Maryland biotech Novavax has seen its reputation soar in recent weeks with a major U.S. investment in its early-stage COVID-19 vaccine hopeful. For Novavax's leadership, a step into phase 2 testing would mean a $100 million-plus payout at the company's current pumped-up share price.
Four Novavax executives, including CEO Stanley Erck, will earn a windfall in stock options if the biotech's COVID-19 vaccine candidate simply enters phase 2 human testing by April 2021, according to a proxy filing. With a midstage test potentially on tap within weeks, the company's well on track to beat that goal.
As part of a revised incentive plan floated in April, Erck, Chief Business Officer John Trizzino, R&D head Gregory Glenn and chief legal officer John Herrmann would score a total of 830,000 stock options if the shot reaches phase 2. There's no stipulation that the vaccine ever has to receive approval—or even enter phase 3 trials—for that jackpot to hit.
At Thursday's opening share price of $146.05, those options would equate to roughly $105 million in value divided among the four executives. Novavax is expecting a readout of phase 1 human testing data by the end of this month and could immediately enter a phase 2 trial, the company said.
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Of those four, Erck would stand to gain the most from a successful phase 1 with 400,000 options due to him alone. Glenn would collect 165,000 options, Trizzino would take 140,000 and Herrmann 125,000. The options would vest 50% on the first anniversary of the start of phase 2 with the additional 50% vesting on the second anniversary.
With those options vesting down the road—and Novavax's share price depending on how the shot performs in phase 2, phase 3 and beyond—the eventual value of the payout isn't yet clear. But whatever happens, the executives now have a very personal stake in what happens to their vaccine project over the next few weeks.
The possible payday for Novavax's C-suite comes as the once-troubled vaccine maker's reputation has soared in its quest for a COVID-19 shot.