Item 2.05 Costs Associated with Exit or Disposal Activities.
On September 27, 2024, IGM Biosciences, Inc. (the “Company”) committed to a strategic pivot and pipeline transformation, pursuant to which the Company has decided to begin taking steps, including a reduction in force, to minimize its future spending on the research and clinical development of aplitabart and its other oncology candidates (the “Strategic Pivot”). The Company is undertaking the Strategic Pivot to prioritize its pipeline of T cell engagers in autoimmune diseases, including ongoing clinical development of imvotamab in rheumatoid arthritis, systemic lupus erythematosus, and myositis, while further extending cash runway. The Company will also continue to focus on the development of immunology product candidates under its collaboration with Sanofi. The Company expects that, as a result of the Strategic Pivot, the Company’s existing cash, cash equivalents and investments will be sufficient to fund its operating expenses and capital expenditure requirements into 2027.
The Company is unable to estimate in good faith the amount of all such costs and charges to be incurred as a result of the Strategic Pivot at this time, and in accordance with paragraph (d) of Item 2.05 of Form 8-K, the Company will file an amendment to this Current Report on Form 8-K once it makes a determination of such estimates or range of estimates. The Strategic Pivot activities are expected to be substantially complete in the first quarter of 2025.
A copy of the Company’s press release announcing the Strategic Pivot is attached hereto as Exhibit 99.1.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Resignation of Chief Executive Officer, President and Director
In connection with the Strategic Pivot, Fred Schwarzer resigned as Chief Executive Officer, President and a member of the board of directors (the “Board”) of the Company, effective as of September 30, 2024 (the “Effective Date”). Mr. Schwarzer confirmed that his resignation from the Board was not the result of any disagreement with or about the Company, its operations, policies or practices.
In connection with Mr. Schwarzer’s resignation, the Company and Mr. Schwarzer entered into a transition and consulting agreement on the Effective Date (the “Schwarzer Consulting Agreement”). Among other things, the Schwarzer Consulting Agreement provides that:
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As of October 1, 2024, Mr. Schwarzer will transition to a consulting role and provide consulting services to the Company through the second anniversary of the Effective Date (the “Schwarzer Scheduled Completion Date,” the actual final day of such consultancy, the “Schwarzer Completion Date,” and the period from the Effective Date through the Schwarzer Completion Date, the “Schwarzer Consulting Period”). |
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Through the Schwarzer Scheduled Completion Date, Mr. Schwarzer will be paid $28,030 for each one-month period in which he is available to provide consulting services, and he will also be paid $5,500 per month for 18 months to facilitate health care continuation coverage; provided that all such cash payments will cease if the Company terminates the Schwarzer Consulting Agreement for cause. |
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Each of Mr. Schwarzer’s outstanding equity awards that would have been eligible to vest based on service during the Schwarzer Consulting Period will continue to vest during the Schwarzer Consulting Period, subject to the terms and conditions of the Company’s Amended and Restated 2018 Omnibus Incentive Plan (the “Plan”) under which the award was granted and the applicable award agreement thereunder. On the Effective Date, the portion of each such outstanding equity award that would not have been eligible to vest based on service during the Schwarzer Consulting Period was irrevocably forfeited. |
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Mr. Schwarzer and the Company have agreed to mutual releases of claims. |
In addition, pursuant to the Schwarzer Consulting Agreement, if the Company terminates the Schwarzer Consulting Agreement without cause prior to the Schwarzer Scheduled Completion Date, any outstanding equity award held by Mr. Schwarzer will vest as to the portion of those equity awards that were otherwise scheduled to vest through the Schwarzer Scheduled Completion Date, subject to the terms and conditions of the Plan.
The foregoing summary and description of the Schwarzer Consulting Agreement does not purport to be complete and is qualified in its entirety by reference to, and should be read in conjunction with, the full text of the Schwarzer Consulting Agreement, which will be filed as an exhibit to the Company’s next quarterly report on Form 10-Q.
Announcement of New Chief Executive Officer and Director
Mary Beth Harler, M.D. has been appointed as the Company’s Chief Executive Officer, effective as of the Effective Date, and as a member of the Board (initial term ending at the annual stockholder meeting in 2025), effective as of October 1, 2024.
Dr. Harler, who is 59, joined the Company in October 2021 and previously served as the Company’s Head, Research & Autoimmunity. Before joining the Company, Dr. Harler held various roles at Bristol-Myers Squibb from 2010 to 2021, including