Remuneration

Remuneration to the Board of Directors

Fees to board members elected by the general meeting are resolved by the annual general meeting. At the annual general meeting held on 23 November 2018, it was resolved that fees of SEK 400,000 were to be paid to the chairman and that fees of SEK 200,000 was to be paid to each of the other board members who are not employed by the company. In addition, it was resolved that fees of SEK 50,000 should be paid to the chairman of the audit committee and that fees of SEK 25,000 should be paid to each other member of the audit committee.

 

Guidelines for remuneration to the CEO and other senior executives

At the annual general meeting held on 23 November 2018, guidelines were adopted with the following main content. The company shall offer remuneration levels and employment terms at market terms, aimed at facilitating the recruitment and retention of senior executives with high competence and capacity, in order to achieve established targets. The remuneration to the CEO and other senior executives can be comprised of fixed salary, variable remuneration, pension benefits, share-based incentive programs resolved by the shareholders’ meeting and other benefits.

The fixed salary shall take into consideration the individual’s competence, area of responsibility and performance. The variable remuneration is to be based on the outcome of predetermined well defined objectives. The variable consideration is to be limited and may not exceed 40 per cent of the fixed annual salary for the CEO and 20 per cent of the fixed annual salary for other senior executives, whereby the individual highest level should be based on factors such as the position held by the specific individual.

In addition to what follows from law or collective bargain agreements or other agreements, the CEO and other senior executives may be entitled to arrange individual pension schemes. Refrained salaries and variable remuneration can be used for increased pension contributions, provided that the total cost for the company is unchanged over time. Share-based incentive programs shall, where applicable, be resolved by the shareholders’ meeting. In case of termination of the CEO’s employment by the company, the notice period should not exceed six months.

In case the company terminates the CEO’s employment, in addition to salary during the notice period, severance payment corresponding to up to six months base salary shall be permitted. The notice period for other senior executives shall not exceed six months. The employment agreements with senior executives may also include provisions regarding right for the senior executive to receive customary compensation for non-compete undertakings following the termination of the employment.

The board of directors shall be entitled to deviate from these guidelines in individual cases if there are special reasons for doing so.

 

Incentive programs

Employee option programme 1

At an extraordinary general meeting held on 26 April 2018, it was resolved to implement an employee option program comprised by a maximum of 550,369 employee options. The employee options were allotted free of charge to the Chief Executive Officer, Chief Operating Officer and the company’s former Chief Medical Officer. The allotted employee options vested with 50 percent on the allotment and with 25 per cent on 31 October 2018 and the remaining 25 percent of the employee options will vest on 31 October 2019. The company’s former Chief Medical Officer left the company in the summer of 2018, after which the maximum number of employee options that can be vested was reduced to 481,600.

Each vested employee option entitles a right to acquire one new share in the company against cash consideration at a subscription price of SEK 8 per share. The subscription price and the number of shares that each warrant entitles right to are subject to customary recalculation provisions in connection with a new share issue etc. Vested employee options can be utilized at the earliest in connection with: (i) after an initial public offering and listing of the company’s shares on a regulated market or a multilateral trading facility; (ii) a firm offer from a third party to acquire at least 90 percent of the shares in the company; (iii) a sale of all or substantially all of the company’s activities; or (iv) any other similar event that the board of directors consider shall be treated as a trade sale.

After an initial public offering of the company’s shares, vested employee options can be utilized during month 24–27 after the listing and in connection with a trade sale. Vested employee options can be utilized immediately in connection with the trade sale. Vested employee options that are not exercised in the relevant exercise windows will automatically lapse. Subject to the aforementioned, the last day to exercise allotted and vested employee options is 31 December 2025, after which all employee options will lapse.

 

Employee option programme 2

At the annual general meeting held on 23 November 2018, it was resolved to implement an employee option program comprised by a maximum of 550,369 employee options. The employee options have been allotted free of charge to the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Chief Medical Officer. The allotted employee options will vest with 25 percent on each of 31 October 2019, 31 October 2020, 31 October 2021 and 31 October 2022.

Each vested employee option entitles a right to acquire one new share in the company against cash consideration at a subscription price of SEK 22.50 per share. Vested employee options can be utilized at the earliest in connection with: (i) after an initial public offering and listing of the company’s shares on a regulated market or a multilateral trading facility; (ii) a firm offer from a third party to acquire at least 90 percent of the shares in the company; (iii) a sale of all or substantially all of the company’s activities; or (iv) any other similar event that the board of directors consider shall be treated as a trade sale.

After an initial public offering of the company’s shares, vested employee options can be utilized during the period 1 November 2022 – 31 January 2023 and in connection with a trade sale. Vested employee options can be utilized immediately in connection with the trade sale. Vested employee options that are not exercised in the relevant exercise windows will automatically lapse. Subject to the aforementioned, the last day to exercise allotted and vested employee options is 31 December 2025, after which all employee options will lapse.

In order to enable the company’s delivery of shares under the employee option program as well as to hedge ancillary costs, primarily social charges, the annual general meeting also resolved to issue a maximum of 663,796 warrants which were all subscribed for by a wholly-owned subsidiary.

 

Mangoral

Our lead candidate Mangoral is a liver imaging drug (i.e. a liver specific contrast agent) being developed for detection and localization of potential liver metastases, using Magnetic Resonance Imaging (“MRI”) in patients where use of the current gold standard gadolinium-based contrast agents (“GBCAs”) may be medically inadvisable or cannot be administered. Mangoral is currently ready for Phase III clinical development.

Oncoral

Oncoral is a novel tablet-based formulation of the well-known chemotherapeutic agent irinotecan, intended for the treatment of advanced gastric (stomach) cancer. Irinotecan is today mainly used for treating metastasized colorectal cancer. Although irinotecan is currently not approved for treating gastric cancer in the United States and in the EU, there is off-label use for this indication. Oncoral has completed Phase I studies with encouraging results and is ready for Phase II studies.

DEVELOPMENT PLAN

Ascelia has established a development program for lead candidate Mangoral, consisting of a pivotal Phase III efficacy study and two supportive studies. The clinical development strategy for Oncoral, Ascelia´s second drug candidate, is to obtain Phase II data and then to partner for the further development.