Paul Varki
About Paul Varki
Paul Varki is Chief Legal Officer at Avalo Therapeutics (AVTX), appointed June 24, 2024; age 52 at appointment. He brings 20+ years of pharmaceutical legal experience including senior roles at Idorsia US, Amarin, Braeburn, Egalet, GlaxoSmithKline, Reed Smith (FDA law), and FDA CDER; he holds a J.D. (Temple), M.P.H. (GWU), and B.A. (William & Mary) . Company performance context: Avalo’s revenues fell from $18.1m (FY22) to $0.44m (FY24), and EBITDA remained negative; the company reported net loss of $35.1m in 2024 and disclosed a Pay-versus-Performance TSR outcome where a hypothetical $100 investment measured from 12/31/2021 was $0 by 12/31/2024 [Values retrieved from S&P Global]. His mandate came “following our acquisition and private placement” to enhance legal risk management and value protection as AVTX advances AVTX-009 in hidradenitis suppurativa and other inflammatory indications .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Avalo Therapeutics | Chief Legal Officer | Jun 24, 2024 – present | Hired post-acquisition/financing to strengthen strategic legal capabilities as AVTX-009 advances |
| Idorsia Pharmaceuticals US Inc. | General Counsel, VP, Head of Legal U.S. | Jul 2020 – Jun 2024 | Led US legal through commercialization stage; big-pharma-grade compliance |
| Amarin Corporation plc | Vice President, Legal | Nov 2018 – Jul 2020 | Cardiovascular-focused legal leadership |
| Braeburn Pharmaceuticals | SVP, General Counsel, CCO, Corporate Secretary | Sep 2017 – Nov 2018 | Led legal and compliance in specialty pharma |
| Egalet Pharmaceuticals | SVP, General Counsel, CCO, Corporate Secretary | Nov 2015 – Aug 2017 | Led legal/compliance during lifecycle and financing events |
| GlaxoSmithKline | Counsel → Assistant General Counsel (US Pharma; Global Vaccines/Biologics; Global R&D) | Jan 2004 – Nov 2015 | Broad R&D, vaccines/biologics, US pharma legal leadership |
| Reed Smith LLP | FDA Regulatory Lawyer | n/d | FDA-focused private practice |
| FDA CDER | Regulatory Counsel | n/d | Direct regulatory policy/approval exposure |
External Roles
No public company directorships disclosed for Varki in the filings reviewed; he is not a director of Avalo .
Fixed Compensation
| Component | Terms |
|---|---|
| Base salary | $465,000 per year |
| Target annual bonus | Up to 40% of base salary; discretionary based on Company goals; may be paid in cash or immediately vested equity if mutually agreed |
| Sign-on cash | $50,000; repayable if terminated for Cause or if he resigns other than for Good Reason within 12 months |
Performance Compensation
Annual Bonus Framework
| Metric | Weighting | Target | Actual | Payout Form | Timing/Vesting |
|---|---|---|---|---|---|
| Discretionary annual bonus based on Company goals (Comp Committee determination) | Not disclosed | 40% of base salary | Not disclosed | Cash or immediately vested equity if mutually agreed | Paid when annual bonuses paid to executives; requires employment on payment date |
Equity Awards (Options/RSUs)
| Grant Date | Award Type | Shares/Units | Exercise Price | Vesting Schedule | Notes |
|---|---|---|---|---|---|
| Jun 24, 2024 | Non-qualified stock option (inducement) | 150,000 | Equal to closing price on Nasdaq on grant date (numeric not disclosed) | 25% on first anniversary (Jun 24, 2025), then monthly over 36 months, subject to continued employment | Inducement grant under Nasdaq 5635(c)(4) |
First vesting tranche expected Jun 24, 2025 (37,500 options), subject to service .
Equity Ownership & Alignment
| As-of Date | Beneficial Ownership (Shares) | % of Outstanding | Notes |
|---|---|---|---|
| Mar 7, 2025 | — | <1% | Not listed among beneficial owners; no exercisable equity within 60 days as of this date |
| Apr 22, 2025 | — | <1% | Not listed among beneficial owners; options unexercisable within 60 days |
- Insider Trading Policy strongly discourages short sales, options trading/hedging, margin accounts, or other speculative transactions by officers/directors, reducing hedging/pledging risk signals .
- No related-party transactions disclosed for Varki and no Item 404(a) transactions upon appointment .
Employment Terms
Severance and Change-in-Control (CIC)
| Scenario | Cash Severance | Bonus Treatment | Equity Treatment | Healthcare | Other |
|---|---|---|---|---|---|
| Termination without Cause or resignation for Good Reason | 9 months of base salary | Prior year earned but unpaid bonus; pro-rated current-year bonus based on Company goals | Full vesting of outstanding options; 6-month post-termination exercise window | Company-paid COBRA up to 12 months (earlier of 12 months, COBRA expiration, or eligibility for equivalent coverage) | Release required; ongoing restrictive covenants |
| CIC termination (at or within 6 months post-CIC): without Cause or for Good Reason | 12 months of base salary | Prior year earned but unpaid bonus; 100% of annual bonus for year of termination | Full vesting of options; 6-month exercise window | Company-paid COBRA up to 12 months (same conditions) | Release required |
Restrictive Covenants and Other Provisions
- Non-compete: 12 months post-employment; “Restricted Territory” includes the United States .
- Non-solicitation (customers/employees): 12 months post-employment .
- Confidentiality, inventions assignment, non-disparagement, cooperation obligations; equitable relief and severance clawback if covenants are violated .
- Governing law/venue: Delaware; at-will with no fixed term .
Company Performance Context
| Metric (USD) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues | $18.051m | $1.924m | $0.441m |
| EBITDA | -$29.774m* | -$23.286m* | -$40.702m* |
Values retrieved from S&P Global.
| Pay vs Performance Items | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Value of $100 Investment (TSR) | $25 | $0 | $0 |
| Net Loss (thousands) | $(41,658) | $(31,544) | $(35,129) |
Investment Implications
- Incentive alignment and retention: Varki’s package is cash-light and equity-heavy (150,000 inducement options with four-year vesting, 25% cliff), creating a retention lock until June 24, 2025 and staggered monthly vesting thereafter; watch for potential liquidity around first-vest windows and open trading windows for insider selling pressure signals (monitor Form 4s) .
- Downside/cost control risk: Legal leadership was added amid revenue compression and continuing losses; his mandate emphasizes risk mitigation and value protection through development and financing cycles, which is strategically relevant to AVTX-009’s regulatory and partnering path .
- Change-in-control economics: Protections (12 months salary, full option vesting, 100% current-year bonus, COBRA) could signal a readiness for strategic alternatives but are within small-cap biotech norms; single-trigger equity acceleration is conditioned on termination in the CIC window (effectively double-trigger) .
- Governance and trading risk controls: Strong discouragement of hedging/derivatives under the Insider Trading Policy reduces misalignment/pledging concerns, though no explicit executive ownership guidelines were disclosed; his beneficial ownership was not reportable as of Mar–Apr 2025 (pre-vesting), limiting immediate “skin-in-the-game” but ramping via vesting .