage us in attracting and retaining leadership talent.

 

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In September 2020, in light of significant changes to our market capitalization during 2019 and 2020, and taking into account feedback received during our shareholder engagements and the evolving profile of our business, the Compensation Consultant recommended, and the Compensation Committee approved, significant refinements to our peer group as set forth in the table below. In August 2021, following the Compensation Consultant’s findings that the Company was well-positioned among its then-current peer group in terms of revenue and market capitalization, the Compensation Committee approved only incremental refinements to our peer group, as set forth in the table below.

 

Acadia Pharmaceuticals Inc.

Alexion Pharmaceuticals, Inc.

BioMarin Pharmaceutical Inc.

Emergent BioSolutions Inc.

Endo International plc

Exelixis, Inc.

Horizon Therapeutics plc

Incyte Corporation

Ionis Pharmaceuticals, Inc.

Jazz Pharmaceuticals plc

Nektar Therapeutics

Neurocrine Biosciences, Inc.

Seagen Inc.

United Therapeutics Corporation

Removed:

-Alexion Pharmaceuticals, Inc.  

-BioMarin Pharmaceutical Inc.

 

 

 

 

 

Added:

+bluebird bio, Inc.

+Intercept Pharmaceuticals, Inc.#

+Ironwood Pharmaceuticals, Inc.

+Sage Therapeutics, Inc.

 

Acadia Pharmaceuticals Inc.

bluebird bio, Inc.

Emergent BioSolutions Inc.

Endo International plc

Exelixis, Inc.

Horizon Therapeutics plc

Incyte Corporation

Intercept Pharmaceuticals, Inc.#

Ionis Pharmaceuticals, Inc.

Ironwood Pharmaceuticals, Inc.

Jazz Pharmaceuticals plc

Nektar Therapeutics

Neurocrine Biosciences, Inc.

Sage Therapeutics, Inc.

Seagen Inc.

United Therapeutics Corporation

Removed:

-Intercept Pharmaceuticals, Inc.

 

 

 

 

 

 

Added:

+Sarepta Therapeutics, Inc.

Acadia Pharmaceuticals Inc.

bluebird bio, Inc.

Emergent BioSolutions Inc.

Endo International plc

Exelixis, Inc.

Horizon Therapeutics plc

Incyte Corporation

Ionis Pharmaceuticals, Inc.

Ironwood Pharmaceuticals, Inc.

Jazz Pharmaceuticals plc

Nektar Therapeutics

Neurocrine Biosciences, Inc.

Sage Therapeutics, Inc.

Sarepta Therapeutics, Inc.

Seagen Inc.

United Therapeutics Corporation

 

# In our 2021 proxy statement filed with the SEC on May 10, 2021 (our “2021 Proxy Statement”), Sarepta Therapeutics, Inc. was inadvertently listed in our 2021 peer group in lieu of Intercept Pharmaceuticals, Inc. In August 2021, Intercept Pharmaceuticals, Inc. was removed from our peer group and Sarepta Therapeutics, Inc. was added, as reflected above.

*All companies in our 2021 peer group, with the exception of Sage Therapeutics, Inc. and Seagen Inc., included us in their self-selected peer groups, as disclosed in their respective 2021 proxy statements.

 

Use of Peer Group Data

At the direction of the Compensation Committee, the Compensation Consultant analyzes our peer group and other market data to prepare its executive compensation reports and recommendations each year. The table below shows the timing of the Compensation Committee’s decision-making with respect to compensation for each of our named executive officers:

 

December

Set performance pay targets and performance pay ranges for upcoming year

January

Review and adjust salaries for current year

February

Determine target equity award values for current year

The Compensation Committee generally targets around the 50th percentile of the peer group for all elements of pay for our named executive officers. However, the comparative data provided by the Compensation Consultant is just one of many factors that the Compensation Committee takes into consideration in determining executive compensation. As discussed in detail in this “Compensation Discussion and Analysis” section of this Amendment, the Compensation Committee increases or decreases the variable elements of pay from the 50th percentile based upon actual individual and Company performance and a number of other considerations.

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Executive Compensation Program Design and Key Elements

The Compensation Committee establishes total compensation opportunity for each named executive officer. The Committee believes that a mix of fixed, short-term and long-term incentive compensation, and cash and equity-based compensation, is appropriate to achieve our executive compensation program goals and corporate objectives. To align the named executive officers’ incentives with the interests of our shareholders and our business priorities, a significant portion of the compensation opportunity for our named executive officers is comprised of “at-risk” annual cash performance pay opportunities and long-term equity awards.

The table below describes the key elements of our 2021 executive compensation program.

 

 

Element

Key Features

 

Purpose

Base Salary

Fixed cash compensation to recognize the executive’s day-to-day responsibilities

Provides a fixed level of compensation that is competitive within our industry and geographic locations

Reviewed and adjusted annually after the conclusion of the previous year

Annual Cash Performance Pay

Variable cash compensation awarded after the conclusion of the previous year based on Company performance against pre-determined corporate objectives and individual contributions to such performance during the prior year

Aligns executive officers with business strategy and motivates them to achieve short-term corporate objectives

No guaranteed amount

 

 

Determined annually

Rewards executive officers based on performance against pre-determined targets

Restricted Stock Unit Awards

 

Stock Options

Value and mix determined annually

Appropriately reward, recognize and retain key executive officers

The number of shares underlying stock options is determined using an approved value, the then-current price of the Company’s ordinary shares and the Black-Scholes stock option pricing model

The number of shares underlying restricted stock unit awards is determined using an approved value and the then-current price of the Company’s ordinary shares

Align interests of executive officers with the Company’s long-term business strategy and the creation of shareholder value

Restricted stock unit awards, including performance-based awards, do not vest, and stock options do not vest and become exercisable, until one year from the date of grant at the earliest

No guaranteed amount

Provide executive officers with the opportunity to share in the future value they are responsible for creating

Time-Vesting

Time-vesting equity awards typically vest in equal annual installments over a four-year period

Performance-Vesting

Performance-vesting equity awards align executive compensation with specific milestones expected to drive value for our shareholders

Performance-vesting equity awards vest upon the achievement of pre-determined objectives of importance to the Company’s long-term business strategy

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Base Salary

In January 2021, the Compensation Committee reviewed and adjusted the base salaries of our executive officers. In determining base salary adjustments, the Compensation Committee considered a number of factors, including cost-of-living indices, market data for our peer group, the competitive market for executive talent in our industry and the geographic regions in which we operate, individual executive officer responsibilities within the Company, the Compensation Committee’s competitive positioning philosophy and, for those executive officers other than Mr. Pops, the performance assessments and recommendations of Mr. Pops.

Based on this review, the Compensation Committee determined that each named executive officer should receive an increase of approximately 3.0% in their base salary for 2021, with the two exceptions of Messrs. Brown and Jackson. The Compensation Committee recommended, due to the promotions of Messrs. Brown and Jackson to Chief Financial Officer and Chief Operating Officer, respectively, that they each receive an increase of approximately 10%. The increases for Messrs. Brown and Jackson served to align their base salaries between the 25th and 50th percentile of the base salaries of executives in similar positions at our peer group companies. Following these adjustments, the following were the base salaries for each of our named executive officers for 2021:

Named Executive Officer*

2020 Base Salary

2021 Base Salary

Approximate % Increase

Richard F. Pops

$1,073,712

$1,105,923

3.0%

Iain M. Brown

$455,500

$500,000

9.8%

Craig C. Hopkinson, M.D.

$650,000

$670,000

3.0%

Blair C. Jackson

$489,500

$540,000

10.3%

David J. Gaffin

$569,250

$586,250

3.0%

* Mr. Frates terminated his employment with the Company in January 2021.

There were no further adjustments to the base salaries of our named executive officers during 2021.

Short-Term Incentive Compensation – Annual Cash Performance Pay

Rigorous Process for Determining Annual Cash Performance Pay

The Compensation Committee works with management to set annual corporate objectives—including financial, operating, strategic and ESG-related objectives—that the Board believes our executive officers should focus on during the year in order to achieve our strategic goals. The Board and the Compensation Committee monitor and review progress against these annual corporate objectives during and after the conclusion of each year.

Under our reporting officer performance pay plan, each executive officer is eligible to receive an annual cash performance pay award, the amount of which is determined by the Compensation Committee based on a pre-determined performance pay target (expressed as a percentage of the executive officer’s base salary). The annual cash performance payouts are contingent upon the Company’s performance against its annual corporate objectives and, for executive officers other than the CEO, their individual performance in contributing to the achievement of the Company’s corporate objectives.

2021 Cash Performance Targets and Pay Ranges

The Compensation Committee annually reviews and approves individual performance pay targets and performance pay ranges (in each case expressed as a percentage of base salary) for each of our named executive officers, taking into consideration comparable competitive market data for officers in similar positions at our peer group companies, and generally selecting performance pay targets around the 50th percentile of such market data.

In December 2020, the Compensation Committee determined that the performance pay targets and performance pay ranges for the 2021 performance period should remain at the same levels as the targets and pay ranges for the 2020 performance period for all named executive officers. Subsequently, in January 2021, Mr. Jackson was promoted to Executive Vice President, Chief Operating Officer, and the Compensation Committee approved a performance pay target increase for Mr. Jackson from 50% to 60% and a corresponding increased performance pay range of 0 to 120%. This resulted in a performance pay target between the 25th and 50th percentile of our peer group for similar roles. The approved performance pay targets and performance pay ranges for each of our named executive officers for 2021 are set forth in the following table.

Named Executive Officer

2021 Performance Pay Range

as % of Base Salary

2021 Target Performance Pay as % of Base Salary

Richard F. Pops

0% to 200%

100%

Iain M. Brown

0% to 100%

50%

Craig C. Hopkinson, M.D.

0% to 120%

60%

Blair C. Jackson

0% to 120%

60%

David J. Gaffin

0% to 100%

50%

* Mr. Frates terminated his employment with the Company in January 2021 and was therefore not eligible for 2021 performance pay.

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2021 STIP Design In Line with Shareholder Feedback

The Compensation Committee designed the 2021 STIP to enhance the objectivity of, and measurability of performance under, the plan. Specifically, the Compensation Committee:

 

established pre-determined objective quantitative and qualitative metrics to assess performance against each of the Company’s 2021 corporate objectives (see the table entitled “2021 Company Performance Assessment” beginning on page 24 of this Amendment);

 

 

assigned relative percentage weightings for each category of objectives, reflecting the Compensation Committee’s assessment of their relative importance in contributing to the Company’s overall business strategy and to shareholder value creation (see graphic to the right); and

assigned relative percentage weightings for corporate and individual performance for each executive officer, including our named executive officers, for use in the determination of their annual cash performance pay as follows:

 

 

CEO

100% Company Performance

 

 

Other NEOs

75% Company Performance; 25% Individual Performance

 

2021 Corporate Objectives

In January 2021, the Compensation Committee determined, and the Board subsequently approved, ten corporate objectives to measure 2021 performance of the Company and our employees, including our named executive officers. These corporate objectives, set forth in detail in the table beginning on page 24 of this Amendment, were designed to focus our employees’ efforts around initiatives that we believe are important to our business and contribute to the creation of shareholder value.

Incorporated objectives related to long-term profitability and ESG matters. The 2021 corporate objectives related to profitability, ESG and DIB, as follows:

 

Profitability: achievement of a non-GAAP net income range and operational targets designed to incentivize progress in 2021 toward achievement of the Company’s long-term profitability targets announced in December 2020 for FY 2023 and FY 2024;

 

ESG: advancement of the Company’s ESG strategy, with performance metrics focused on human capital development, employee engagement, corporate responsibility and sustainability; and

 

DIB: progress in fostering an environment of diversity, inclusion and belonging, with metrics focused on talent management and development, pay practices, employee engagement and sentiment, and the launch of new employee resource groups.

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2021 Company Performance Assessment

The Compensation Committee’s evaluation of the Company’s performance against the 2021 corporate objectives serves as the starting point for determining cash performance pay for our named executive officers.

COVID-19 Impacts on the Business

The COVID-19 pandemic continued to impact the Company’s business in 2021, and the Company and the named executive officers took actions to adapt to the evolving environment and mitigate such impacts. At times during the year, we experienced varying degrees of labor or supply chain disruptions at our manufacturing facilities and impacts to the timelines of certain of our early-stage discovery efforts and clinical trials. Our employees worked tirelessly with our clinical investigators and critical R&D and supply chain vendors to continually assess and mitigate these impacts. The pandemic also continued to significantly and negatively impact healthcare providers, patients and caregivers involved in the treatment of serious mental illness and addiction in the U.S. As a result, sales of our proprietary injectable products VIVITROL and ARISTADA and of certain third-party products from which we receive revenue, continued to be negatively impacted to varying degrees.

No Adjustments to 2021 Corporate Objectives or Metrics Used to Assess Performance

The Compensation Committee did not make any adjustments to the 2021 corporate objectives or the pre-determined metrics used to assess performance against such objectives despite pandemic-related disruptions to, and impacts on, the Company’s business.

2021 Corporate Objectives: Company Performance Assessment

The Compensation Committee’s assessment of the Company’s performance against each of the 2021 corporate objectives, as reviewed with the full Board, was as follows:

 

Corporate

Objective

Metrics Used to Assess Performance

Accomplishments

Assessment

Financial and Commercial Goals: 45% weighting

Achieve financial guidance for non-GAAP net income

 

 

Achieve non-GAAP net income (“NGNI”)* of between $60-$100 million, as was set forth in the first issuance of financial guidance in February 2021

 

* See the section entitled “GAAP to Non-GAAP Reconciliation” on page 37 of this Amendment for a GAAP to non-GAAP reconciliation of this financial measure

+  Exceeded this objective by achieving NGNI of ~$129.1 million*, exceeding the high end of both the NGNI range set forth in our first issuance of financial guidance in February 2021 and the NGNI range set forth in our revised financial guidance issued in July 2021 ($85 - $115 million)

This was achieved through thoughtful management of the business and expenses despite continuing COVID-19 challenges and related impacts on our product revenues

Exceeded

Grow use of VIVITROL and ARISTADA among appropriate patients

Achieve VIVITROL and ARISTADA annual net sales of between $315 - $345 million and $260 - $290 million, respectively, as set forth in the first issuance of financial guidance in February 2021

Increase in:

(a)the number of prescribers writing prescriptions for VIVITROL and ARISTADA, as compared to 2020; and

(b)the number of prescriptions of VIVITROL and ARISTADA written by prescribers, as compared to 2020, in each case for clinically appropriate patients

+  Achieved VIVITROL annual net sales of ~$343.9 million, toward the high end of both the range set forth in our first issuance of financial guidance in February 2021 and the range set forth in our revised financial guidance issued in July 2021 ($330 - $345 million)

   Achieved ARISTADA annual net sales of ~$275.4 million, at the midpoint of the range set forth in our first issuance of financial guidance in February 2021 and the low end of the range set forth in our revised financial guidance issued in July 2021 ($275 - $290 million)

   Achieved prescriber and prescription metrics for VIVITROL and ARISTADA as follows, each as compared to 2020:  

Increased the number of prescribing VIVITROL accounts by ~4%

Increased the number of prescriptions for VIVITROL by ~8%, as measured by MOT

Increased the number of prescribers writing ARISTADA prescriptions by ~13%

Increased the number of prescriptions for ARISTADA by ~15%, as measured by MOT

Achieved

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Corporate

Objective

Metrics Used to Assess Performance

Accomplishments

Assessment

Develop and achieve operational targets in support of the Value Enhancement Plan with the Financial Operating Committee

Develop and achieve 2021 operational targets designed to progress the business toward achievement of the NGNI and EBITDA profitability targets announced as part of the Value Enhancement Plan, and reflect such targets in the 2021 budget, as applicable

   Completed a comprehensive review, benchmarking analysis and realignment of our cost structure

   Implemented cost savings initiatives, focused spending on the highest priority programs and significantly reduced 2021 operating expenses

   Maintained relatively flat overall headcount

   Identified and established new processes that drove operational efficiencies

Achieved

Manufacture commercial products and clinical trial material to meet the Company’s goals of quality, quantity, reliability and efficiency

Meet Alkermes proprietary commercial product demand from customers at a rate equal to or greater than 98%

Create an inventory of clinical drug product at depots ready for distribution to clinical study sites at the time clinical study patients are scheduled for dosing

Receive no critical findings from regulatory authority (FDA, U.S. Environmental Protection Agency, U.S. Drug Enforcement Administration (“DEA”)) inspections and audits of the Company’s manufacturing facilities

Achieved this objective, despite ongoing challenges posed by the COVID-19 pandemic on site operations and the continuing need to adapt safety protocols to protect employee health and safety, as evidenced by the following:

   Manufactured quantities of VIVITROL, ARISTADA and LYBALVI to satisfy commercial demand and enable inventory build, with order fulfillment levels in excess of 99% for each product

   Manufactured VUMERITY® bulk drug substance and packaged finished drug product to site capacity

   Clinical drug product was available 99.3% of the time at the point of scheduled patient dosing

   Received no critical findings from regulatory authority inspections or audits of the Company’s manufacturing facilities

Achieved

Launch LYBALVI and meet access and prescription goals

 

Achieve 100% of all launch readiness goals prior to launch

Execute customer engagement strategy:

Achieve 90% of targeted healthcare provider (“HCP”) reach

Achieve more than 25,000 HCP engagements per month

Engage 100% of targeted payers

Build awareness of LYBALVI by increasing aided and unaided product awareness compared to

Q4 2020 baseline

+  Achieved 100% of our launch readiness goals prior to launch in October 2021, including:

Obtained DEA decontrol of samidorphan

Completed disease state education campaigns pre- and post-approval

Published key clinical and health economics and outcomes research manuscripts prior to approval, including those related to the pivotal clinical trial program

Prepared product dossier and engaged with key payers and pharmacy benefit managers

Conducted extensive thought leader and professional society outreach

Met or exceeded all pre-determined access and prescription goals of our customer engagement strategy, including:

Exceeded 2021 annual net sales guidance

Exceeded 90% of targeted HCP reach

Exceeded targeted monthly HCP engagement levels

Engaged 100% of targeted payers

Significantly increased product awareness compared to Q4 2020 baseline (growing aided awareness from 46% to 74% and unaided awareness from 9% to 38%)

Exceeded

Pipeline Goals: 35% weighting

Nominate at least one new candidate for clinical development

Nominate at least one new candidate for clinical development

   Achieved this objective by nominating ALKS 2680, our orexin 2 receptor agonist, for advancement into clinical development

Achieved

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Corporate

Objective

Metrics Used to Assess Performance

Accomplishments

Assessment

Initiate registration study for nemvaleukin alfa and enter into one or more collaborations to expand its clinical use

Based on FDA feedback, design two studies—one of which has potential to serve as a registrational study for mucosal melanoma and one of which has potential to serve as a registrational study for PROC—and initiate one of these studies

Enter into one or more collaborations designed to expand potential clinical use

   Completed design of, and initiated, two potential registrational studies of nemvaleukin alfa, one in mucosal melanoma (ARTISTRY-6) and one in PROC (ARTISTRY-7)

   Nemvaleukin alfa received from the FDA both Fast Track designation and Orphan Drug Designation for mucosal melanoma and Fast Track designation for PROC in combination with pembrolizumab

   Entered into clinical trial collaboration and supply agreement with Merck for ARTISTRY-7, resulting in significant savings through supply of pembrolizumab for use in the study

Achieved

Corporate Responsibility Goals: 20% weighting

Engage with patient advocacy and public policy stakeholders to improve the treatment systems for severe mental illness and addiction

 

 

 

Appropriately engage in concerted efforts to maintain existing, and secure new, federal funding and state appropriations (in certain specified states) for use with long-acting injectables (“LAIs”) for the treatment of opioid or alcohol dependence or LAIs or oral medication for the treatment of schizophrenia or bipolar I disorder

Advance policies to increase access to (i) VIVITROL for appropriate persons with alcohol dependence or opioid dependence, (ii) ARISTADA for appropriate patients with schizophrenia, in each case in clinically indicated settings of care, and (iii) LYBALVI for appropriate persons with schizophrenia or bipolar I disorder

   Through federal and state policy engagement and the appropriations process, helped secure more than $1 billion in funding was allocated for the treatment of serious mental illness (“SMI”) and addiction

Federal policy highlights in 2021 included expansion of, and/or increased funding for, substance use disorder and SMI treatment grant programs, Veterans Administration’s appropriations for opioid prevention and treatment programs and alcohol use disorder (“AUD”) education

State policy highlights in 2021 included support of the passage of more than 130 appropriations and/or policy reforms in 30 states and four primary domains, including: expanded access to medications (including LAIs) for treatment of AUD, opioid use disorder (“OUD”) and SMI; expanded funding to states for substance abuse treatment programs; legislation allowing for Medicaid coverage of pharmacist administration of LAIs; and advancement of use of opioid litigation settlement funds to support access to all FDA-approved medications for OUD

Achieved

Foster an environment of diversity, inclusion and belonging to enhance our culture

Develop robust talent management plans focused on recruiting, development and retention to increase the representation of women and people of color, particularly at senior levels

Earn positive employee ratings in respect of our DIB efforts

Launch at least two new employee resource groups

Review and execute Company strategy for continued evaluation of pay practices and develop action plans to address areas of potential improvement

Focus on diversity education and awareness

Develop a 2022 diversity-related performance objective for senior leaders

+  Increased the representation of women and people of color in our workforce:

85% of new hires, and 69% of internal promotions, in each case at senior director level and above, were diverse in terms of gender and/or race/ethnicity

+  Achieved scores > 70% on all DIB-focused questions in our employee engagement survey

   Launched two new employee resource groups, expanding impact and reach within the Company

   Reviewed and updated our strategy related to the evaluation of pay practices and identified areas for improvement

+  Held 15 DIB-related education, awareness, and  

        training programs with approximately 2,700 overall

        employee engagements across the organization

+  Established a new DIB Executive Committee, evolved the strategic direction of the Company’s DIB initiatives and defined strategic DIB pillars

   Developed a 2022 diversity-related performance objective for all senior leaders

Exceeded

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Corporate

Objective

Metrics Used to Assess Performance

Accomplishments

Assessment

Adapt and strengthen the Company’s organizational infrastructure and capabilities to meet the needs of the Company’s business while maintaining its corporate values

Continue to develop and advance the Company’s ESG strategy—including in respect of energy, carbon, water and waste reductions; Environment, Health, Safety and Security excellence; human capital development; ongoing COVID-19 response; and community support and involvement—and continue to integrate such strategy into the operation of the Company’s business

Publish a 2021 Corporate Responsibility Report or equivalent document detailing the Company’s efforts in respect of ESG matters

Develop strong organizational talent, including through talent assessments at all levels and succession planning for key senior roles, and incorporate a focus on DIB into these assessments and planning efforts, with the results for senior level employees to be reviewed by the Nominating and Corporate Governance Committee of the Board (the “Nominating and Corporate Governance Committee”)

Identify, and create initiatives and strategies to address, areas of potential improvement based on the results of the 2020 employee engagement survey

Earn positive employee ratings in respect of company culture and values

   Engaged an independent third-party to conduct a focused survey of leaders across our operations functions to identify the environmental focus areas of highest importance to our business and formed a cross-functional steering team to promote and enhance enterprise-wide focus on such areas

   Established a social responsibility core working group to develop a cohesive social responsibility strategy

   Continued to successfully navigate the complex and evolving COVID-19 landscape in our continued effort to protect the health, safety and well-being of our employees while advancing our business objectives

   Published our fourth Corporate Responsibility Report in October 2021, highlighting our ESG activities, environmental performance data, new DIB initiatives, and ways in which the Company has continued to adapt to the COVID-19 environment

   Completed a robust talent assessment and succession planning process, focused on senior director level and above talent, which included a strong focus on DIB, and reviewed results of the assessment with the Nominating and Corporate Governance Committee

   In response to feedback from our 2020 employee engagement survey:

Launched communication initiatives to increase visibility and awareness of our company strategy and pipeline

Expanded company DIB-focused education and engagement offerings

Introduced new flexible work guidelines, including hybrid and remote work options

Focused on learning and career development, including enhancements to our individual development plan process and launch of a new LinkedIn Learning platform

   Conducted 2021 employee engagement survey, with more than 70% of scores at or above engagement survey benchmarks

   Despite multiple challenges throughout the year (including those related to labor market trends and COVID-19 impacts), our attrition rate was in-line with external industry data

Achieved

 

2021 Company Performance Rating and Payout Percentage

The Compensation Committee considered the range of the Company’s accomplishments against its 2021 corporate objectives and the relative weightings of the three categories of objectives, and determined an overall Company performance assessment of ‘ACHIEVED’, even though three of the ten objectives were exceeded and all others were achieved.

Company performance serves as a significant factor, together with individual performance for named executive officers other than the CEO, in the Compensation Committee’s determination of individual cash performance payouts for our named executive officers. Taking into account the Company’s strong performance against its 2021 corporate objectives, the Compensation Committee approved a payout percentage of 110% of target performance pay (the “Company Performance Payout Percentage”). This represents the high end of the Compensation Committee’s pre-determined payout percentage range of 90%-110% for an overall assessment of ‘ACHIEVED’, in recognition that three of the ten objectives were exceeded (and all others were achieved).

2021 Performance Assessment for Mr. Pops

In determining Mr. Pops’ 2021 cash performance payout, in addition to the Company’s performance against the 2021 corporate objectives, the Compensation Committee considered that Mr. Pops is responsible for creating long-term value for the Company’s shareholders. Despite strong share price performance throughout the majority of 2021, the Company’s share price declined beginning in November 2021 following its announcement of the partial termination by Janssen Pharmaceutica N.V. (“Janssen”) of certain license agreements and the expected resulting loss of certain royalty revenues beginning in February 2022. In January 2022, taking into consideration both the Company’s strong performance in 2021, as measured against the 2021 corporate objectives, and the impact of Janssen’s actions on the Company’s share price, the Compensation Committee used its discretion to reduce the 2021 cash performance payout for Mr. Pops to 105% of his performance pay target.

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2021 Individual Performance Assessments

Each named executive officer was responsible for contributing to the achievement of the Company’s 2021 corporate objectives, individually and as part of the leadership team, and to the overall management and success of the business.

Individual Performance for Named Executive Officers other than Mr. Pops

In January 2022, Mr. Pops presented to the Compensation Committee, and the Compensation Committee considered, an assessment of the individual performance during 2021 of each of the named executive officers (other than Mr. Pops) still employed by the Company at such time. This assessment included each named executive officer’s overall leadership of their respective organization and the contributions of each named executive officer to the business and to the Company’s achievement of its 2021 corporate objectives. Specifically, the Compensation Committee considered the following contributions and achievements for each named executive officer:

Named Executive Officers - Individual Contributions

Iain M. Brown                                          

Senior Vice President, Chief Financial Officer

   Seamless transition into the role of Chief Financial Officer, including strong leadership of the Finance, Procurement, Travel & Expense and Business Planning organizations.

+  Contributed significantly to the achievement of our financial objectives in 2021, despite the impacts of the COVID-19 pandemic on our topline, including:

–   Managed efforts to reduce costs, optimize efficiencies and ensure that financial performance remained on track to exceed 2021 financial guidance for non-GAAP net income, resulting in the Company raising financial guidance in July 2021.

   Achieved 100% financial compliance during 2021.

+ Successfully refinanced and upsized the Company’s external debt facility to extend maturity by three years at a similar interest rate.

  Contributed to the achievement of our corporate responsibility objectives in 2021, including retention of key employees and support of DIB activities, including supporting the establishment of a new employee resource group.

Craig C. Hopkinson, M.D.                                

Executive Vice President, Research and Development and Chief Medical Officer

Led our R&D organization in implementation of our evolved R&D strategy, focused on resource optimization, prioritized investment and disciplined portfolio management.

+  Contributed significantly to achievement of our pipeline and commercial objectives in 2021, including:

–   Obtained FDA approval of LYBALVI and prepared for its commercial launch, including through successful completion of a new drug application resubmission, and execution of comprehensive medical and scientific communications plans.

–   Progressed the nemvaleukin alfa program, including initiation of a potential registrational study in each of mucosal melanoma (ARTISTRY-6) and PROC (ARTISTRY-7), and securing FDA Fast Track designations in both indications and FDA Orphan Drug Designation for the treatment of mucosal melanoma.

–   Advanced our early-stage pipeline, including through nomination of ALKS 2680 into the clinic and initiation of a phase 1 first-in-human study for ALKS 1140 ahead of anticipated timelines.

Blair C. Jackson                                        

Executive Vice President, Chief Operating Officer

+  Seamless transition into the role of Chief Operating Officer and strong overall oversight and management of our operations, quality, finance, business development, alliance management, new product planning, data analytics and information technology organizations.

+  Contributed significantly to the achievement of our financial, commercial and pipeline objectives in 2021, including:

–   Achieved significant reduction in operating expenses through comprehensive review and realignment of cost structure, including refocusing of spend on highest priority programs, and identification and establishment of new processes to drive efficiencies.

–   Worked with the operations team to secure approval of LYBALVI and further enhance rigor around technology transfer and manufacturing readiness, including through implementation of enhanced chemistry, manufacturing and controls (CMC) governance and readiness models for our development products.

   Provided corporate strategic input and leadership to identify and advance partnership opportunities, establish development plans for our pipeline and enhance capabilities.

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Named Executive Officers - Individual Contributions

David J. Gaffin                                          

Senior Vice President, Chief Legal Officer, Chief Compliance Officer and Secretary

   Strong overall leadership of our legal-IP and compliance organizations to provide strategic legal support across the organization, including in respect of all aspects of drug development, manufacturing and commercialization, business development, and public company governance and securities matters.

+  Contributed significantly to the achievement of our financial and commercial, pipeline and corporate responsibility objectives in 2021, including:

–   Managed, and achieved positive results in respect of, litigation matters, including dismissal (and successful defense against appeal) of a securities class action and voluntary dismissal of product liability litigation.

–   Collaborated cross-functionally on the Company’s strategies and activities in support of securing FDA approval of LYBALVI and related communications with the FDA.

+ Contributed significantly to negotiation of a beneficial settlement with an activist shareholder that resulted in a favorable appointment of a new director to our Board in November 2021.

   Led extensive shareholder engagement and preparedness efforts, collaborated with the Board and the Compensation Committee to address shareholder feedback on governance and compensation matters.

Recommendations of Mr. Pops

Based on the above contributions, Mr. Pops made recommendations to the Compensation Committee in respect of proposed performance payout percentages for each named executive officer.

 

2021 Cash Performance Payouts

In January 2022, in determining the cash performance payouts for each of the named executive officers, the Compensation Committee considered overall Company performance against the 2021 corporate objectives (and the corresponding Company Performance Payout Percentage), the individual performance of each of our named executive officers (other than Mr. Pops) as set forth above, the performance pay target and performance pay range set by the Compensation Committee in December 2020 for each named executive officer, data from the Compensation Consultant regarding cash performance pay for executive officers of our peer group companies, comparable market data for experienced executive officers in the biopharmaceutical industry and the recommendations of Mr. Pops with respect to cash performance pay amounts for each named executive officer (other than Mr. Pops). In consideration of the foregoing, the Compensation Committee approved the following 2021 cash performance payout amounts for each of our named executive officers still employed by the Company at such time:

Named Executive Officer*

2021 Performance Payout Amount

 

 

2021 Target Performance Pay as a % of Base Salary

 

 

2021 Actual Performance Pay as a % of Base Salary

 

 

2021 Actual Performance Pay as a % of Target Performance Pay

 

Richard F. Pops

$

1,161,220

 

 

 

100

%

 

 

105

%

 

 

105

%

Iain M. Brown

$

287,500

 

 

 

50

%

 

 

58

%

 

 

115

%

Craig C. Hopkinson, M.D.

$

442,200

 

 

 

60

%

 

 

66

%

 

 

110

%

Blair C. Jackson

$

372,600

 

 

 

60

%

 

 

69

%

 

 

115

%

David J. Gaffin

$

337,094

 

 

 

50

%

 

 

58

%

 

 

115

%

*Mr. Frates terminated his employment with the Company in January 2021 and was therefore not eligible for a performance payout.

Long-Term Incentive Compensation – Annual Equity Grant

We utilize long-term equity awards to align executive compensation and performance, incentivize the advancement of our critical business objectives, promote the creation of long-term shareholder value and reward, motivate and retain our employees. Consistent with this approach, a significant portion of our named executive officers’ total annual compensation is in the form of long-term equity awards. Our annual equity grant is typically made during February of each year, following completion of our annual performance assessment cycle.

2021 Equity Incentive Mix – Performance Awards for all Named Executive Officers

The Compensation Committee annually considers the appropriate mix of equity awards for our named executive officers and incorporates performance-based equity awards when it determines that such awards would not promote excessive risk taking that could adversely impact the Company or its research, development or commercialization of pharmaceutical products. To better align the interests of management with those of our shareholders, since 2020, we have enhanced the link between pay and performance by incorporating PRSUs into the annual equity grants awarded to all employees at senior vice president level and above, including our named executive officers.

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In 2021, the Compensation Committee granted the following mix of performance-vesting and time-vesting equity awards to each of our named executive officers as part of our 2021 annual equity grant:  

for our CEO, approximately 51% of his total target equity award value was in the form of PRSUs that vest, if earned, following a three-year performance period, with his remaining target equity award value comprised of time-vesting stock options that vest in four equal annual installments commencing on the first anniversary of the grant date; and

for our other named executive officers, approximately 25% of their total target equity award value was in the form of PRSUs that vest, if earned, following a three-year performance period, with their remaining target equity award value comprised of approximately 50% time-vesting stock options and approximately 25% time-vesting restricted stock unit awards, all of which vest over four equal annual installments commencing on the first anniversary of the grant date.

 

 

2021 LTIP Design In Line with Shareholder Feedback

In designing the 2021 LTIP, the Compensation Committee sought to further enhance the alignment between pay and performance. In this context, the 2021 LTIP included the following features, as illustrated in the chart below:

PRSUs subject to multiple objective, performance-based goals, including financial goals (40% weighting), commercial goals (20% weighting) and pipeline goals (40% weighting);

a three-year performance period for achievement of each of the performance goals; and

a TSR modifier tied to relative share price performance (as compared to the Nasdaq Biotechnology Index) over the three-year performance period, the impact of which may be to increase or decrease the total number of vested shares underlying the PRSUs by up to 25%.

Performance goals and relative weightings aligned with strategic focus and creation of shareholder value. In establishing the 2021 LTIP performance goals and relative weightings, the Compensation Committee took into account the Company’s prior year performance (including share price performance) and the Company’s ongoing and future strategic areas of focus. The Compensation Committee identified potential commercial and development milestones over the upcoming three-year period that it believed would be appropriately challenging for the Company, the achievement of which would require strong commercial and R&D performance and a high level of effort and execution by our named executive officers. These milestones included (1) commercial performance objectives related to sales of our proprietary products, (2) pipeline performance goals related to the successful development of certain early-stage and late-stage products, and (3) consistent with the Company’s announcement in December 2020 of a Value Enhancement Plan focused on profitability, a financial performance goal reflecting the Company’s announced long-term profitability targets for FY 2023, consisting of non-GAAP net income margin equal to 25% of the Company’s total revenues and EBITDA margin of 20% of the Company’s total revenues. See the section entitled “GAAP to Non-GAAP Reconciliation” on page 37 of this Amendment for information regarding these non-GAAP financial targets.

Vesting and TSR Modifier. The 2021 LTIP PRSUs vest based on the Compensation Committee’s determination following the end of the three-year performance period as to the level of achievement of each of the performance goals, with corresponding payouts ranging from 50% to 150% based on achievement of threshold, target or stretch performance, with ultimate vesting subject to the relative TSR modifier.

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How Sizes of Awards Were Determined in 2021

The Compensation Committee grants all equity awards to our named executive officers based on an aggregate target dollar value for each award.

Determination of 2021 Target Award Values

In February 2021, in determining the target aggregate dollar value of the equity awards to be granted to each of our named executive officers for 2021, the Compensation Committee took into consideration comparable peer group equity award value data provided by the Compensation Consultant (see the section entitled “2021 Peer Group” on page 19 of this Amendment for discussion of our revised peer group) and targeted the 50th percentile of such peer group for the CEO and, for our other named executive officers, targeted around the 50th percentile of such peer group, with individual adjustments for named executive officers (other than the CEO) below or above the 50th percentile based on the criticality of each executive’s skillset and expected future contributions, the overall equity position of each executive and the retentive value of such overall equity position given our share price. The Compensation Committee also took into account the importance of a strong management team to execute on the Company’s medium- and long-term business strategies and to create shareholder value, particularly in light of the challenges that the COVID-19 pandemic continued to pose on the business. The Compensation Committee also evaluated the Company’s performance in 2020 and shareholder sentiment in respect of such performance and, for named executive officers other than Mr. Pops, the recommendations of Mr. Pops with respect to equity award values for each named executive officer based on his assessment of their individual performance in 2020, the criticality of their skillset and their expected future contributions to achievement of the Company’s long-term objectives.

Conversion into Share Amounts

The Compensation Committee converts the target aggregate dollar value of each award into a number of underlying ordinary shares using per share value based on the closing price of our ordinary shares on the Nasdaq Global Select Market on the date of grant and, for awards of stock options, the Black-Scholes valuation model. Based upon the factors and methodology discussed above, the Compensation Committee granted the following awards to each of our named executive officers for 2021:

Named Executive Officer*

 

Time-Vesting Stock Options

 

 

Time-Vesting Restricted Stock Unit Awards

 

 

Performance-Vesting Restricted Stock Unit Awards

 

Richard F. Pops

 

 

342,187

 

 

 

 

 

 

225,545

 

Iain M. Brown

 

 

113,754

 

 

 

27,877

 

 

 

27,877

 

Craig C. Hopkinson, M.D.

 

 

196,484

 

 

 

48,151

 

 

 

48,151

 

Blair C. Jackson

 

 

155,119

 

 

 

38,014

 

 

 

38,014

 

David J. Gaffin

 

 

118,925

 

 

 

29,144

 

 

 

29,144

 

*Mr. Frates terminated his employment with the Company in January 2021 and therefore did not receive an equity award for 2021.

For additional information about the equity awards granted to our named executive officers in 2021, see the 2021 Grants of Plan-Based Awards table on page 40 of this Amendment. These awards are subject to early vesting in certain instances as described in the Alkermes plc 2018 Stock Option and Incentive Plan, as amended (the “2018 Plan”) and in the section entitled “Potential Payments upon Termination or Change in Control” beginning on page 45 of this Amendment.

2020 Long-Term Incentive Plan Achievements

In 2020, the Compensation Committee granted PRSUs (the “2020 PRSUs”) to all employees at senior vice president level and above, including our named executive officers. As set forth in the below chart, the 2020 PRSUs vest based on the achievement of specified commercial and pipeline goals over a three-year performance period, and are subject to a TSR modifier tied to relative share price performance (as compared to the Nasdaq Biotechnology Index) over the three-year performance period that may increase or decrease the total number of vested shares underlying the 2020 PRSUs by up to 25%.

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In September 2021, the Compensation Committee determined that the Company had achieved two of the three pipeline goals underlying the 2020 PRSUs as follows: (1) with respect to the goal of advancing nemvaleukin alfa into a registrational study, the Company advanced nemvaleukin alfa into ARTISTRY-6 for mucosal melanoma and (2) with respect to the goal of delivering topline results from a phase 1 proof of pharmacology study of an early-stage analgesic candidate, the Company delivered topline results, including pharmacology data, from a phase 1 single ascending dose study.

In accordance with the pre-determined vesting schedule for the 2020 PRSUs, 37.5% of the total target number of shares underlying the 2020 PRSUs vested upon such Compensation Committee determination of achievement, with the remaining 12.5% of the total target number of shares underlying the 2020 PRSU pipeline goals scheduled to vest on the third anniversary of the grant date. The commercial performance goal, which underlies the remaining 50% of the total target number of shares underlying the 2020 PRSUs, will be assessed at the end of the performance period.

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Additional Compensation Information

Share Ownership and Holding Guidelines

Our Board members and “officers” (as such term is defined in Section 16a-1(f) of the Exchange Act) are subject to our minimum share ownership and holding guidelines (our “Share Ownership and Holding Guidelines”). These Share Ownership and Holding Guidelines are designed to align the interests of our Board members and officers with those of our shareholders by encouraging our Board members and officers to have a meaningful financial stake in our long-term success. These Share Ownership and Holding Guidelines establish minimum required levels of share ownership value by position as set forth below:

 

 

 

 

Position

 

Required Share Ownership Value

CEO

 

6.0 times base salary

Board Members*

 

3.0 times annual Board member cash retainer

Other Officers*

 

1.0 times base salary

 

* First measurement date is the date that is at least five (5) full years from the date of election to the Board or designation as an officer, as applicable.

For purposes of determining the value of shares owned by a Board member or officer under our Share Ownership and Holding Guidelines, we include the value of all shares directly or beneficially owned by such Board member or officer and the value of all unvested time-vesting restricted stock unit awards held by such Board member or officer. Unexercised stock options, whether vested or unvested, and unvested performance-vesting restricted stock unit awards are not included in determining the value of shares owned pursuant to these Guidelines. We assess compliance with our Share Ownership and Holding Guidelines annually on the first business day of each year, using the 60-day trailing average closing price of our shares as of such date as the value of our shares for measurement purposes.

Our Share Ownership and Holding Guidelines require that each officer retain 50% of the shares that they acquire upon the vesting of restricted stock unit awards and/or the exercise of stock options (net of tax liability and any amounts used to pay exercise price, as applicable) until such officer meets their required level of share ownership value.

Compliance with the Share Ownership and Holding Guidelines is monitored by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee has determined that Mr. Pops and all other directors and officers subject to the guidelines were in compliance with their respective required share ownership value as of the measurement date.

A current copy of our Share Ownership and Holding Guidelines can be found on the Corporate Governance page of the Investors section of our website at www.alkermes.com.

Clawback Policy

In May 2021, our Board expanded our Clawback policy to apply to certain cash-based compensation in addition to equity-based compensation.

Under the expanded policy, our current and former “officers” (as such term is defined in Section 16a-1(f) of the Exchange Act), including our named executive officers, are subject to our Clawback Policy, under which, in the event that the Board determines that (i) an officer engaged in fraud or intentional misconduct that requires a material restatement of our financial results, and (ii) such fraud or intentional misconduct resulted in an incorrect determination that an incentive compensation performance goal had been achieved, then (iii) the Board may take appropriate action to recoup from such officer any equity-based incentive compensation awarded on or after March 23, 2016 and any cash-based incentive compensation awarded on or after May 19, 2021 that the Board determines had been paid to such officer as a result of such incorrect determination during the three-year period preceding the filing of such material restatement of our financial results.

A current copy of our Clawback Policy can be found on the Corporate Governance page of the Investors section of our website at www.alkermes.com.

Retirement Benefits

The terms of our 401(k) Savings Plan (“401(k) Plan”) provide for broad-based participation by our executive officers and employees resident in the U.S. Under the 401(k) Plan, all of our U.S. employees are eligible to receive matching contributions from the Company. Our matching contribution for the 401(k) Plan for 2021 was as follows: dollar for dollar on each participant’s eligible compensation up to a maximum of 5% of such compensation, subject to applicable U.S. federal limits.

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Other Benefits

Executive officers are eligible to participate in our medical, dental and life insurance employee benefit plans on the same terms as all other employees. We may also provide relocation expense reimbursement, which is negotiated on an individual basis with employees, including executive officers, in a manner consistent with our internal guidelines.

Executive officers are also entitled to certain benefits upon death or disability. Under our flexible benefits program, our executive officers receive long-term disability coverage that will pay up to 65% of their base salary, up to a monthly maximum of $27,500, during disability and, in cases of catastrophic disability, a supplemental amount based on their base salary. Also, under our flexible benefits program, we provide life insurance coverage for all of our eligible U.S. employees, including the named executive officers, equal to two times base salary, with a maximum of $1,000,000 in coverage paid by the Company. In addition to life insurance, U.S. employees, including the named executive officers, are also covered by accidental death and dismemberment insurance benefits, providing up to two times base salary in coverage paid by the Company, up to a maximum of $1,000,000 for accidental death or loss of hand, foot or eyesight. In addition, all U.S. employees, including the named executive officers, are eligible to participate in optional supplemental life insurance up to a maximum of $1,000,000.

Post-Termination Compensation and Benefits

We have a program in place under which each of our named executive officers receives severance benefits if such named executive officer is terminated without “cause” (as defined in each executive officer’s employment agreement with the Company) or resigns for “good reason” (e.g., a material diminution in their responsibilities, authority, powers, functions, duties or compensation or a material change in the geographic location at which such executive officer must perform their employment), subject to signing a general release of claims. Additionally, each named executive officer receives severance benefits if, within a period of time following a corporate transaction or a change in control, such executive officer is terminated without “cause” or resigns for “good reason.” The terms of, and the amounts payable under, these arrangements are described in more detail below under “Potential Payments upon Termination or Change in Control”. We provide these severance arrangements because we believe that, in a competitive market for talent, severance arrangements are necessary to attract and retain high quality executives. In addition, the change in control benefit allows and incentivizes executives to maintain their focus on our business during a period when they otherwise might be distracted.

Tax and Accounting Considerations

Under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code” and such section, “Section 162(m)”), compensation paid to each of the Company’s “covered employees” that exceeds $1 million per taxable year is generally non-deductible unless the compensation qualifies for certain grandfathered exceptions (including the “performance-based compensation” exception) for certain compensation paid pursuant to a written binding contract in effect on November 2, 2017 and not materially modified on or after such date.

Although the Compensation Committee will continue to consider tax implications as one factor in determining executive compensation, the Compensation Committee also looks at a number of other factors in making its decisions and retains the flexibility to provide compensation to the Company’s named executive officers in a manner consistent with the goals of the Company’s executive compensation program and the best interests of the Company and its shareholders. The Compensation Committee also retains the flexibility to modify compensation that was initially intended to be exempt from the deduction limit under Section 162(m) if it determines that such modifications are consistent with the Company’s business needs.

Under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 718—Stock Compensation, or ASC 718, the Company is required to estimate and record an expense for each award of equity-based compensation over the vesting period of the award. We record share-based compensation expense on an ongoing basis in accordance with ASC 718.

Equity Grant Timing

Annual employee equity grants, including grants to executive officers, are typically granted after the announcement of the Company’s year-end financial results and after the Company’s window to trade in Company securities has reopened (generally 48 hours after the announcement of such financial results). New hire equity grants are typically granted on the first Wednesday following the first Monday (or the first business day thereafter if such day is a holiday for which Nasdaq is closed) of each month. For information about non-employee director equity compensation, see the discussion in the section entitled “Non-Employee Director Compensation Program—Equity Compensation” on page 48 of this Amendment. For additional information about our equity compensation plans, see the section entitled “Equity Compensation Plan Information” on page 51 of this Amendment.

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Risk Assessment Concerning Compensation Practices and Policies

The Compensation Committee, at the direction of the Board, reviewed our 2021 compensation policies and practices and concluded that these policies and practices, as structured, are not reasonably likely to have a material adverse effect on the Company.

Specifically, our compensation programs contain many features that mitigate the likelihood of inducing excessive risk-taking behavior. These features include:

 

a balance of fixed cash compensation and variable cash and equity compensation, with variable compensation tied both to short- and long-term objectives and the long-term value of our share price;

 

Compensation Committee discretion in determining incentive program payouts and equity awards;

 

limits on payouts under our annual performance incentive plans;

 

share ownership and holding guidelines applicable to our directors and officers;

 

application of our Clawback Policy and the anti-hedging and anti-pledging provisions in our Insider Trading Policy; and

 

mandatory training on our policies that educate our employees on appropriate behaviors and the consequences of taking inappropriate actions.

The Compensation Committee also asked its independent compensation consultant to do a specific risk assessment of the Company’s 2021 cash and equity incentive plans and the independent compensation consultant determined there to be a low risk level under each of the factors assessed.


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Compensation Committee Report

No portion of this compensation committee report shall be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act through any general statement incorporating by reference in its entirety the annual report in which this compensation committee report appears, except to the extent that the Company specifically incorporates this compensation committee report or a portion of it by reference. In addition, this compensation committee report shall not be deemed ‘soliciting material’ or deemed to be ‘filed’ under either the Securities Act or the Exchange Act.

The Compensation Committee of the Board, which is comprised solely of (i) independent directors within the meaning of applicable Nasdaq Rules, (ii) outside directors within the meaning of Section 162 of the Code, and (iii) non-employee directors within the meaning of Rule 16b-3 under the Exchange Act, has reviewed and discussed with management the Compensation Discussion and Analysis section to be included in the Company’s annual report and/or proxy statement for 2021. In reliance on the reviews and discussions referred to above, the Compensation Committee has approved the Compensation Discussion and Analysis, and the Board has approved the Compensation Discussion and Analysis for inclusion in the Company’s annual report and/or proxy statement for 2021.

Respectfully submitted by the Compensation Committee,

Nancy J. Wysenski (Chair)

Richard B. Gaynor, M.D.

Brian P. McKeon

 


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Compensation Committee Interlocks and Insider Participation

The directors who served as members of the Compensation Committee at times during 2021 were David W. Anstice AO, Richard B. Gaynor, M.D., Brian P. McKeon and Nancy J. Wysenski, and former director Paul J. Mitchell, none of whom is currently, or ever has been, an officer or employee of the Company, or had any relationship that is required to be disclosed in this Amendment as a transaction with a related party. During 2021, none of our executive officers served as a member of the board of directors or the compensation committee (or other board committee performing equivalent functions) of any entity that had one or more of its executive officers serving on our Compensation Committee or our Board.

GAAP to Non-GAAP Reconciliation

This Amendment includes information about non-GAAP net income, a financial measure that is not prepared in accordance with GAAP. This non-GAAP measure is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similar measures presented by other companies.

Non-GAAP net income adjusts for certain one-time and non-cash charges by excluding from GAAP results: share-based compensation expense; amortization; depreciation; non-cash net interest expense; certain other one-time or non-cash items; and the income tax effect of these reconciling items.

The Company’s management and the Board utilize this non-GAAP financial measure to evaluate the Company’s performance. The Company provides this non-GAAP measure of the Company’s performance to investors because management believes that this non-GAAP financial measure, when viewed with the Company’s results under GAAP and the accompanying reconciliations, is useful in identifying underlying trends in ongoing operations. However, non-GAAP net income is not a measure of financial performance under GAAP and, accordingly, should not be considered as an alternative to GAAP measures as an indicator of operating performance. Further, non-GAAP net income should not be considered a measure of the Company’s liquidity.

A reconciliation of GAAP net loss to non-GAAP net income, as provided in this Amendment is as follows:

 

Condensed Consolidated Statements of Operations - GAAP

 

Year Ended

 

(In thousands)

 

December 31, 2021

 

Net Loss — GAAP

 

$

(48,169

)

Adjustments:

 

 

 

 

Share-based compensation expense

 

 

87,623

 

Depreciation expense

 

 

40,505

 

Amortization expense

 

 

38,148

 

Income tax effect related to reconciling items

 

 

6,994

 

Non-cash net interest expense

 

 

469

 

Change in the fair value of contingent consideration

 

 

1,427

 

Debt refinancing

 

 

2,109

 

Non-GAAP Net Income

 

$

129,106

 

 

Non-GAAP Financial Targets

This Amendment includes information about certain non-GAAP financial targets, including non-GAAP net income margin (non-GAAP net income/total revenue) and EBITDA margin (EBITDA/total revenue). These non-GAAP financial measures are not prepared in accordance with GAAP, are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. Non-GAAP net income adjusts for certain one-time and non-cash charges by excluding from GAAP results: share-based compensation expense; amortization; depreciation; non-cash net interest expense; certain other one-time or non-cash items; and the income tax effect of these reconciling items. EBITDA represents: earnings before interest, taxation, depreciation and amortization; earnings include share-based compensation expense.

 

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Executive Compensation Tables

Summary Compensation Table

The following table presents and summarizes the compensation paid to, or earned by, our named executive officers for 2021 and, to the extent required by SEC disclosure rules, 2020 and 2019:

Name and Principal Position

 

Year

 

Salary ($)

 

 

Bonus ($)

 

 

Stock

Awards ($)

 

 

Option

Awards ($)

 

 

Non-Equity

Incentive Plan

Compensation

($)

 

 

Change in

Pension Value

and Nonqualified

Deferred

Compensation

Earnings ($)

 

 

All Other

Compensation

($)

 

 

Total ($)

(a)

 

(b)

 

(c)

 

 

(d)

 

 

(e)(2)

 

 

(f)(3)

 

 

(g)(4)

 

 

(h)

 

 

(i)(5)

 

 

(j)

Richard F. Pops

 

2021

 

 

1,105,923

 

 

 

 

 

 

3,101,695

 

 

 

3,463,250

 

 

 

1,161,220

 

 

 

 

 

 

14,500

 

 

 

8,846,588

Chairman and Chief Executive Officer

 

2020

 

 

1,073,712

 

 

 

 

 

 

2,551,714

 

 

 

3,489,121

 

 

 

912,655

 

 

 

 

 

 

14,500

 

 

 

8,041,702

 

 

2019

 

 

1,037,400

 

 

 

 

 

 

4,221,072

 

 

 

8,384,675

 

 

 

980,000

 

 

 

 

 

 

14,000

 

 

 

14,637,147

Iain M. Brown

 

2021

 

 

500,000

 

 

 

 

 

 

933,373

 

 

 

1,151,296

 

 

 

287,500

 

 

 

 

 

 

14,500

 

 

 

2,886,669

Senior Vice President, Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

James M. Frates(1)

 

2021

 

 

17,343

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

194,776

 

 

 

212,119

Former Senior Vice President, Chief Financial Officer

 

2020

 

 

575,460

 

 

 

 

 

 

786,717

 

 

 

996,096

 

 

 

 

 

 

 

 

 

14,500

 

 

 

2,372,772

 

 

2019

 

 

556,000

 

 

 

 

 

 

758,881

 

 

 

1,475,360

 

 

 

278,000

 

 

 

 

 

 

14,000

 

 

 

3,082,241

Craig C. Hopkinson, M.D.

 

2021

 

 

670,000

 

 

 

 

 

 

1,612,178

 

 

 

1,988,600

 

 

 

442,200

 

 

 

 

 

 

14,500

 

 

 

4,727,478

Executive Vice President, Research and

 

2020

 

 

650,000

 

 

 

 

 

 

1,298,079

 

 

 

1,643,556

 

 

 

351,000

 

 

 

 

 

 

14,500

 

 

 

3,957,135

Development and Chief Medical Officer

 

2019

 

 

621,000

 

 

 

 

 

 

895,675

 

 

 

1,737,537

 

 

 

388,125

 

 

 

 

 

 

14,000

 

 

 

3,656,337

Blair C. Jackson

 

2021

 

 

540,000

 

 

 

 

 

 

1,272,775

 

 

 

1,569,949

 

 

 

372,600

 

 

 

 

 

 

14,500

 

 

 

3,769,824

Executive Vice President, Chief Operating Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David J. Gaffin

 

2021

 

 

586,250

 

 

 

 

 

 

975,790

 

 

 

1,203,632

 

 

 

337,094

 

 

 

 

 

 

14,500

 

 

 

3,117,266

Senior Vice President, Chief Legal Officer,

 

2020

 

 

569,250

 

 

 

 

 

 

904,709

 

 

 

1,145,513

 

 

 

256,163

 

 

 

 

 

 

14,500

 

 

 

2,890,136

Chief Compliance Officer and Secretary

 

2019

 

 

550,000

 

 

 

 

 

 

895,675

 

 

 

1,737,537

 

 

 

343,750

 

 

 

 

 

 

14,000

 

 

 

3,540,962

 

Notes to Summary Compensation Table

(1)

Mr. Frates terminated his employment with the Company in January 2021.

(2)

The amounts in column (e) reflect the aggregate grant date fair value of stock awards granted during 2021, 2020 and 2019, as indicated, computed in accordance with ASC 718. The weighted average grant date fair values of stock awards granted during these years are included in footnote 14 “Share-Based Compensation” to our consolidated financial statements for the year ended December 31, 2021 included in the 2021 Annual Report.

Included in the stock awards granted to the named executive officers in 2021 are PRSUs (the “2021 PRSUs”), which, in order to vest, require achievement of certain financial, commercial and pipeline performance conditions over a three-year performance period and are subject to a relative TSR modifier at the end of the performance period. For additional detail regarding the 2021 PRSUs, see the section entitled “Long-Term Incentive Compensation – Annual Equity Grant” beginning on page 29 of this Amendment. The grant date fair value of these performance-vesting restricted stock unit awards was determined in accordance with

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ASC 718 based upon the then-probable outcome as of the date of grant of each of the performance conditions underlying such awards and, because of the market condition component of the awards, was computed using a Monte Carlo simulation. For purposes of this grant date fair value, the Company deemed as probable as of the grant date the achievement of the commercial objectives and the financial objectives (consisting of meeting the profitability targets announced by the Company in December 2020 for FY 2023 (non-GAAP net income margin and EBITDA margin)), which commercial and financial objectives comprise 20% and 40%, respectively, of the total target value of the 2021 PRSUs. As of December 31, 2021, achievement of the financial objectives was no longer determined to be probable. Assuming on the date of grant that the highest level of performance would be achieved, the fair value of the 2021 PRSUs as calculated in accordance with ASC 718 was $5,169,491, $638,941, $1,103,621, $871,281 and $667,980 for Messrs. Pops and Brown, Dr. Hopkinson and Messrs. Jackson and Gaffin, respectively.

Included in the stock awards granted to the named executive officers in 2020 are the 2020 PRSUs, which, in order to vest, require achievement of certain commercial and pipeline performance conditions over a three-year performance period and are subject to a relative TSR modifier at the end of the performance period. For additional detail regarding the 2020 PRSUs, see the section entitled “Long-Term Equity Incentives” beginning on page 91 of our 2021 Proxy Statement. The grant date fair value of these performance-vesting restricted stock unit awards was determined in accordance with ASC 718 based upon the then-probable outcome of the performance conditions underlying such awards and, because of the market condition component of the awards, was computed using a Monte Carlo simulation. Assuming on the date of grant that the highest level of performance would be achieved, the fair value of the 2020 PRSUs as calculated in accordance with ASC 718 was $9,568,973, $1,075,173, $1,774,032 and $1,236,445 for Messrs. Pops and Frates, Dr. Hopkinson and Mr. Gaffin, respectively.

(3)

The amounts in column (f) reflect the aggregate grant date fair value of option awards granted during 2021, 2020 and 2019, as indicated, computed in accordance with ASC 718. The assumptions used in the calculation of the fair value of option awards granted by us during these periods are included in footnote 2 “Summary of Significant Accounting Policies” to our consolidated financial statements for the year ended December 31, 2021 included in 2021 Annual Report under the heading “Share-Based Compensation”. For additional details regarding the equity granted to our named executive officers in 2021, see the discussion in the section entitled “Long-Term Incentive Compensation – Annual Equity Grant beginning on page 29 of this Amendment. Included in the option awards granted to Mr. Pops during 2019 are (i) 382,200 time- and performance-vesting stock options that, in order to vest, require a greater than 50% increase in the Company’s share price from their grant date value for 30 consecutive trading days and, once that performance condition is met, remain subject to time-based vesting in equal annual installments over four years commencing on the first anniversary of the grant date, which had a grant date fair value computed using a Monte Carlo simulation model in accordance with ASC 718 of $6,414,272 and (ii) 121,000 time-vesting stock options that vest in equal annual installments over four years commencing on the first anniversary of the grant date, which had a grant date fair value computed using a Black-Scholes model in accordance with ASC 718 of $1,970,403.

(4)

The amounts in column (g) reflect the performance cash awards paid to our named executive officers for services performed during 2021, 2020 and 2019, as indicated, pursuant to the Alkermes plc Affiliated Company 2021 Reporting Officer Performance Pay Plan (the “2021 Performance Pay Plan”), Alkermes plc Affiliated Company 2020 Reporting Officer Performance Pay Plan and the Alkermes plc Affiliated Company Fiscal Year 2019 Reporting Officer Performance Pay Plan, respectively. The performance cash award amounts paid to our named executive officers for services in 2021 as compared to their target performance cash awards for 2021 reflect 105% of target for Mr. Pops, 110% of target for Dr. Hopkinson and 115% of target for Messrs. Brown, Gaffin and Jackson. Mr. Frates terminated his employment with the Company in January 2021 and was therefore not eligible to receive a performance cash award for 2020 or 2021.

(5)

The amounts in column (i) reflect the Company’s match on contributions made by the named executive officers to our 401(k) Plan. Column (i) for Mr. Frates also includes $192,009 for unused vacation time which was paid to Mr. Frates in 2021.

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2021 Grants of Plan-Based Awards Table

The following table presents information on all grants of plan-based awards made in 2021 to our named executive officers. Mr. Frates terminated his employment with the Company in January 2021 and, accordingly, no target was established for him under the 2021 Performance Pay Plan and he was not granted any equity awards in 2021:

 

 

 

 

Estimated Future Payouts Under

Non-Equity Incentive Plan Awards

 

 

Estimated Future Payouts Under

Equity Incentive Plan Awards

 

 

All Other Stock Awards: Number of Shares

 

 

All Other Option Awards: Number of Securities Underlying

 

 

Exercise or Base Price of Option

 

 

Grant Date Fair Value of Stock and Option

 

Name

 

Grant

Date

 

Threshold

($)

 

 

Target

($)

 

 

Maximum

($)

 

 

Threshold

(#)

 

 

Target

(#)

 

 

Maximum

(#)

 

 

or Units

(#)

 

 

Options

(#)

 

 

Awards

($/Sh)

 

 

Awards

($)

 

(a)

 

(b)

 

(c)

 

 

(d)(1)

 

 

(e)(1)

 

 

(f)

 

 

(g)(2)

 

 

(h)(2)

 

 

(i)(3)

 

 

(j)(4)

 

 

(k)

 

 

(l)(5)

 

Richard F. Pops

 

2/22/2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

342,187

 

 

 

19.73

 

 

 

3,463,250

 

 

 

2/22/2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

225,545

 

 

 

422,897

 

 

 

 

 

 

 

 

 

 

 

 

3,101,695

 

 

 

N/A

 

 

 

 

 

1,105,923

 

 

 

2,211,846

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Iain M. Brown

 

2/22/2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,877

 

 

 

 

 

 

 

 

 

550,013

 

 

 

2/22/2021