Patrick J. Heron
About Patrick J. Heron
Patrick J. Heron, age 54, is a Class III director of Arcutis Biotherapeutics (ARQT) who has served on the board since 2016 and was Chairman from December 2019 until November 4, 2024, when Keith Leonard succeeded him; Heron remains an independent director and Compensation Committee member . He is Managing General Partner at Frazier Life Sciences (since 1999) and holds a B.A. in Political Science from the University of North Carolina at Chapel Hill and an M.B.A. from Harvard Business School .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Frazier Life Sciences | Managing General Partner | 1999–present | Led formations/initial investments (e.g., Marcadia, Calixa, VentiRx); led MedPointe involvement |
| McKinsey & Company (West Coast) | Biotech consulting | Pre-1999 | Helped develop biotech consulting practice |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Mirum Pharmaceuticals, Inc. | Director | 2018–2025 | Public company directorship |
| HilleVax, Inc. | Director | 2018–2025 | Public company directorship |
| Vaxcyte, Inc. | Director | 2017–2021 | Public company directorship (prior) |
| Passage Bio, Inc. | Director | 2018–2021 | Public company directorship (prior) |
| Iterum Therapeutics plc | Director | 2014–2022 | Public company directorship (prior) |
| Imago Biosciences, Inc. | Director | 2014–2022 | Public company directorship (prior) |
| Alpha-9 Theranostics, Inc.; Alceptor Therapeutics, Inc.; MBX Biosciences, Inc.; ScoutBio, Inc.; SanRemo Therapeutics Holdings Ltd. | Director (private/public over time) | Mainly 2020–2025 | Multiple board roles (mix of private) |
Board Governance
- Independence: Board determined eight of nine directors, including Heron, are independent under Nasdaq standards .
- Committees: Compensation Committee member; not Audit or Nominating/Governance .
- Chair role: Served as Board Chair until November 4, 2024; now independent director; Keith Leonard is Chair .
- Attendance: Board met five times in 2024; all directors (including Heron) attended 100% of Board/committee meetings; in 2023, each director attended ≥86% .
- Executive sessions: Independent directors meet in regularly scheduled executive sessions .
- ESG oversight: Nominating & Corporate Governance Committee oversees ESG; Board receives annual ESG reports .
Fixed Compensation
Program structure for non-employee directors:
| Component | Amount |
|---|---|
| Base annual retainer | $50,000 |
| Board Chair retainer | $35,000 |
| Audit Chair retainer | $20,000 |
| Compensation Chair retainer | $15,000 |
| Nominating/Gov Chair retainer | $10,000 |
| Audit Committee member | $10,000 |
| Compensation Committee member | $7,500 |
| Nominating/Gov Committee member | $5,000 |
Heron’s realized cash fees (time-series):
| Metric | 2023 | 2024 |
|---|---|---|
| Fees Earned or Paid in Cash ($) | $88,333 | $86,984 |
| Notes | Paid to Frazier Healthcare Partners on behalf of Heron | Paid to Frazier Healthcare Partners on behalf of Heron |
Performance Compensation
Annual equity for non-employee directors:
- Initial Director Grant: Stock options with grant-date fair value $500,000 (new directors) .
- Annual Director Grant: $250,000 split into options ($162,500) and RSUs ($87,500); vesting through next annual meeting/first anniversary; full vest on change-of-control .
Heron’s equity compensation (grant-date fair values):
| Metric | 2023 | 2024 |
|---|---|---|
| Option Awards ($) | $60,047 (company used $20 stock price floor for 2023 annual grants; resulted in lower grant values) | $162,500 |
| Stock Awards (RSUs) ($) | $32,856 (lower due to 2023 floor) | $87,500 |
| RSU Deferral Election | Elected to defer 2023 RSUs (convertible upon separation or specified date) | Deferred 2023 RSUs outstanding as of 12/31/2024 (4,375 units) |
Vesting and schedules:
- Annual options: exercise price at grant date closing price; vest over time per program .
- Annual RSUs: vest at next annual meeting/first anniversary; deferrable; fully accelerate on change-of-control .
Other Directorships & Interlocks
- Venture affiliation: Managing General Partner of Frazier Life Sciences; Frazier Life Sciences VIII, L.P. owns 7.4% of ARQT common stock .
- Investor rights: Amended and restated investors’ rights agreement remains in effect for certain holders (including entities affiliated with directors) from pre-IPO preferred stock .
- Follow-on participation: Frazier Life Sciences VIII purchased 21,052 ARQT shares at $9.50 in March 2024 follow-on, same terms as others and without preexisting rights .
Expertise & Qualifications
- Investing/operator experience in life sciences; founding/formations; capital allocation .
- Dermatology sector familiarity through ARQT board service .
- Board leadership (former Chair), Compensation Committee governance .
Equity Ownership
| Component | Shares |
|---|---|
| Common stock held of record by Heron | 4,312 |
| Options exercisable within 60 days | 27,052 |
| RSUs vesting within 60 days | 10,139 (deferred from 2023 grant counted as vesting schedule) |
| Frazier Life Sciences VIII, L.P. | 8,785,284 |
| Total beneficial ownership | 8,831,162 (7.4% of outstanding shares) |
| Shares outstanding reference | 119,199,222 (as of April 15, 2025) |
Pledging/hedging policy:
- Company prohibits hedging and pledging absent compliance officer approval; applies to directors .
Section 16 compliance:
| Year | Note |
|---|---|
| 2024 | All directors/officers complied; one Form 4 correction (Watanabe); no Heron delinquency noted |
| 2025 | All complied; one late Form 4 (Topper); no Heron delinquency noted |
Governance Assessment
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Alignment: Strong ownership via Frazier (7.4% beneficial) signals engagement; RSU deferral indicates long-term horizon .
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Independence and attendance: Independent under Nasdaq; 100% attendance in 2024; active Compensation Committee membership .
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Compensation structure: Cash fees modest; equity annualized and time-vested; 2023 used a $20 floor that reduced grant fair values, shareholder-friendly amid depressed price .
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Related-party exposure: Frazier’s material stake and follow-on purchase are disclosed and conducted on equal terms; investor rights agreement persists; Audit Committee oversees related-party transactions via formal policy .
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RED FLAGS:
- Significant affiliated ownership/control with Frazier (Heron as GP) may present perceived conflicts; mitigated by independence determination and related-party review processes .
- 2024 say-on-pay approval ~68% reflects shareholder sensitivity to broader compensation practices (option exchange for employees/NEOs), not director pay specifically; management engaged major holders and received support for the exchange as a one-time event .
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Positive signals:
- Clear clawback policy aligned with SEC/Nasdaq; stock ownership guidelines for directors; hedging/pledging prohibitions .
- Compensation Committee uses independent consultant (Pay Governance) and evaluates director pay against peers; committee comprised entirely of independent directors .
This profile should help assess board effectiveness, alignment, and potential conflicts associated with Patrick J. Heron’s role at ARQT.