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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

☐

Preliminary Proxy Statement

☐

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒

Definitive Proxy Statement

☐

Definitive Additional Materials

☐

Soliciting Material under §240.14a-12

IDERA PHARMACEUTICALS, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

☒

No fee required.

☐

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1)

Title of each class of securities to which transaction applies:

(2)

Aggregate number of securities to which transaction applies:

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

(4)

Proposed maximum aggregate value of transaction:

(5)

Total fee paid:

☐

Fee paid previously with preliminary materials.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

(1)

Amount Previously Paid:

(2)

Form, Schedule or Registration Statement No.:

(3)

Filing Party:

(4)

Date Filed:

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IDERA PHARMACEUTICALS, INC.
505 Eagleview Blvd., Suite 212
Exton, PA 19341

NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS
Tuesday, June 8, 2021

	Date and Time:			Tuesday, June 8, 2021 at 9:00 a.m., Eastern Time
	Format:			Due to the public health impact of the coronavirus (COVID-19) pandemic and related government actions, and to support the health and well-being of our employees, stockholders, and community, Idera Pharmaceuticals, Inc.’s (“Idera,” “our,” “we,” “us,” or the “Company”) 2021 annual meeting of stockholders will be held via teleconference only. You will be able to participate in the 2021 annual meeting by using the below conference call phone number and conference ID number. You will also be able to vote during the 2021 annual meeting by dialing a separate phone number (the “Voting Call Line”) that will be announced during the 2021 annual meeting. Stockholders who wish to vote via the Voting Call Line will need to provide their legal proxy number to the operator, who will then record such stockholder’s vote. You will not be able to attend the 2021 annual meeting in person.
	Conference Call Access:			US/CANADA Participant Toll-Free Dial-In Number: (844) 882-7837 US/CANADA Participant International Dial-In Number: (574) 990-9824 Conference ID: 1120087
	Items of Business:			• Elect two Class II directors to our board of directors for terms to expire at the 2024 annual meeting of stockholders;
				• Approve, by non-binding vote, the compensation of the Company’s named executive officers for 2020;
				• Ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021; and
				• Transact any other business as may properly come before the 2021 annual meeting or any postponement or adjournment of the 2021 annual meeting.
				The board of directors has no knowledge of any other business to be transacted at the 2021 annual meeting.
	Record Date:			You may vote on the matters to be presented at the 2021 annual meeting if you were a stockholder of record as of the close of business on April 12, 2021.
	Proxy Voting			It is important that your shares be represented and voted at the 2021 annual meeting. Whether or not you plan to participate in the 2021 annual meeting, we urge you to vote as promptly as possible by telephone or Internet or by signing, dating, and returning a printed proxy card or voting instruction form, as applicable. If you participate in the 2021 annual meeting, you may vote your shares during the 2021 annual meeting via the Voting Call Line even if you previously voted by proxy and may revoke your proxy at any time before its exercise at the 2021 annual meeting. Please vote as soon as possible to ensure that your shares will be represented and counted at the 2021 annual meeting.

By order of the board of directors,
/s/ Bryant D. Lim

Bryant D. Lim
Senior Vice President, General Counsel
and Corporate Secretary
Exton, Pennsylvania
April 28, 2021

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2021
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 8, 2021

Idera’s Proxy Statement for the 2021 Annual Meeting of Stockholders and Annual Report to Stockholders for the fiscal year ended December 31, 2020 are available at:
https://ir.iderapharma.com/shareholder-services/annual-meeting

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	Page
PROXY STATEMENT		1
INFORMATION ABOUT THE 2021 ANNUAL MEETING		1
When are this proxy statement and the accompanying materials scheduled to be sent to stockholders?		1
Why did I receive a Notice of Internet Availability instead of a full set of proxy materials?		1
Who may vote?		2
How do I vote my shares if I am a stockholder of record?		2
How do I vote my shares if I hold them in “street name?		2
How may I change or revoke my vote?		3
What constitutes a quorum?		3
What vote is required to approve each matter and how will votes be counted?		3
How does the board of directors recommend that I vote?		4
Will any other business be conducted at the 2021 annual meeting of stockholders?		4
Who is making and paying for the solicitation of proxies and how is it made?		4
How and when may I submit a proposal for the 2022 annual meeting of stockholders?		4
Are annual meeting materials householded?		5
PROPOSAL ONE ELECTION OF DIRECTORS		6
General Information		6
Information about our Directors		6
DIRECTOR COMPENSATION		10
CORPORATE GOVERNANCE INFORMATION		12
Board of Directors		12
Board Leadership Structure		12
Board of Directors’ Role in Risk Oversight		12
Board Committees		13
Director Independence		14
Director Nomination Process		15
Stockholder Nominees		15
Communicating with our Board of Directors		16
Code of Business Conduct and Ethics		16
Hedging Policy		16
EXECUTIVE OFFICERS		17
Information about our Executive Officers		17
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		19
EXECUTIVE COMPENSATION		21
Compensation Discussion and Analysis		21
Severance and Change in Control Benefits and Agreements with NEOs		32
Indemnification Agreements		35
Formal Clawback Policy		35
Compensation Committee Report		36
Summary Compensation Table		37

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	Page
Grants of Plan-Based Awards		38
Outstanding Equity Awards at Fiscal Year-End		39
Potential Payments Upon Termination or Change in Control		42
Termination of Employment Not In Connection With or Following a Change in Control		42
Termination of Employment In Connection With or Following a Change in Control		43
CEO Pay Ratio		45
Compensation Risk Management		45
PROPOSAL TWO APPROVAL, BY NON-BINDING VOTE, OF THE NAMED EXECUTIVE OFFICER 2020 COMPENSATION		46
PROPOSAL THREE RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		47
ACCOUNTING MATTERS		48
Report of the Audit Committee		48
Independent Registered Public Accounting Firm Fees		48
Pre-Approval Policies and Procedures		49
TRANSACTIONS WITH RELATED PERSONS		50
Policies and Procedures for Related Person Transactions		50
DELINQUENT SECTION 16(A) REPORTS		51

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IDERA PHARMACEUTICALS, INC.

505 Eagleview Blvd., Suite 212
Exton, PA 19341

PROXY STATEMENT
FOR THE 2021 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 8, 2021
AT 9:00 A.M. EASTERN TIME

Idera Pharmaceuticals, Inc., a Delaware corporation, which is referred to as “we,” “us,” the “Company,” or “Idera” in this proxy statement, has made these proxy materials available to you on the Internet, or upon your request, has delivered a printed or email copy of the proxy materials to you, because our board of directors (our “board” or the “board”) is soliciting your proxy to vote at our 2021 annual meeting of stockholders, or the 2021 annual meeting. The 2021 annual meeting will be held on Tuesday, June 8, 2021, at 9:00 a.m., Eastern Time, via teleconference or at such other time and place to which the meeting may be adjourned, continued, or postponed. If the 2021 annual meeting is adjourned for any reason, then proxies submitted may be used at any adjournment of the 2021 annual meeting.

In response to the COVID-19 pandemic, the 2021 annual meeting will be held completely by remote communication. There will be no physical meeting location and the meeting will only be conducted via teleconference. Accordingly, you will not be able to attend the 2021 annual meeting in person. To participate in the meeting, please use the following conference call phone and conference ID numbers:

	US/CANADA Participant Toll-Free Dial-In Number:			(844) 882-7837
	US/CANADA Participant International Dial-In Number:			(574) 990-9824
	Conference ID:			1120087

Stockholders who wish to vote during the 2021 annual meeting will be able to do so by dialing the separate phone number (the “Voting Call Line”) that will be announced during the 2021 annual meeting. To vote via the Voting Call Line, a stockholder must provide his or her legal proxy number to the operator, who will then record such stockholder’s vote.

INFORMATION ABOUT THE 2021 ANNUAL MEETING

When are this proxy statement and the accompanying materials scheduled to be sent to stockholders?

We have elected to provide access to our proxy materials for the 2021 annual meeting to our stockholders via the Internet. Accordingly, on or about April 29, 2021, we will begin mailing a Notice of Internet Availability of Proxy Materials, or Notice of Internet Availability, and all other proxy materials, including the Notice of 2021 Annual Meeting of Stockholders, this proxy statement, and accompanying proxy card. For shares held in street name (held for your account by a broker or other nominee), a voting instruction form and the Annual Report on Form 10-K for the fiscal year ended December 31, 2020, or 2020 Annual Report, will be made available to stockholders on the Internet on the same date.

Why did I receive a Notice of Internet Availability instead of a full set of proxy materials?

Pursuant to rules adopted by the U.S. Securities and Exchange Commission, or SEC, we are providing access to our proxy materials over the Internet rather than printing and mailing the proxy materials. We believe electronic delivery will expedite the receipt of materials and will help lower our costs and reduce the environmental impact of our 2021 annual meeting materials. Therefore, a Notice of Internet Availability will be mailed to holders of record and beneficial owners of our common stock starting on or around April 29, 2021. The Notice of Internet Availability will provide instructions as to how stockholders may access and review the proxy materials, including the Notice of Annual Meeting, proxy statement, proxy card, and 2020 Annual Report, on the website referred to in the Notice of Internet Availability or, alternatively, how to request that a copy of the proxy materials, including a proxy card, be sent to them by mail. The Notice of Internet Availability also will provide voting instructions. In addition, stockholders of record may request to receive the proxy materials in printed form by mail or electronically by e-mail on an ongoing basis for future

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stockholder meetings. Please note that while our proxy materials are available at the website referenced in the Notice of Internet Availability, and our Notice of Annual Meeting, proxy statement, and 2020 Annual Report are available on our website, no other information contained on either website is incorporated by reference in, or considered to be a part of, this document.

Who may vote?

Holders of record of our common stock as of the close of business on April 12, 2021, the record date for the 2021 annual meeting, are entitled to vote on each matter properly brought before the 2021 annual meeting. Holders of our common stock will be entitled to one vote for each share of common stock held as of the record date. As of the close of business on April 12, 2021, the record date for the 2021 annual meeting, we had 50,033,297 shares of common stock outstanding.

How do I vote my shares if I am a stockholder of record?

If you are a stockholder of record (meaning that you hold shares in your name in the records of our transfer agent, Computershare Trust Company, N.A., and that your shares are not held in “street name” by a bank or brokerage firm), you may vote your shares in any one of the following ways:

•

By internet. To vote over the internet through services provided by Computershare Trust Company, N.A., please go to the following website: http://www.investorvote.com/IDRA and follow the instructions at that site for submitting your proxy. If you vote over the internet, you do not need to complete and mail your proxy card.

•

By telephone. To vote by telephone through services provided by Computershare Trust Company, N.A., call 1-800-652-VOTE (8683), and follow the instructions provided on the proxy card that accompanies this proxy statement. If you vote by telephone, you do not need to complete and mail your proxy card.

•

By mail. If you requested printed proxy materials, you need to complete, date and sign the proxy card that accompanies this proxy statement and promptly mail it in the enclosed postage-prepaid envelope. You do not need to put a stamp on the enclosed envelope if you mail it from within the United States. If you are mailed or otherwise receive or obtain a proxy card, and you choose to vote by telephone or by Internet, you do not have to return your proxy card.

•

During the 2021 Annual Meeting. If you participate in the 2021 annual meeting, you may vote via the Voting Call Line during the 2021 annual meeting. The phone number for the Voting Call Line will be announced during the 2021 annual meeting. A stockholder who wishes to vote via the Voting Call Line will be required to provide his or her legal proxy number to the operator, who will then record such stockholder’s vote.

Your proxy will only be valid if you complete and return the proxy card, vote by telephone, or vote over the internet during or before the 2021 annual meeting. The persons named in the proxy card will vote the shares you own in accordance with your instructions on your proxy card, in your vote by telephone, or in your vote over the internet. If you return the proxy card, vote by telephone, or vote over the internet, but do not give any instructions on a particular matter described in this proxy statement, the persons named in the proxy card will vote the shares you own in accordance with the recommendations of our board of directors.

How do I vote my shares if I hold them in “street name”?

If the shares you own are held in “street name” by a bank or brokerage firm, your bank or brokerage firm, as the record holder of your shares, is required to vote your shares according to your instructions. In order to vote your shares, you will need to follow the directions that your bank or brokerage firm provides to you. Many banks and brokerage firms solicit voting instructions over the internet or by telephone. Even if your shares are held in street name, you are welcome to participate in the 2021 annual meeting. If your shares are held in street name, you may not vote your shares during the 2021 annual meeting unless you obtain a “legal proxy,” executed in your favor, from the holder of record (i.e., your bank or brokerage firm). If you hold your shares in street name and wish to vote via the Voting Call Line during the 2021 annual meeting, please contact your bank or brokerage firm before the 2021 annual meeting to obtain the necessary proxy

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from the holder of record. You must then submit the legal proxy to the Company by 5:00 p.m., Eastern Time, on June 7, 2021. Legal proxies may be submitted: by mail to Corporate Secretary, Idera Pharmaceuticals, Inc., 505 Eagleview Boulevard, Suite 212, Exton, Pennsylvania 19341; or by e-mail to legal@iderapharma.com.

If the beneficial owner does not provide voting instructions, banks and brokerage firms cannot vote the shares with respect to “non-routine” matters, but can vote the shares with respect to “routine” matters. “Broker non-votes” occur when a beneficial owner of shares held in street name fails to provide instructions to the bank or brokerage firm holding the shares as to how to vote on matters deemed “non-routine.” We believe Proposal Three (the ratification of the selection of our independent registered public accounting firm) is a “routine” matter and, as a result, we do not expect there to be any broker non-votes. Proposal One (the election of directors) and Proposal Two (the approval of, by non-binding vote, the compensation of the Company’s named executive officers for 2020) are “non-routine” matters, and banks and brokerage firms cannot vote your shares on such proposals if you have not given voting instructions.

As long as one of the matters is deemed to be a “routine” matter, proxies reflecting broker non-votes (if any) will be counted towards the quorum requirement.

How may I change or revoke my vote?

If you are a stockholder of record, even if you complete and return a proxy card or vote by telephone or over the internet, you may change or revoke your vote at any time before your proxy is exercised by taking one of the following actions:

•

send written notice to our Secretary, Bryant Lim, at our address above, stating that you wish to revoke your vote;

•

deliver to us another signed proxy card with a later date or vote by telephone or over the internet at a later date; or

•

participate in the 2021 annual meeting and vote via the Voting Call Line during the 2021 annual meeting.

If you own shares in street name, your bank or brokerage firm should provide you with instructions for changing or revoking your vote.

What constitutes a quorum?

In order for business to be conducted at the 2021 annual meeting, a quorum must be present. A quorum consists of the holders of a majority of the shares of our common stock issued, outstanding and entitled to vote at the 2021 annual meeting.

Shares of common stock present by conference call participation or represented by proxy (including broker non-votes and shares that are abstained or withheld or with respect to which no voting instructions are provided for one or more of the matters to be voted upon) will be counted for the purpose of determining whether a quorum exists.

If a quorum is not present, the 2021 annual meeting will be adjourned until a quorum is obtained.

What vote is required to approve each matter and how will votes be counted?

The table below sets forth the vote required for each matter being submitted to our stockholders at the 2021 annual meeting to be approved and the effect that abstentions, withheld votes, and broker non-votes:

Proposal	Affirmative Vote Required	Abstentions/ Withholds	Broker Non-Votes
Election of Directors (Proposal One)	Plurality of votes cast by holders of common stock entitled to vote	No effect(1)	No effect
Advisory Vote on Named Executive Officer 2020 Compensation (Proposal Two)	Majority of common stock present or represented and voting on the matter	No effect	No effect
Ratification of Selection of Ernst & Young LLP (Proposal Three)	Majority of common stock present or represented and voting on the matter	No effect	N/A

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(1)

You may vote FOR all of the director nominees, WITHHOLD your vote from all of the director nominees or WITHHOLD your vote from any of the director nominees.

Each share of common stock will be counted as one vote.

How does the board of directors recommend that I vote?

Our board of directors recommends that you vote as follows:

•

FOR each of the Class II director nominees (Proposal One); and

•

FOR Proposal Two and Proposal Three.

Under the Securities Exchange Act of 1934, as amended, or the Exchange Act, and related SEC regulations, the vote on executive compensation, as described in greater detail in Proposal Two, set forth elsewhere in this proxy statement, is an advisory vote, meaning it is non-binding. The vote on the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm, as described in greater detail in Proposal Three, is also an advisory vote. Our board will carefully consider the outcome of each of these votes.

Will any other business be conducted at the 2021 annual meeting of stockholders?

Our board of directors does not know of any other business to be conducted or matters to be voted upon at the 2021 annual meeting. If any other matter properly comes before the 2021 annual meeting, the persons named in the proxy card that accompanies this proxy statement will exercise their judgment in deciding how to vote or otherwise act with respect to that matter at the 2021 annual meeting.

Who is making and paying for the solicitation of proxies and how is it made?

We are making the solicitation and will bear the costs of soliciting proxies. In addition to solicitations by mail, our directors, officers, and employees, without additional remuneration, may solicit proxies by telephone, facsimile, email, personal interviews, and other means. We may engage a proxy solicitor to distribute our proxy materials and solicit proxies, and if we were to do so would pay a fee for such services and reimburse the solicitor for reasonable disbursements. We have requested that brokerage houses, custodians, nominees, and fiduciaries forward copies of the proxy materials to the persons for whom they hold shares and request instructions for voting the proxies. We will reimburse the brokerage houses and other persons for their reasonable out-of-pocket expenses in connection with this distribution.

How and when may I submit a proposal for the 2022 annual meeting of stockholders?

If you are interested in submitting a proposal for inclusion in the proxy statement and proxy card for our 2022 annual meeting of stockholders, or the 2022 annual meeting, you need to follow the procedures outlined in Rule 14a-8 of the Exchange Act. We must receive your proposal intended for inclusion in the proxy statement at our principal executive offices, 505 Eagleview Blvd., Suite 212, Exton, Pennsylvania 19341, Attention: Secretary, no later than December 30, 2021. SEC rules set standards for the types of stockholder proposals and the information that must be provided by the stockholder making the request.

If you wish to present a proposal at the 2022 annual meeting, but do not wish to have the proposal considered for inclusion in the proxy statement and proxy card or have not complied with the requirements for inclusion of such proposal in our proxy statement under SEC rules, you must also give written notice to us at the address noted above. Our bylaws specify the information that must be included in any such notice, including a brief description of the business to be brought before the annual meeting, the name of the stockholder proposing such business, and stock ownership information for such stockholder. In accordance with our bylaws, we must receive this notice (or the stockholder director nomination, see “Stockholder Nominees”) at least 60 days, but not more than 90 days, prior to the date of the 2022 annual meeting and the notice must include specified information regarding the proposal and the stockholder making the proposal.

Notwithstanding the foregoing, if we provide less than 70 days’ notice or prior public disclosure of the date of the annual meeting to the stockholders, notice by the stockholders must be received by our Secretary

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no later than the close of business on the tenth day following the date on which the notice of the annual meeting was mailed or such public disclosure was made, whichever occurs first. If a stockholder who wished to present a proposal fails to notify us by this date, the proxies that management solicits for that meeting will have discretionary authority to vote on the stockholder’s proposal if it is otherwise properly brought before that meeting. If a stockholder makes timely notification, the proxies may still exercise discretionary authority to vote on stockholder proposals under circumstances consistent with the SEC’s rules.

Are annual meeting materials householded?

Some banks and brokerage firms may be participating in the practice of “householding” proxy statements and annual reports. This means that the banks and brokerage firms send only one copy of this proxy statement and the accompanying 2020 Annual Report to multiple stockholders in the same household. Upon request, we will promptly deliver separate copies of this proxy statement and our annual report to stockholders. To make such a request, please call Investor Relations at (877) 888-6550, write to Investor Relations, 505 Eagleview Blvd., Suite 212, Exton, Pennsylvania 19341 or email Investor Relations at ir@iderapharma.com. To receive separate copies of our annual report to stockholders and proxy statement in the future, or to receive only one copy for the household, please contact us or your bank or brokerage firm.

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PROPOSAL ONE

ELECTION OF DIRECTORS

General Information

Our board of directors is divided into three classes and currently consists of three Class I directors: Vincent J. Milano, Cristina Csimma, PharmD, MHP, and Michael R. Dougherty; two Class II directors: James A. Geraghty and Maxine Gowen, Ph.D.; and two Class III directors: Mark Goldberg, M.D. and Carol A. Schafer. Each member of a class is elected for a three-year term, with the terms staggered so that approximately one-third of our directors stand for election at each annual meeting of stockholders. The Class I, Class II, and Class III directors were elected to serve until the annual meeting of stockholders to be held in 2023, 2021 and 2022, respectively, and until their respective successors are elected and qualified.

Our board of directors, on the recommendation of the members of our nominating and corporate governance committee, has nominated Mr. Geraghty and Dr. Gowen for election as Class II directors at the 2021 annual meeting. At the 2021 annual meeting, stockholders will be asked to consider the election of Mr. Geraghty and Dr. Gowen.

The persons named in the enclosed proxy card will vote to elect Mr. Geraghty and Dr. Gowen to our board of directors unless you indicate that you withhold authority to vote for the election of one or all nominees. You may not vote for more than two directors. Each Class II director will be elected to hold office until our 2024 annual meeting of stockholders and until his or her successor is elected and qualified or until his or her earlier resignation, death, or removal. Each of the nominees is presently a director and each has indicated a willingness to serve as a director, if elected. If a nominee becomes unable or unwilling to serve, however, the persons acting under the proxy may vote for substitute nominees selected by the board of directors.

Information about our Directors

Set forth below is information about each member of our board of directors, including (a) the year in which each director first became a director, (b) their age as of the 2021 annual meeting, (c) their positions and offices with our Company (if any), (d) their principal occupations and business experience during at least the past five years, and (e) the names of other public companies for which they currently serve, or have served within the past five years, as a director. We have also included information about each director’s specific experience, qualifications, attributes, or skills that led our board of directors to conclude that such individual should serve as one of our directors. We also believe that all of our directors have a reputation for integrity, honesty, and adherence to high ethical standards. They each have demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to our Company and our board of directors.

Regrettably, in November 2020, one of our directors, Howard Pien, passed away. Mr. Pien had served on the Board since 2018. His insights and contributions to the Board and the Company will be greatly missed.

Recommendation of the Board of Directors

Our board of directors unanimously recommends that the stockholders vote FOR the election of
Mr. Geraghty and Dr. Gowen as Class II directors.

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Class I Directors—Terms to Expire in 2023

Cristina Csimma, PharmD, MHP
Director since 2019

Dr. Csimma, age 62, currently serves as a board director, the chair of the nominating and corporate governance committee, and a member of the compensation committee and the audit committee of Seneca Biopharma, Inc. (Nasdaq: SNCA; formerly Neuralstem, Inc.), having been elected to its board of directors in September 2017. She also serves as the chair of the board of directors of Caraway Therapeutics since April of 2019 (executive chair in 2019) and as the chair of the board of directors of Forendo Pharma, since May 2020. Dr. Csimma also serves on advisory boards, including the Muscular Dystrophy Association Venture Philanthropy Scientific Advisory Committee since 2006; the Harvard and Brigham and Women’s Hospital MRCT Center External Advisory Board since 2015; the TREAT-NMD Advisory Committee for Therapeutics (TACT) since 2009; and the Executive Oversight Board to the National Institutes of Health (NIH) NeuroNext Network since 2013. Dr. Csimma previously served as a director on the boards of Juniper Pharma (from 2010 until its acquisition by Catalent in 2018), Vtesse Pharma (from 2014 until its acquisition by Sucampo in 2017), was the executive chair and a senior advisor of Exonics Therapeutics (from 2016 to 2017), and was President, founding CEO, and board director of Cydan Inc. from 2012 to 2014. She also served on the board of directors of T1D Exchange (non-profit-Type 1 Diabetes) from 2018 to 2020 and the NIH Blueprint Neurotherapeutics Network External Oversight Committee from 2014 to 2018, was Vice President of Drug Development at Virdante Pharmaceuticals Inc. from 2009 to 2011, Principal at Clarus Ventures LLC (now Blackstone Life Science), and held roles of increasing responsibility in Clinical Development and Translational Research at Wyeth (now Pfizer), Genetics Institute, and Dana Farber Cancer Institute. Dr. Csimma holds both a Doctor of Pharmacy and a Bachelor of Science in Pharmacy from the Massachusetts College of Pharmacy and Allied Health Sciences, as well as a Master of Health Professions from Northeastern University. We believe that Dr. Csimma’s qualifications to sit on our board of directors include her significant public company management and board experience and knowledge of our industry.

Michael R. Dougherty
Director since 2019

Mr. Dougherty, age 63, currently serves as chair of our board of directors. Mr. Doughery was executive chairman of Celator Pharmaceuticals, Inc. (“Celator”) from August 2015 until July 2016; he also served as a director of Celator from July 2013 to July 2016. Mr. Dougherty previously served in a variety of senior positions in the biopharmaceutical industry, including as chief executive officer at Kalidex Pharmaceuticals, Inc.; president and chief executive officer at Adolor Corporation; president and chief operating officer at Genomics Collaborative, Inc.; president and chief executive officer at Genaera Corporation; and chief financial officer at Centocor, Inc. Mr. Dougherty currently serves on the board of directors of Trevena, Inc. (Nasdaq: TRVN) and Marinus Pharmaceuticals, Inc. (Nasdaq: MRNS), and previously served as a member of the board of directors of Foundation Medicine, Inc., Aviragen Therapeutics, Inc., Cempra, Inc., and ViroPharma Incorporated. Mr. Dougherty received a B.S. in Accounting from Villanova University. We believe that Mr. Dougherty’s qualifications to sit on our board of directors include his significant public company management and board experience and knowledge of our industry.

Vincent J. Milano
Director since 2014

Vincent Milano, age 57, has been our President and Chief Executive Officer, and a member of our board of directors, since December 2014. Prior to joining us, Mr. Milano served as chairman, president, and chief executive officer of ViroPharma Inc., a pharmaceutical company that was acquired by Shire Plc in January 2014, from March 2008 to January 2014, as its vice president, chief financial officer, and chief operating officer from January 2006 to March 2008, and as its vice president, chief financial officer, and treasurer from April 1996 to December 2005. Mr. Milano also served on the board of directors of ViroPharma from March 2008 to January 2014. Prior to joining ViroPharma, Mr. Milano served in increasingly senior roles, most recently senior manager, at KPMG LLP, an independent registered public accounting firm, from July 1985 to March 1996. Mr. Milano currently serves on the board of directors of

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Aclaris Therapeutics, Inc. (Nasdaq: ACRS), a publicly traded company, and privately held VenatoRx Pharmaceuticals, Inc. Mr. Milano previously served as a director of Spark Therapeutics, Inc. and Vanda Pharmaceuticals Inc. from 2014 to 2019 and 2010 to 2019, respectively. Mr. Milano holds a Bachelor of Science degree in Accounting from Rider College. We believe Mr. Milano’s qualifications to sit on our board of directors include his knowledge of our Company as our President and Chief Executive Officer, knowledge of our industry, including over 20 years of experience serving in a variety of roles of increasing responsibility in the finance department, corporate administration, and operations of a multinational biopharmaceutical company, and understanding of pharmaceutical research and development, sales and marketing, strategy, and operations in both the United States and overseas. He also has corporate governance experience through service on other public company boards.

Class II Directors—Terms to Expire in 2021

James A. Geraghty
Director since 2013

Mr. Geraghty, age 66, has served on our board of directors since July 2013 and served as chair of our board of directors from that time until April 2021. Mr. Geraghty is an industry leader with over 35 years of strategic and leadership experience, including more than 25 years as a senior member of executive teams at biotechnology companies developing and commercializing innovative therapies. From May 2013 to October 2016, Mr. Geraghty was an Entrepreneur in Residence at Third Rock Ventures, a leading biotech venture fund. From April 2011 to December 2012, he served as a Senior Vice President of Sanofi, a global healthcare company. Prior to that, he served in various senior management roles at Genzyme Corporation, a biotechnology company, from 1992 to April 2011, including as Senior Vice President, International Development and President of Genzyme Europe. Mr. Geraghty currently serves as chairman of the board of Orchard Therapeutics PLC (Nasdaq: ORTX) and Pieris Pharmaceuticals, Inc. (Nasdaq: PIRS) and as a member of the board of Voyager Therapeutics (Nasdaq: VYGR) and Fulcrum Therapeutics (Nasdaq: FULC), each a publicly traded company. He also previously served as a director of bluebird bio, Inc. and GTC Biotherapeutics, Inc. We believe that Mr. Geraghty’s qualifications to sit on our board of directors include his public company board and management experience and his broad and deep knowledge of our industry.

Maxine Gowen, Ph.D.
Director since 2016

Dr. Gowen, age 62, has served as the chief executive officer and a board director of TamuroBio Inc., a privately held drug development company, since August 2019. She was the founding President and CEO of Trevena, Inc. (Nasdaq: TRVN), a publicly traded biopharmaceutical company, from November 2007 until her retirement in October 2018, and remains a member of its board of directors. Prior to joining Trevena, Dr. Gowen was Senior Vice President for the Center of Excellence for External Drug Discovery at GlaxoSmithKline plc, or GSK, where she held a variety of leadership positions during her tenure of 15 years. Before GSK, Dr. Gowen was Senior Lecturer and Head, Bone Cell Biology Group, Department of Bone and Joint Medicine, of the University of Bath, U.K. Dr. Gowen has served as a director of Akebia Therapeutics, Inc. (Nasdaq: AKBA) since July 2014, Aclaris Therapeutics, Inc. (Nasdaq: ACRS) since July 2019, and Passage Bio, Inc. (Nasdaq: PASG ) since February 2021, each a publicly traded company, as well as Panorama Therapeutics, a privately-held biotechnology company. She also serves on the board of the state biotechnology industry association, Life Sciences PA and previously held a board seat in the national biotechnology industry association, BIO, from 2008 to 2018. From 2008 until 2012, Dr. Gowen served as a director of Human Genome Sciences, Inc., a publicly traded company. She received her Ph.D. from the University of Sheffield, U.K., an M.B.A. with academic honors from The Wharton School of the University of Pennsylvania, and a B.Sc. with Honors in Biochemistry from the University of Bristol, U.K. We believe that Dr. Gowen’s qualifications to sit on our board of directors include her significant public company management and board experience and knowledge of our industry.

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Class III Directors—Terms to Expire in 2022

Mark Goldberg, M.D.
Director since 2014

Dr. Goldberg, age 66, has served as a member of the board of directors of ImmunoGen, Inc. (Nasdaq: IMGN) since November 2011, a member of the board of directors of GlycoMimetics, Inc. (Nasdaq: GLYC) since July 2014, a member of the board of directors of Blueprint Medicines (Nasdaq: BPMC ) since June 2015, and a member of the board of directors of Walden Biosciences since March 2020. In addition, he is a member of the board of directors of the American Cancer Society, a non-profit organization. Dr. Goldberg previously served on the board of directors of Audentes Therapeutics, Inc. from December 2017 until January 2020 and aTyr Pharma from April 2015 until December 2017. Dr. Goldberg served as advisor and medical and regulatory strategist for Synageva BioPharma Corp., a biopharmaceutical company, from October 2014 until June 2015. Prior to that, he served as the Executive Vice President for Medical and Regulatory Strategy of Synageva from January 2014 to October 2014 and as the Senior Vice President of Medical and Regulatory Affairs of Synageva from September 2011 to January 2014. Dr. Goldberg served in a variety of senior management positions at Genzyme Corporation from 1996 to July 2011, including most recently as Senior Vice President for Clinical Development and Therapeutic Group Head for Oncology and Personalized Genetic Health from 2009 to July 2011. Prior to working at Genzyme Corporation, he was a full-time staff physician at Brigham and Women’s Hospital (where he still holds an appointment) and Dana Farber Cancer Institute. He has also been an Associate Professor of Medicine at Harvard Medical School since 1996. Dr. Goldberg is a board-certified medical oncologist and hematologist and has more than 50 published papers. Dr. Goldberg holds an A.B. from Harvard College and an M.D. from Harvard Medical School. We believe that Dr. Goldberg’s qualifications to sit on our board of directors include his extensive scientific and medical background, public company board experience, and extensive experience in the management and operations of pharmaceutical companies.

Carol A. Schafer
Director since December 2018

Ms. Schafer, age 56, has served on the board of directors of Repare Therapeutics, Inc. (Nasdaq: RPTX) since March 2019, Five Prime Therapeutics, Inc. (Nasdaq: FPRX ) since May 2019, and Insmed Incorporated (Nasdaq: INSM) since April 2020, each a publicly traded company. Ms. Schafer serves on the audit committee and nominating and corporate governance committee at Repare and Insmed, and on the compensation committee and nominating and corporate governance committee at Five Prime. Additionally, Ms. Schafer has served as a non-fiduciary board member of OneGoal NY, a non-profit entity, since March 2019. She also currently serves as managing partner at Hyphen Advisors, LLC, a firm that provides advisory, consulting, and board services to public and private companies and boards of directors on topics such as financing strategy and execution, financial planning and analysis, investor access and messaging, and strategic initiatives. Ms. Schafer has more than 25 years of experience in investment banking and equity capital markets, as well as in corporate finance and business development in the biopharmaceutical sector, with substantial experience financing and facilitating investor access for public and private healthcare companies. Ms. Schafer most recently served as Vice Chair, Equity Capital Markets at Wells Fargo Securities. Prior to Wells Fargo, Ms. Schafer served as Vice President of Finance and Business Development at Lexicon Pharmaceuticals. Earlier in her career, Ms. Schafer served as an Equity Capital Markets Sector Head in her role as Managing Director at J.P. Morgan. Ms. Schafer received a B.A. from Boston College and an M.B.A from New York University. We believe that Ms. Schafer’s qualifications to sit on our board of directors include her extensive financial background and her many years of experience providing investment banking, equity capital markets, and strategic support to companies within the healthcare sector.

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DIRECTOR COMPENSATION

We use a combination of cash and equity-based compensation to attract and retain candidates to serve on our board of directors. We do not compensate directors who are also our employees for their service on our board of directors. As a result, Mr. Milano does not receive any compensation for his service on our board of directors.

We generally review our director compensation program every two years with the advice of an independent compensation consultant. In November 2018, we modified our director compensation program, effective January 1, 2019, to increase the cash compensation for service on the board of directors from $35,000 to $40,000. On June 4, 2019, we modified our Scientific Advisory Committee chairperson compensation to $8,000. With the exception of the foregoing cash compensation increase, no other changes were made to our director compensation program.

Under our director compensation program, we pay our non-employee directors retainers in cash. Each director receives a cash retainer for service on the board of directors and for service on each committee on which the director is a member. The chairperson of each committee receives higher retainers for such service. These fees are paid quarterly in arrears. The fees paid to non-employee directors for service on the board of directors and for service on each committee of the board of directors on which the director was a member during 2020 were as follows:

	Member Annual Fee			Chairperson Annual Fee
Board of Directors		$	40,000		$	70,000
Audit Committee		$	7,500		$	15,000
Compensation Committee		$	6,250		$	12,500
Nominating and Corporate Governance Committee		$	4,000		$	8,000
Scientific Advisory Committee		$	4,000		$	8,000

Our director compensation program includes a stock-for-fees policy, under which directors have the right to elect to receive common stock in lieu of cash fees. These shares of common stock are issued under our 2013 Stock Incentive Plan. The number of shares issued to participating directors is determined on a quarterly basis by dividing the cash fees to be paid through the issuance of common stock by the fair market value of our common stock, which is the closing price of our common stock, on the first business day of the quarter following the quarter in which the fees are earned. In 2020, several of our directors elected to receive shares of our common stock in lieu of cash fees as set forth in the footnotes to the Director Compensation table below.

Under our director compensation program, we also reimburse our directors for travel and other related expenses for attendance at meetings. Additionally, upon their initial election to the board of directors, new non-employee directors receive an initial option grant to purchase 23,000 shares of our common stock, and all non-employee directors, other than the chairperson, receive an annual option grant to purchase 11,500 shares of our common stock. The chairperson receives an annual option grant for 14,500 shares of our common stock. The annual grants are made on the date of our annual meeting of stockholders and fully vest one year from that date of grant. The initial options granted to our non-employee directors vest with respect to one-third of the underlying shares on the first anniversary of the date of grant and the balance of the underlying shares vest in eight equal quarterly installments following the first anniversary of the date of grant, subject to continued service as a director, and are granted under our 2013 Stock Incentive Plan. These options are granted with exercise prices equal to the fair market value of our common stock, which is the closing price of our common stock, on the date of grant and will become immediately exercisable in full if there is a change in control of our Company.

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Under our retirement policy for non-employee members of the board, if a non-employee director is deemed to retire, then:

•

all outstanding options held by such director will automatically accelerate and vest in full; and

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the period during which such director may exercise the options will be extended to the expiration of the option under the plan.

Under the policy, a non-employee director will be deemed to have retired if:

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the director resigns from the board or determines not to stand for re-election or is not nominated for re-election at a meeting of our stockholders and has served as a director for more than 10 years; or

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the director does not stand for re-election or is not nominated for re-election due to the fact that he or she is or will be older than 75 at the end of such director’s term.

The following table sets forth a summary of the compensation we paid to our non-employee directors who served on our board in 2020.

DIRECTOR COMPENSATION FOR 2020

Name	Fees Earned or Paid in Cash ($)		Option Awards ($)(1)		Total ($)
Cristina Csimma		50,250		14,383		64,633
Michael Dougherty		52,757(2)		14,383		67,140
James A. Geraghty		78,000(3)		18,135		96,135
Mark Goldberg		55,500(4)		14,383		69,883
Maxine Gowen		56,500		14,383		70,883
Howard Pien		42,330(5)		14,383		56,713
Carol A. Schafer		55,804(6)		14,383		70,187

(1)

These amounts represent the aggregate grant date fair value of option awards made to each listed director in 2020 as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Stock Compensation,” or ASC 718. These amounts do not represent the actual amounts paid to or realized by the directors during 2020. See Note 12 to the financial statements included in our annual report on Form 10-K for the year ended December 31, 2020 regarding assumptions we made in determining the fair value of option awards. As of December 31, 2020, our non-employee directors, or former director in the case of Mr. Pien, held options to purchase shares of our common stock as follows: Dr. Csimma: 46,000; Mr. Dougherty: 46,000; Mr. Geraghty: 125,686; Dr. Goldberg: 57,375; Dr. Gowen: 48,625; Mr. Pien: 46,000; and Ms. Schafer: 46,000.

(2)

Consists of cash meeting fees of $52,757 in lieu of which Mr. Dougherty elected to receive 26,489 shares of our common stock.

(3)

Consists of cash meeting fees of $78,000 in lieu of which Mr. Geraghty elected to receive 39,337 shares of our common stock.

(4)

Consists of cash meeting fees of $55,500 in lieu of which Mr. Goldberg elected to receive 28,099 shares of our common stock.

(5)

Consists of cash meeting fees of $42,330 in lieu of which Mr. Pien elected to receive 23,422 shares of our common stock.

(6)

Includes cash meeting fees of $55,804 in lieu of which Ms. Schafer elected to receive 28,045 shares of our common stock.

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CORPORATE GOVERNANCE INFORMATION

Board of Directors

Our board of directors is responsible for establishing our broad corporate policies and overseeing the management of our Company. Our chief executive officer and our other executive officers are responsible for our day-to-day operations. Our board evaluates our corporate performance and approves, among other things, our corporate strategies and objectives, operating plans, major commitments of corporate resources and significant policies. Our board also evaluates and appoints our executive officers.

Our board of directors met five times during 2020. Each director who served as a director during 2020 attended at least 75% of the total number of board meetings and committee meetings for the committees on which he or she served during 2020.

While we do not have a formal policy regarding director attendance, we strongly encourage and expect our directors to attend our annual meetings of stockholders. All of our directors virtually attended the 2020 annual meeting of stockholders.

Board Leadership Structure

Our board of directors does not have a policy on whether the offices of chairperson of the board of directors and chief executive officer should be separate and, if they are to be separate, whether the chairperson of the board of directors should be selected from among the independent directors or should be an employee of our Company. Our board of directors believes that it should have the flexibility to make these determinations at any given point in time in the way that it believes best to provide appropriate leadership for our Company. Currently, Mr. Milano serves as our chief executive officer. Mr. Geraghty, an independent director, served as chair of our board of directors from 2013 until April 28, 2021, at which time Mr. Dougherty, also an independent director, succeeded him as chair. Our board of directors believes that this separation allows our chief executive officer to focus on our day-to-day business, while allowing the chairperson of the board of directors to lead the board of directors in its fundamental role of providing advice to and independent oversight of management.

Our board of directors recognizes that no single leadership model is right for all companies and at all times and that depending on the circumstances, other leadership models, such as a combined chairperson and chief executive officer, might be appropriate. Accordingly, the board of directors periodically reviews its leadership structure. Pursuant to our corporate governance guidelines, if the chairperson is not an independent director, the board of directors may elect a lead director from its independent directors. In such case, the chairperson and chief executive officer would consult periodically with the lead director on board of directors matters and on issues facing our Company. In addition, the lead director would serve as the principal liaison between the chairperson of the board of directors and the independent directors and would preside at any executive session of independent directors.

Board of Directors’ Role in Risk Oversight

Our board of directors, as a whole, has responsibility for risk oversight, with reviews of certain areas being conducted by relevant committees that report directly to the board of directors. The oversight responsibility of the board of directors and its committees is enabled by management reporting processes that are designed to provide visibility to the board of directors about the identification, assessment, and management of critical risks and management’s risk mitigation strategies. These areas of focus include competitive, economic, operational, financial (accounting, credit, liquidity, and tax), legal, regulatory, compliance, health, safety, environmental, political, and reputational risks. Our board of directors regularly reviews information regarding our strategy, operations, credit, and liquidity, as well as the risks associated with each. Our compensation committee is responsible for overseeing risks relating to our executive compensation plans and arrangements. Our audit committee is responsible for overseeing financial risks and risks associated with related party transactions. Our nominating and corporate governance committee is responsible for overseeing risks associated with governance and the independence of the board of directors. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, our entire board of directors is regularly informed through committee reports about such risks.

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Board Committees

Our board of directors has established three standing committees: audit, compensation, and nominating and corporate governance. Each of our audit, compensation, and nominating and corporate governance committees operates under a charter that has been approved by our board of directors. Our board of directors has also adopted corporate governance guidelines to assist our board of directors in the exercise of its duties and responsibilities. Current copies of the charters for the audit, compensation, and nominating and corporate governance committees and the corporate governance guidelines are posted on our website, www.iderapharma.com, and can be accessed by clicking “Investors” and “Corporate Governance.”

Audit Committee

Our audit committee’s purpose is to assist the board of directors’ oversight of our accounting and financial reporting processes and the audits of our financial statements. Our audit committee’s responsibilities include:

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appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm;

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overseeing the work of our independent registered public accounting firm, including through the receipt and consideration of certain reports from such accounting firm;

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reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures;

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monitoring our internal control over financial reporting, disclosure controls and procedures, and code of business conduct and ethics;

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discussing with management and our independent auditor about significant risks or exposures;

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establishing procedures for the receipt and retention of accounting related complaints and concerns;

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reviewing and approving related party transactions;

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meeting independently with our independent registered public accounting firm and management; and

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preparing the audit committee report required by SEC rules.

The current members of our audit committee are Ms. Schafer (Chair), Mr. Dougherty, and Dr. Goldberg. Our board of directors has determined that Ms. Schafer is an “audit committee financial expert” within the meaning of SEC rules and regulations. Each member of the audit committee is independent as defined under applicable rules of the Nasdaq, including the independence requirements contemplated by Rule 10A-3 under the Exchange Act. During 2020, our audit committee held four meetings.

Compensation Committee

Our compensation committee’s purpose is to oversee the discharge of the responsibilities of the board of directors relating to compensation of the Company’s executive officers, employees, and board members. Our compensation committee’s responsibilities include:

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approving the Company’s long-term strategy of compensation, including the consideration of base compensation, short-term incentive, and long-term incentive targets,

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reviewing and approving the compensation of the Company’s chief executive officer and the other executive officers;

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overseeing and administering our cash and equity incentive plans;

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reviewing and making recommendations to the board of directors with respect to director compensation;

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overseeing the evaluation of the Company’s senior executives;

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reviewing and discussing annually with management the compensation discussion and analysis required by the SEC rules and included in this proxy statement; and

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preparing the compensation committee report required by SEC rules.

The current members of our compensation committee are Dr. Gowen (Chair), Dr. Csimma, and Mr. Dougherty. During 2020, the compensation committee held six meetings. The compensation committee may delegate to one or more executive officers of the Company the power to grant operations or stock awards to employees of the Company or its subsidiaries who are not directors or executive officers of the Company. The compensation committee may also form and delegate authority to one or more subcommittees as it deems appropriate.

The processes and procedures followed by our compensation committee in considering and determining executive compensation are described below under the heading “Executive Compensation.”

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee’s purpose is to identify and recommend to the board of directors persons to be nominated for election as directors, develop and recommend corporate governance principals, and oversee the evaluation of the board of directors. Our nominating and corporate governance committee’s responsibilities include:

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reviewing with the board of directors the requisite skills and criteria for new board members, as well as the composition of the board as a whole;

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adopting and periodically reviewing procedures regarding director candidates proposed by stockholders;

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recommending to the board the directors to be appointed to each committee of the board;

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reviewing and assessing the adequacy of the corporate governance guidelines;

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determining the nature of the self-evaluation of the board, supervising the conduct of the evaluation, and preparing the assessment of the board’s performance; and

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overseeing the Company’s succession planning, which includes transitional leadership in the event of an unplanned vacancy.

The current members of our nominating and corporate governance committee are Messrs. Geraghty (Chair) and Dougherty, and Ms. Schafer. During 2020, the nominating and corporate governance committee held three meetings.

The processes and procedures followed by our nominating and corporate governance committee in identifying and evaluating director candidates are described below under the heading “Director Nomination Process.”

Director Independence

Our securities are listed on the Nasdaq Capital Market and we use the standards of “independence” prescribed by rules set forth by Nasdaq. Under Nasdaq rules, a majority of a listed company’s board of directors must be comprised of independent directors. In addition, Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit committee and compensation committee be independent and satisfy additional independence criteria set forth in Rules 10A-3 and 10C-1, respectively, under the Exchange Act. Under the applicable Nasdaq rules, a director will only qualify as an “independent director” if, in the opinion of our board of directors, that person does not have a relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors determined in early 2020 that each of Dr. Csimma, Mr. Dougherty, Mr. Geraghty, Dr. Goldberg, Dr. Gowen, Mr. Pienand Ms. Schafer and all of the members of each of the audit, compensation and nominating and corporate governance committees are independent as defined under applicable rules of the Nasdaq, and, in the case of all members of the audit and compensation committees, the independence requirements contemplated by Rule 10A-3 and Rule 10C-1 under the Exchange Act.

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Director Nomination Process

The process followed by our nominating and corporate governance committee to identify and evaluate director candidates includes requests to members of our board of directors and others for recommendations, meetings from time to time to evaluate biographical information and background material relating to potential candidates and interviews of selected candidates by members of our nominating and corporate governance committee and our board of directors. The nominating and corporate governance committee has from time to time used a third-party recruiting firm to identify and interview potential candidates.

In considering whether to recommend any particular candidate for inclusion in the board of director’s slate of recommended director nominees, the nominating and corporate governance committee will apply the criteria set forth in our corporate governance guidelines. These criteria include the candidate’s:

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business acumen;

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knowledge of our business and industry;

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age;

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experience;

•

diligence;

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conflicts of interest;

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ability to act in the interests of all stockholders; and

•

in the case of the renomination of existing directors, performance on our board of directors and on any committee of which the director was a member.

Our corporate governance guidelines also provide that candidates should not be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability, or any other basis proscribed by law and that our nominating and corporate governance committee should consider the value of diversity of the board of directors when evaluating particular candidates. The nominating and corporate governance committee has not adopted any formal or informal diversity policy and treats diversity as one of the criteria to be considered by the committee. The nominating and corporate governance committee does not assign specific weights to particular criteria that the nominating and corporate governance committee reviews and no particular criterion is a prerequisite for the consideration of any prospective nominee. We believe that the backgrounds and qualifications of our directors, considered as a group, should provide a composite and diverse mix of experience, knowledge, and abilities that will allow the board of directors to fulfill its responsibilities.

Stockholder Nominees

Stockholders may recommend individuals to the nominating and corporate governance committee for consideration as potential director candidates by submitting the individuals’ name, together with appropriate biographical information and background materials and a statement as to whether the stockholder or group of stockholders making the recommendation has beneficially owned more than 5% of our common stock for at least one year as of the date such recommendation is made, to the Nominating and Corporate Governance Committee, c/o Secretary, Idera Pharmaceuticals, Inc., 505 Eagleview Blvd., Suite 212, Exton, PA 19341. Assuming that appropriate biographical and background material has been provided on a timely basis, the nominating and corporate governance committee will evaluate stockholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates provided by other sources. If the board of directors determines to nominate a stockholder-recommended candidate and recommends his or her election, then his or her name will be included in our proxy card for the next annual meeting.

Stockholders also have the right under our bylaws to nominate director candidates directly, without any action or recommendation on the part of the nominating and corporate governance committee or the board of directors, by following the procedures set forth in our bylaws, including advance notice requirements. Candidates nominated by stockholders in accordance with the procedures set forth in our bylaws will not be included in our proxy card for the next annual meeting. See “Information about the 2021 annual meeting—

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How and when may I submit a proposal for the 2022 annual meeting of stockholders?” for more information about these procedures and the deadline for submitting director nominations.

Communicating with our Board of Directors

Stockholders and other interested parties may communicate directly with the board of directors (and with independent directors, individually or as a group). Our board of directors will give appropriate attention to written communications that are submitted by stockholders and will respond if and as appropriate. The chairperson of the board of directors (if an independent director) or the lead independent director, if any, is primarily responsible for monitoring communications from stockholders and for providing copies or summaries to the other directors, as he or she considers appropriate.

Communications are forwarded to all directors if they relate to important substantive matters and include suggestions or comments that the chairperson of the board of directors or lead independent director, as the case may be, considers to be important for the directors to know. In general, communications relating to corporate governance and long-term corporate strategy are more likely to be forwarded than communications relating to ordinary business affairs, personal grievances and matters that involve repetitive or duplicative communications.

Stockholders who wish to send communications on any topic to the board of directors should address such communications to Board of Directors, c/o Secretary, Idera Pharmaceuticals, Inc., 505 Eagleview Blvd., Suite 212, Exton, PA 19341.

Each communication from a stockholder should include the following information in order to permit stockholder status to be confirmed and to provide an address to forward a response if deemed appropriate:

•

the name, mailing address, and telephone number of the stockholder sending the communication;

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the number of shares held by the stockholder; and

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if the stockholder is not a record owner of our securities, the name of the record owner of our securities beneficially owned by the stockholder.

Code of Business Conduct and Ethics

We have adopted a written code of business conduct and ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have posted a current copy of the Code of Business Conduct and Ethics in the “Investors—Corporate Governance” section of our website, which is located at www.iderapharma.com. We intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of our code of business conduct and ethics by posting such information on our website at www.iderapharma.com.

Hedging Policy

Our insider trading policy prohibits our directors and employees (including our executive officers) from hedging or entering into other similar arrangements with respect to the Company’s securities, including, without limitation, short sales of Company securities, including short sales “against the box,” or purchases or sales of puts or calls or other derivative securities based on the Company’s securities.

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EXECUTIVE OFFICERS

Information about our Executive Officers

Our currently-serving executive officers and their respective ages and positions are described below. Our executive officers serve until they resign or the board terminates their position.

Name	Age	Position
Vincent J. Milano*	57	President and Chief Executive Officer
Daniel B. Soland	62	Senior Vice President, Chief Operating Officer
John J. Kirby	49	Senior Vice President, Chief Financial Officer
Bryant D. Lim	50	Senior Vice President, General Counsel and Corporate Secretary
Elizabeth Tarka	54	Senior Vice President, Chief Medical Officer

Mr. Milano is a member of our board of directors. See “Information about our Directors” above for more information about Mr. Milano.

Daniel B. Soland joined the Company in January 2021 as our Senior Vice President, Chief Operating Officer. Prior to joining us, Mr. Soland most recently served as the Chief Executive Officer of uniQure N.V. from December 2015 through October 2016 and as the Senior Vice President and Chief Operating Officer of ViroPharma Inc. from November 2006 through February 2014. Mr. Soland previously served as President of Chiron Corporation (“Chiron”) from January 2005 through June 2006, and helped engineer a turnaround that contributed to the acquisition of Chiron by Novartis International AG. Prior to then, he served as President and Chief Executive Officer of Epigenesis Pharmaceuticals Inc. and as Vice President and Director, Worldwide Marketing Operations at GlaxoSmithKline Biologicals. Earlier in his career, he held positions of increasing responsibility in sales and product management at Pasteur-Merieux’s Connaught Laboratories. Mr. Soland currently serves on the board of directors of KalVista Pharmaceuticals, Inc. (Nasdaq: KALV), Acadia Pharmaceuticals Inc. (Nasdaq: ACAD), and DBV Pharmaceuticals S.A. (Nasdaq: DBVT), each a publicly traded company. Mr. Soland holds a B.S. in Pharmacy from the University of Iowa.

John J. Kirby joined the Company in 2015 as our Vice President of Corporate Accounting. He served as Vice President of Finance from July 2018 to July 2019 and has served as Senior Vice President and Chief Financial Officer since July 2019 (principal financial officer and principal accounting officer since October 2018). Prior to joining us, Mr. Kirby served as Assistant Controller at Endo Pharmaceuticals, Inc. from November 2014 to October 2015. From August 2012 to July 2014, Mr. Kirby served as Vice President, Chief Accounting Officer and Corporate Controller at ViroPharma Incorporated, which was acquired by Shire Plc in January 2014. Mr. Kirby began his career at KPMG, LLP in their Healthcare and Life Science Practice and served as a Regional Audit Director at AstraZeneca Pharmaceuticals L.P. prior to joining ViroPharma Incorporated. Mr. Kirby received his B.S. in Accountancy from Villanova University and is a licensed certified public accountant in the Commonwealth of Pennsylvania.

Bryant D. Lim has been our Senior Vice President, General Counsel and Secretary since September 2018. Prior to joining us, Mr. Lim served as Vice President, Assistant General Counsel and, prior to that, Global Chief Compliance Officer at Incyte Corporation from March 2014 to September 2018. Prior to Incyte Corporation, Mr. Lim held roles of increasing responsibility at ViroPharma Incorporated from January 2009 until its acquisition by Shire Plc in January 2014. Mr. Lim served as Assistant Counsel at Merck & Co., Inc. and also was associated with Morgan, Lewis & Bockius, LLP. Mr. Lim began his legal career as a law clerk for a federal judge. Mr. Lim received his J.D. from Villanova University School of Law, where he currently serves on its adjunct faculty where he teaches about the Law of Drugs and Biologics. Mr. Lim received his B.A. from the University of Rochester. Mr. Lim also serves on the board of directors of Life Sciences of Pennsylvania.

Elizabeth Tarka, M.D., FACC, joined our Company as Senior Vice President, Chief Medical Officer in July 2019. Prior to joining us, Dr. Tarka served as Vice President, Clinical Development at Complexa, Inc. from September 2017 to July 2019 where she was responsible for the clinical development of a novel asset in rare diseases. Prior to Complexa, Inc., Dr. Tarka served as Clinical Program Lead, Clinical Development at Janssen Pharmaceuticals, Inc. (“Janssen”) from September 2015 to September 2017, where she was the

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Clinical Program Leader for Xarelto® (rivaroxaban) and was responsible for the design, implementation, and medical oversight for large multinational trials. Dr. Tarka held roles of increasing responsibility in late state clinical development of cardiovascular medications at GlaxoSmithKline plc from May 2003 to May 2015 and held the role of Senior Director, Clinical Development at the time of her transition to Janssen. Dr. Tarka earned her B.A. in Biochemistry and an M.D. from the University of Pennsylvania where she also completed her Internal Medicine residency and Cardiovascular fellowship training. She was also an Assistant Professor of Medicine in the Cardiovascular Division at the University of Pennsylvania where she had numerous major teaching and clinical responsibilities.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of March 31, 2021 (except as otherwise indicated below), information we know about the beneficial ownership of our common stock by:

•

each person or entity, including any “group” as that term is used in Section 13(d)(3) of the Exchange Act, who is known by us to own beneficially more than 5% of the issued and outstanding shares of our common stock;

•

each of our current directors and director nominees;

•

each of our named executive officers, as set forth in the Summary Compensation Table set forth in this proxy; and

•

all of our current directors and executive officers as a group.

We have determined beneficial ownership in accordance with the rules of the SEC, and the information in the table below is not necessarily indicative of beneficial ownership for any other purpose. The SEC has defined “beneficial” ownership of a security to mean the possession, directly or indirectly, of voting power and/or investment power. In computing the percentage ownership of each person, shares of common stock subject to options, warrants, or rights held by that person that are currently exercisable, or exercisable within 60 days of March 31, 2021, are deemed to be outstanding and beneficially owned by that person. These shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person.

To our knowledge and except as indicated in the notes to this table and pursuant to applicable community property laws, each stockholder named in the table has sole voting and investment power with respect to the shares set forth opposite such stockholder’s name. The percentage of ownership is based on 46,536,688 shares of our common stock issued and outstanding on March 31, 2021. All fractional common share amounts have been rounded to the nearest whole number. To our knowledge, except as noted below, no person or entity is the beneficial owner of more than 5% of the voting power of the company’s stock.

Number of Shares
Beneficially Owned

Percentage of
Outstanding
Shares

Name and Address of Beneficial Owner(1)

5% Stockholders

Pillar Investment Entities (collectively, “Pillar”)

10,139,190(2)

19.99%

c/o Stuarts Corporate Services Ltd.
Kensington House, 69 Dr. Roy’s Drive
Georgetown, Grand Cayman KY1-1104
Cayman Islands

Named Executive Officers and Directors

Vincent J. Milano

707,857(3)

1.5%

John J. Kirby

312,815(4)

Bryant D. Lim

353,684(5)

Elizabeth Tarka

294,237(6)

R. Clayton Fletcher

241,374(7)

Cristina Csimma

38,295(8)

Michael R. Dougherty

75,940(9)

James A. Geraghty

230,456(10)

Mark Goldberg

95,474(11)

Maxine Gowen

49,500(12)

Carol A. Schafer

88,709(13)

All current directors and executive officers as a group (11 individuals)

2,465,810(14)

5.1%

Denotes less than 1% beneficial owner.

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(1)

Except as otherwise noted, the address for each person listed above is c/o Idera Pharmaceuticals, Inc., 505 Eagleview Boulevard, Suite 212, Exton, PA 19341.

(2)

On April 1, 2021, Pillar Pharmaceuticals 6, L.P. (“Pillar 6”), together with Pillar Invest Corporation (“Pillar GP”), Pillar Partners Foundation, L.P. (“Pillar Foundation,” and, together with Pillar 6 and Pillar GP, the “Pillar Entities”), Abude Umari and Youssef El Zein (together with the Pillar Entities and Mr. Umari, the “Reporting Persons”) filed Amendment No. 9 to a Schedule 13D with the SEC reporting the following beneficial ownership: (i) sole voting power with respect to zero shares; (ii) shared voting power with respect to 16,750,100 shares; (iii) sole dispositive power with respect to zero shares; and (iv) shared dispositive power with respect to 16,750,100 shares. The percentage reported for the shares of common stock is capped at 19.99% as a result of blocker provisions that limit the number of warrants exercisable for shares of common stock that are held by certain of the Pillar Entities.

The Reporting Persons expressly disclaim status as a “group” for purposes of Amendment No. 9 to the Schedule 13D. The Pillar Entities exercise no voting or dispositive power over and expressly disclaim beneficial ownership of any shares held directly by Messrs. Umari and El Zein, and Messrs. Umari and El Zein expressly disclaim beneficial ownership of any shares of common stock held directly by Pillar 6, Pillar Foundation and indirectly by Pillar GP.

(3)

Includes 543,871 shares of common stock subject to outstanding stock options that are exercisable within 60 days after March 31, 2021.

(4)

Includes 285,183 shares of common stock subject to outstanding stock options that are exercisable within 60 days after March 31, 2021.

(5)

Includes 323,250 shares of common stock subject to outstanding stock options that are exercisable within 60 days after March 31, 2021.

(6)

Includes 281,000 shares of common stock subject to outstanding stock options that are exercisable within 60 days after March 31, 2021.

(7)

Includes 232,136 shares of common stock subject to outstanding stock options that are exercisable within 60 days after March 31, 2021.

(8)

Includes of 38,295 shares of common stock subject to outstanding stock options that are exercisable within 60 days after March 31, 2021.

(9)

Includes 38,295 shares of common stock subject to outstanding stock options that are exercisable within 60 days after March 31, 2021.

(10)

Includes 125,686 shares of common stock subject to outstanding stock options that are exercisable within 60 days after March 31, 2021.

(11)

Includes 57,375 shares of common stock subject to outstanding stock options that are exercisable within 60 days after March 31, 2021.

(12)

Includes 48,625 shares of common stock subject to outstanding stock options that are exercisable within 60 days after March 31, 2021, and 875 shares of common stock held in the name Brian Macdonald for Maxine Gowen Trust, for which Dr. Gowen is a beneficiary and trustee.

(13)

Includes 40,221 shares of common stock subject to outstanding stock options that are exercisable within 60 days after March 31, 2021.

(14)

Includes 1,981,801 shares of common stock subject to outstanding stock options held by the directors and executive officers as a group that are exercisable within 60 days after March 31, 2021.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) should be read in conjunction with the compensation tables and narratives that immediately follow this section.

Overview

We are a development stage biotechnology company focused on the acquisition, development, and ultimate commercialization of drug candidates for both oncology and rare disease indications characterized by small, well-defined patient populations with serious unmet needs. As such, we operate in an environment that is very competitive from a business perspective and for talent. We see our competitive compensation program as one element of our employee value proposition that allows us to attract and retain the resources we need to drive our business success.

Purpose

The purpose of this CD&A is to provide our stockholders with an overview and understanding of the philosophy, objectives, process, components, decision making, and additional aspects of our 2020 executive compensation program. This analysis focuses on the compensation paid to our named executive officers (“NEOs”):

•

Vincent J. Milano, President and Chief Executive Officer,

•

John J. Kirby, Senior Vice President and Chief Financial Officer

•

Bryant D. Lim, Senior Vice President, General Counsel and Corporate Secretary

•

Elizabeth Tarka, Senior Vice President, Chief Medical Officer

•

R. Clayton Fletcher, Former Senior Vice President of Business Development and Strategy(1)

(1)

Mr. Fletcher served as our Senior Vice President of Business Development and Strategy until December 31, 2020. Mr. Fletcher currently provides consulting services to the Company.

Business Achievements

Our executive compensation program is designed to, among other goals, align executive compensation with the achievement of measurable corporate objectives. During 2020, the Company achieved the following:

•

progressed tilsotolimod toward its potential registration in anti-PD1 refractory melanoma;

•

completed and expanded of the initial cohort of our phase 2 trial of tilsotolimod in microsatellite-stable colorectal cancer (“MSS-CRC”); and

•

enhanced of our financial position.

Further detail regarding our 2020 goals and performance can be found in the section “Annual Cash Incentive Award.”

Key Compensation Decisions and Actions

Our compensation committee took several actions in 2020, based on our compensation philosophy and objectives, the needs and performance of our Company, individual performance, and other factors such as market data and industry best practices.

•

Base Salary. The compensation committee reviewed base salaries of our NEOs in January 2020. No adjustments were made to the salaries of Messrs. Fletcher, Kirby, and Lim, and Dr. Tarka as they were determined to be market competitive during our benchmark analysis.

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In January 2020, the Company entered into an amendment to Mr. Milano’s employment agreement. This amendment was recommended by Mr. Milano as a way for the Company to conserve cash during 2020 and was approved by the board. Under the terms of the amendment, Mr. Milano’s annual base salary of $600,000 was paid as follows: (i) for the period from January 1, 2020 to January 10, 2020, $18,182 was paid in cash; and (ii) for the period immediately following January 10, 2020 to December 31, 2020, an additional $6,600 was paid in cash with the balance of his 2020 salary, approximately $575,218, paid in the form of restricted stock units (“RSUs”). These RSUs were granted to Mr. Milano on December 18, 2020 and were fully vested on such date, with the number of RSUs (128,170) determined based on the average fair market value of the Company’s common stock for the five trading days immediately preceding the grant date.

Further detail regarding our salary review and decision-making process is provided below in the section entitled “Base Salary.”

•

Annual Cash Incentive Award. In January 2020, the compensation committee approved corporate goals as part of our 2020 bonus program. The corporate goals consisted of three primary corporate objectives, each with its own weighting to reflect their importance to our business. To the extent goals are partially met or exceeded, the compensation committee may exercise discretion and ascribe a partial achievement or overachievement percentage to each goal, as applicable. The compensation committee also reviews individual performance to determine whether the potential bonus should be increased or decreased. In January 2021, the compensation committee reviewed our 2020 performance against our 2020 corporate objectives and agreed to attribute a corporate performance score of 95%. Further detail relating to this program is provided below in the section entitled “Annual Cash Incentive Award.”

•

Long-Term Equity Incentive Awards. In January 2020, the compensation committee approved the grant of the first tranche of the biannual option awards and an award of RSUs to our NEOs. Additionally, in July 2020, the compensation committee approved the grant of the second tranche of biannual option awards to our NEOs as well as a special, performance-based RSU award to Messrs. Fletcher, Kirby, Lim, and Milano. Further detail relating to our stock incentive program and the special performance-based RSU Award is provided in the section “Long Term Equity Compensation.”

Compensation Philosophy and Objectives

Our general executive compensation philosophy has been established by our compensation committee, which acts pursuant to authority delegated to it by our board and as set forth its charter. Our compensation committee is comprised solely of independent directors as defined by applicable rules and regulations of Nasdaq and the SEC. See “Board Committees—Compensation Committee” for further detail regarding the composition, independence, and responsibilities of our compensation committee. Our executive compensation program is designed to achieve the following broad goals:

•

attract, retain, and motivate the best possible executive talent;

•

ensure executive compensation is aligned with our corporate strategies and business objectives, including our short-term operating goals and longer-term strategic objectives;

•

promote the achievement of key strategic and financial performance measures by linking short- and long-term cash and equity incentives to the achievement of measurable corporate and individual performance goals; and

•

align executives’ incentives with the creation of stockholder value.

To achieve these objectives, the compensation committee:

•

sets short- and long-term compensation at levels the compensation committee believes are competitive with those of other companies in our industry and our region that compete with us for executive talent;

•

conditions a substantial portion of each executive officer’s overall cash compensation on the achievement of key strategic, financial, research, and operational goals, such as clinical trial and

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regulatory progress, intellectual property portfolio development, establishment and maintenance of key strategic relationships, and exploration of business development opportunities, as well as our financial and operational performance; and

•

provides a portion of our executive compensation in the form of equity awards that vest (i) over time from the date of grant of the awards and/or, when applicable, (ii) upon the achievement of performance milestones, which we believe helps retain our executive officers and align their interests with those of our stockholders by allowing them to participate in the longer-term success of our Company as reflected in stock price appreciation.

Advisory Vote on Executive Compensation

We conducted an advisory vote on executive compensation, commonly referred to as a “say-on-pay” proposal, at our 2020 Annual Meeting of Stockholders. While this advisory vote was not binding, we value the opinions of our stockholders and, to the extent there is any significant vote against the compensation of our NEOs in the future, we will consider our stockholders’ concerns and our board and compensation committee will evaluate whether any actions are necessary to address those concerns.

At our 2020 Annual Meeting of Stockholders, approximately 96% of the votes cast on the advisory vote on executive compensation approved the 2019 compensation paid to our NEOs as disclosed in the proxy statement for that meeting. The board and compensation committee considered the results of this advisory vote, together with the other factors and data, in determining executive compensation for 2020 and will continue to consider the outcome of our say-on-pay votes when making future compensation decisions for our NEOs.

Executive Compensation Process

Role of Our Compensation Committee and Our Chief Executive Officer

In order to accomplish its objectives consistent with its philosophy for executive compensation and determine compensation for our NEOs, our compensation committee reviews competitive information on executive compensation practices from peer companies as well as an assessment of overall corporate performance and individual performance. In connection therewith, our compensation committee typically takes the following actions annually:

•

reviews chief executive officer performance;

•

seeks input from our chief executive officer on the performance of the other NEOs;

•

reviews all components of our executive compensation program, including base salary, cash bonus targets and awards, equity compensation, and the estimated payout obligations under severance and change in control scenarios;

•

considers historic compensation and amounts realizable from prior awards;

•

consults with its independent compensation consultant;

•

holds executive sessions (without our management present);

•

reviews information regarding the executive compensation of its peer companies;

•

considers the say-on-pay vote from the prior year; and

•

reviews the outcomes from the foregoing with the board of directors.

Our chief executive officer does not submit an assessment of his own performance and does not participate in the portion of the compensation committee meeting where his compensation is determined. Our compensation committee reviews and approves, or recommends for approval by the board, the compensation of our NEOs, including our chief executive officer.

Under our annual performance review program, annual performance goals are determined for our Company as a whole and for each individual NEO.

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•

Annual corporate goals are proposed by management and approved by the board. These corporate goals target the achievement of specific research, clinical, operational, and financial milestones. The compensation committee determines the weighting of and how the components of our annual corporate goals will contribute to the overall performance evaluation.

•

Annual individual goals focus on contributions that facilitate the achievement of our corporate goals. Individual goals are proposed at the start of each year by each NEO and approved by the chief executive officer (except with respect to himself) and, in the case of the chief executive officer and as appropriate for the other NEOs, the compensation committee. Typically, the compensation committee sets the chief executive officer’s goals and reviews and discusses with the chief executive officer the goals for the other NEOs. The individual performance goals of each NEO consist primarily of the key objectives and goals from our annual business plan that relate to the functional area for which such NEO is responsible. As the chief executive officer oversees all aspects of our business, the individual performance goals for the chief executive officer are largely coextensive with the corporate goals.

At the end of each year, the compensation committee evaluates corporate and individual NEO performance.

In assessing corporate performance, the compensation committee evaluates corporate performance relative to the approved corporate goals for the applicable year, as well as other aspects of corporate performance, including progress and achievement of milestones outside of the corporate goals.

The compensation committee evaluates individual performance with respect to the areas that fall within each NEO’s responsibility. In doing so, the compensation committee relies on the chief executive officer’s evaluation of the other NEOs. The chief executive officer prepares evaluations of the other NEOs, which includes comparing such individual’s performance to his or her individual performance goals. The chief executive officer recommends annual executive salary increases, annual stock option awards, and bonuses, if any, for the other NEOs; the compensation committee then reviews and approves, as appropriate, the chief executive officer’s recommendations. In the case of the chief executive officer, the compensation committee independently conducts his individual performance evaluation and determines his compensation accordingly.

During this process, the compensation committee consults with its independent compensation consultant. In connection with the compensation committee’s annual performance and compensation review in the fourth quarter of each year, the independent compensation consultant provides the compensation committee with a blend of the data from the peer group (identified below for 2020 compensation decisions) and relevant compensation survey data from the Radford Global Life Sciences Survey. We refer to this blended data as the “market compensation data.”

For all NEOs, annual base salary increases, if any, are awarded during the first quarter following the end of the fiscal year. Equity awards and bonuses, if any, are granted as determined by the compensation committee. Annual bonuses are typically established in the first quarter of the fiscal year, with payout for such bonuses in January of the following fiscal year upon the compensation committee’s determination of the achievement of the applicable performance goals. Equity awards are typically given in two biannual tranches, generally in the first and third quarters of the fiscal year. Special equity awards, if any, are granted on an ad hoc basis as determined by the compensation committee. During 2020, the compensation committee approved a special performance-based RSU award to certain NEOs as described in the section “Long Term Equity Compensation.”

Role of the Compensation Committee’s Independent Consultant

In the third quarter of 2019, our compensation committee engaged Pearl Meyer & Partners, LLC (“Pearl Meyer”) in connection with our 2020 annual compensation assessment to review our executive compensation practices and to provide the compensation committee with an assessment of our compensation program against competitive market data. See “Use of Market Compensation Data” below for a discussion of the competitive market compensation data compiled by Pearl Meyer. Based on this assessment, Pearl Meyer made recommendations to our compensation committee regarding the amount and form of executive officer compensation, including the ratio of cash to equity compensation and “at risk” compensation.

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Pearl Meyer did not provide any services to our Company during 2020 other than pursuant to their respective engagement by the compensation committee, which was limited to aforementioned assessment of our executive officer compensation program.

Our compensation committee analyzed whether the engagement of Pearl Meyer as our compensation consultant raised any conflict of interest, taking into consideration the following factors: (a) the provision of other services to us by Pearl Meyer; (b) the amount of fees received from us by Pearl Meyer, as a percentage of the total revenue of Pearl Meyer; (c) Pearl Meyer’s policies and procedures that are designed to prevent conflicts of interest; (d) any business or personal relationship with Pearl Meyer or the individual advisors employed by Pearl Meyer and a member of the compensation committee or any executive officer; and (e) any shares of our stock owned by Pearl Meyer or the individual advisors employed by Pearl Meyer. Our compensation committee determined, based on its analysis of the above factors, that the work of Pearl Meyer and the individual compensation advisors employed by Pearl Meyer as compensation consultants did not create any conflict of interest. Accordingly, the compensation committee determined that Pearl Meyer is independent. Going forward, the compensation committee intends to assess the independence of any of our compensation advisers by reference to the foregoing factors, consistent with applicable rules and regulations of Nasdaq and the SEC.

Benchmarking: Use of Market Compensation Data

In making compensation decisions, our compensation committee reviewed competitive market compensation data compiled by Pearl Meyer. As part of its engagement, Pearl Meyer worked with the compensation committee in the fourth quarter of 2019 to create a peer group of publicly traded companies to be used in connection with our 2020 compensation decisions, including stock options granted during 2020, fiscal year 2020 salary adjustments, and fiscal year 2020 target bonus percentages. In selecting this peer group, the compensation committee and Pearl Meyer generally targeted mid- to late-development stage companies in the pharmaceutical and biotechnology sectors that generally met the following screening criteria:

•

Company Size: pre-commercial companies, small or micro-cap companies (under $1 billion in market capitalization), companies with a last twelve months’ (“LTM”) operating expense of less than $100 million, and companies with fewer than 100 employees;

•

Business Operations: companies with five or fewer Phase 2 or Phase 3 assets focused on cancer/oncology/immune-oncology, and with no or few other areas of research and development; and

•

Other: exclude subsidiaries, companies with business challenges, and companies that have recently conducted an initial public offering.

The following table lists the companies included in the peer group used in connection with our 2020 compensation decisions referred to above:

Aeglea BioTherapeutics, Inc.	Molecular Templates, Inc.*	Syndax Pharmaceuticals, Inc.
Calithera Biosciences, Inc.*	NewLink Genetics Corporation	Syros Pharmaceuticals, Inc.*
Galectin Therapeutics, Inc.	Selecta Biosciences, Inc.	Tyme Technologies, Inc.*
Leap Therapeutics, Inc.*	Sesen Bio, Inc.	ZIOPHARM Oncology, Inc.
MEI Pharma, Inc.*	Spring Bank Pharmaceuticals, Inc.
Miragen Therapeutics, Inc.*	Sunesis Pharmaceuticals, Inc.*

Newly-added company to the peer group used in connection with our 2020 compensation decisions. Such addition(s) replaced the following companies used in the peer group used in connection with our 2019 compensation decisions: Bellicum Pharmaceuticals, Inc., Dynavax Technologies Corporation, Endocyte, GTx, Inc., Inovio Pharmaceuticals, Inc., Stemline Therapeutics, Inc., and Verastem, Inc.

The foregoing peer group companies were recommended by Pearl Meyer and approved by our compensation committee because they have similar business profiles to ours considering number of employees, market value, and stage of development. Changes to the screening criteria used for determining

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the peer group used for 2020 compensation decisions, as compared to the determination of the peer group used for 2019 compensation decisions, primarily related to peer company size and included: (i) reducing the LTM operating expenses criteria from less than or equal to $220 million to less than $100 million, (ii) reducing the number of employees criteria from fewer than 200 to fewer than 100, and (iii) narrowing the areas of business focus to companies primarily with five or fewer Phase 2 assets or Phase 3 assets. Based on application of this revised screening criteria, certain companies were excluded from or added to the peer group used for the 2020 compensation decisions.

Our compensation committee intends that if we achieve our corporate goals and the executive officer performs at the level expected, the executive officer should have the opportunity to receive compensation that is competitive with industry norms. Accordingly, our compensation committee generally targets overall compensation for NEOs around the 50th percentile of the market data. However, the compensation committee does not apply those targets formulaically and allows for NEOs to be positioned at different percentiles based on each individual NEO’s experience, performance level, and duties and responsibilities.

Components of Executive Compensation

The primary elements of our executive compensation program are:

•

base salary;

•

annual cash bonuses;

•

long-term equity awards (i.e., stock option and RSUs);

•

severance and change in control benefits; and

•

broad-based benefits and limited perquisites.

Base salaries are an important part of the NEOs’ total compensation package and are intended to reflect their respective positions, duties, and responsibilities. Base salary provides a baseline compensation level, serving as a stable, fixed component of compensation that delivers cash income to each NEO. Annual base salaries have historically been based on, among other factors, a NEO’s knowledge, experience, expertise, perceived abilities, and expected contributions. The factors considered are not assigned specific weights.

Our variable or “at-risk,” performance-based compensation consists of short-term compensation in the form of an annual cash bonus and long-term compensation in the form of equity awards that vest over time from the date of grant of the award or from the time of achievement of performance milestones. The annual cash bonus is intended to provide an incentive to our NEOs to achieve short-term operational objectives, while equity awards are intended to incentivize our NEOs to achieve longer-term strategic business goals, which should ultimately lead to higher stock prices and increased stockholder value. We do not have any formal or informal policy or target for allocating compensation between long-term and short-term compensation, between cash and non-cash compensation, or among the different forms of non-cash compensation. Instead, the compensation committee, after reviewing industry information, including the compensation practices of our peer companies, and our cash resources, determines subjectively what it believes to be the appropriate level and mix of the various compensation components.

We do not have any defined benefit pension plans or non-qualified deferred compensation plans. We maintain broad-based benefits, including health, dental and vision insurance, life and disability insurance, and a 401(k) plan, that are provided to all employees. Our NEOs may also participate in our employee stock purchase plan, which is generally available to all employees who work over 20 hours per week, so long as they own less than 5% of our common stock, including for this purpose vested and unvested stock options. We provide limited perquisites consisting of certain relocation benefits.

We are party to employment agreements and employment offer letters with each of our NEOs. Employment agreements and employment offer letters with our NEOs are described below under the caption “Employment Agreements with our NEOs.”

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Base Salary

In establishing base salaries for our NEOs, our compensation committee typically:

•

reviews the market compensation data provided by the independent compensation consultant;

•

considers historic salary levels of the NEO and the nature of the NEO’s responsibilities;

•

compares each NEO’s base salary with the salaries of our other NEOs; and

•

considers the NEO’s experience, performance, and contributions.

The compensation committee also typically considers the challenges involved in hiring and retaining executive talent in our industry and region. In assessing the NEO’s performance, the compensation committee considers his or her role in achieving the annual corporate goals, as well as, in the case of our NEOs other than our chief executive officer, the performance evaluation prepared by our chief executive officer with respect to such NEO. The chief executive officer’s evaluation provides the compensation committee insight as to whether each individual NEO’s performance was generally consistent with our expectations.

As part of our 2019 annual performance and compensation review, the compensation committee approved annual base salaries for our executive officers for 2020. In setting these annual base salaries, the compensation committee reviewed the 2019 market compensation data presented by Pearl Meyer. The compensation committee approved the following base salary amounts:

NEO	2019 Base Salary			2020 Base Salary			% Increase
Mr. Milano(1)		$	600,000		$	600,000		0.0
Mr. Kirby		$	336,000		$	336,000		0.0
Mr. Lim		$	336,000		$	336,000		0.0
Dr. Tarka		$	375,000		$	375,000		0.0
Mr. Fletcher(2)		$	400,000		$	400,000		0.0

(1)

While the amount of Mr. Milano’s base salary remained unchanged, the Company entered into an amendment to Mr. Milano’s employment agreement in January 2020 that altered the form of Mr. Milano’s base salary and significantly reduced the amount of cash that he received during the year. Pursuant to this amendment, in an effort to preserve cash reserves, Mr. Milano’s annual base salary of $600,000 was paid as follows: (i) for the period from January 1, 2020 to January 10, 2020, $18,182 was paid in cash; and (ii) for the period immediately following January 10, 2020 to December 31, 2020, an additional $6,600 was paid in cash and the balance of his 2020 salary, approximately $575,218, was paid in the form of 128,170 RSUs granted to Mr. Milano on December 18, 2020.

(2)

Mr. Fletcher served as our Senior Vice President of Business Development and Strategy until December 31, 2020.

Annual Cash Incentive Award

The annual cash incentive award provides an opportunity for additional compensation to NEOs if pre-established annual performance goals are attained. The compensation committee generally links cash awards to the achievement of the annual corporate goals, including unexpected corporate performance outside of the corporate goals and individual performance. The amount of the bonus paid, if any, varies among the NEOs depending on individual performance, individual contribution to the achievement of our annual corporate goals, and corporate performance generally and the compensation committee may exercise discretion in its determinations. The annual cash incentive award targets are based on a target percentage of each NEO’s salary. In determining the target bonus percentages for each of our NEOs, the compensation committee concluded that the target bonus percentages should be competitive with the 50th percentile of the market compensation data and that the target bonus percentage for each NEO, with the exception of our chief executive officer, be the same. The target bonus was established by the compensation committee for each NEO at the time of hire, with the exception of Mr. Fletcher, whose target bonus was adjusted in December 2015, and Mr. Kirby, whose target bonus was adjusted concurrent with his promotion to Chief

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Financial Officer in 2019. Each year, the compensation committee reviews the individual bonus target percentages against the market data to ensure its competitiveness.

The following table sets forth the individual bonus target percentages for each of our NEOs for 2020.

NEO	2020 Target Cash Bonus (% of Base Salary)
Mr. Milano		50%
Mr. Kirby		40%
Mr. Lim		40%
Dr. Tarka		40%
Mr. Fletcher		40%

Consistent with our Company-wide annual incentive plan applicable to all employees, including our NEOs, both a corporate performance score and individual performance score factored into the determination of each NEO’s cash bonus award for 2020.

Under the terms of our incentive plan, the corporate performance score is based on the degree to which corporate performance objectives have been achieved. This score is determined by the compensation committee and may range from 0-125%. The individual performance score also may range from 0-125% and is based on:

•

the degree to which individual performance objectives have been achieved;

•

the competencies and behaviors, such as leadership, judgment, decision making, management, and collaboration, demonstrated in achieving results;

•

the technical skills required by the position; and

•

the completion of the ongoing responsibilities required by the position.

The corporate performance score and the individual performance score is approved by the compensation committee. The individual’s actual award is then calculated as follows:

[MISSING IMAGE: tm212504d1_fc-payout4c.jpg]

In setting corporate goals in the first quarter of 2020, the compensation committee agreed to group the business objectives into one of three primary categories, each of which would contribute toward the overall assessment of our corporate performance. In assessing our achievement of the 2020 corporate goals, and determining the corporate performance score, the compensation committee considered the extent to which the Company achieved the business objectives in each of the categories, and assigned a score for each category, as summarized in the following table:

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Primary Goals	Contribution toward Corporate Performance Score(1)	Weighted Achievement of Performance Goal(2)	Highlights of Performance on Key Objectives
Advance Tilsotolimod (IMO-2125) program through Phase 3 and beyond PD-1 refractory melanoma	80%	70%	• Progressed ILLUMINATE-301 study toward database lock and New Drug Application (“NDA”) filing. • Completed initial assessment of patients in first phase of MSSCRC cohort for ILLUMINATE-206 study and commenced enrollment of additional patients for evaluation. • Completed various NDA-readiness initiatives, including successful manufacturing of GMP batch of tilsotolimod. • Completed ILLUMINATE-204 study database lock and released topline data.
Continue business development initiatives through rare disease exploration	10%	10%	• Active due diligence on multiple strategic business development options.
Enhance ability to be successful through relevant foundational objectives	10%	15%	• On target with respect to financial budget. • Closed two private placement financings from which we have received $15.1 million in 2020 with the potential for up to $40.7 million in aggregate. • Extended cash runway into the second quarter of 2022. • Minimized impact of COVID-19 disruption.
TOTAL	100%	95%

(1)

Percentages shown in this column represent the weight allocated to each performance goal.

(2)

Amounts represent the weighted achievement of each performance goal.

Based on these achievements and resulting category scores, in February 2021, the compensation committee approved a corporate performance score of 95%.

In assessing each NEO’s individual performance score, the compensation committee determined:

•

Mr. Milano’s overall score was equivalent to the corporate performance score of 95%;

•

In recognition of his achievement against his personal objectives, including his role in contributing to the closing of our private placements and execution of other financing vehicles, as well as his overall leadership contributions, Mr. Kirby’s individual performance score was 110%. Using the broader corporate score of 95%, as noted above, this resulted in an overall bonus equal to 105% of his bonus target;

TABLE OF CONTENTS

•

Recognizing his achievement against his personal objectives, including legal support to the ILLUMINATE program, contributing to the closing of our private placements, and corporate governance-related matters, along with his overall leadership contributions, Mr. Lim’s individual performance score was 110%. Using the broader corporate score of 95% as noted above, this resulted in an overall bonus equal to 105% of his bonus target;

•

Based on her achievement against her personal objectives, including clinical leadership of the ILLUMINATE program, along with her overall leadership contributions, Dr. Tarka’s individual performance score was 100%. Using the broader corporate score of 95%, as noted above, this resulted in an overall bonus equal to 95% of her bonus target; and

•

Mr. Fletcher’s individual performance score, recognizing his achievement against his personal objectives, including his role in business development, and his overall leadership contributions, was 100%. Using the broader corporate score of 95%, as noted above, this resulted in an overall bonus equal to 95% of his bonus target.

The following table sets forth the target bonus amounts, the corporate and individual performance scores, the overall scores, and the resulting bonus payout amounts for each NEO.

NEO

Target
Bonus

Overall
Score

Bonus
Payout

SEC Form DEF 14A filed by Idera Pharmaceuticals, Inc.