Ryan Watts
Denali TherapeuticsAbout Ryan Watts
Ryan J. Watts, Ph.D., 49, is co‑founder, President and Chief Executive Officer of Denali Therapeutics (since Aug 2015) and a director (since Mar 2015). He holds a Ph.D. in biological sciences from Stanford and a B.S. in biology from the University of Utah . Pay vs. performance disclosures show 2024 Company TSR index of 116.99 versus NASDAQ Biotech index 118.20, with 2024 net loss of $422.8M; over 2020–2024, TSR trended from 480.83 (2020) down to 116.99 (2024) as the company invested heavily to advance its pipeline . The board separates Chair and CEO roles; Watts is not independent under Nasdaq rules, and the board remains majority independent .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Genentech | Director, Department of Neuroscience | 2013–Feb 2015 | Led neuroscience; advanced blood‑brain barrier (BBB) capabilities . |
| Genentech | Leader, BBB team | 2009–2015 | Built BBB platform experience foundational to Denali’s TV platform . |
| Genentech | Various research and leadership roles | 2004–2015 | Broad drug discovery and development leadership . |
| Denali Therapeutics | Co‑founder | 2015–present | Co‑founded company and leads strategy/execution . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Rippl Care (private) | Director | Current | Healthcare company board role . |
| Peel Therapeutics (private) | Director | Current | Biopharma company board role . |
| Stanford University | Adjunct Professor, Chemical & Systems Biology | Current | Academic appointment . |
| University of Utah | Adjunct Professor, School of Biological Sciences | Current | Academic appointment . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $645,000 | $670,000 | $690,100 |
| Annual Bonus Paid ($) | $387,000 | $462,289 | $627,969 |
- 2025 base salary effective Jan 1, 2025: $718,000; target bonus 65% of base .
Performance Compensation
- 2024 annual bonus mechanics and outcome:
- Corporate goal achievement: 5/6 high‑impact (83%) and 15/17 other objectives (88%); pool funded at 140% of target .
- CEO bonus parameters and payout for 2024:
- Base salary $690,000; target bonus 65%; funding 140%; earned award $627,969 .
| 2024 Bonus Detail | Value |
|---|---|
| Base Salary | $690,000 |
| Target Bonus % | 65% |
| Funding % | 140% |
| Bonus Paid | $627,969 |
| Performance Metrics | Program and cross‑functional corporate goals (weights not disclosed) |
- 2024 equity grants (time‑based):
- Vesting: Options vest 25% at 1‑year then monthly; RSUs vest 25% annually over 4 years .
| 2024 Equity Grant (Jan 3, 2024) | Shares/Terms | Grant Date FV ($) | Exercise Price | Expiration | Vesting |
|---|---|---|---|---|---|
| Stock Options | 268,560 | $3,405,851 | $20.33 | 01/03/2034 | 25% at 1‑yr then monthly |
| RSUs | 89,520 | $1,819,942 | — | — | 25% annually over 4 yrs |
- Option exercises and vesting activity in 2024:
| 2024 Activity | Quantity | Value |
|---|---|---|
| Options exercised | 40,000 | $1,080,276 (realized value) |
| RSUs vested | 75,757 | $1,507,781 (value at vest) |
- Long‑term equity mix trend: CEO grant date fair value declined from 2022 ($8.24M options+RSUs) to 2023 ($6.73M) to 2024 ($5.23M), indicating reduced equity grant quantum amid evolving market and company profile .
Equity Ownership & Alignment
- Beneficial ownership as of March 31, 2025:
| Category | Shares | % of Outstanding |
|---|---|---|
| Total beneficially owned | 4,545,835 | 3.1% |
| Held by Watts Family 2015 Trust | 2,202,604 | — |
| Direct (Watts) | 253,071 | — |
| Options exercisable within 60 days | 2,090,160 | — |
- Unvested time‑based RSUs at 12/31/2024 and market value at $20.38/sh:
- 2021: 15,000 ($305,700); 2022: 31,000 ($631,780); 2023: 61,680 ($1,257,038); 2024: 89,520 ($1,824,418). Total RSU value $4,018,936 (also used in CIC severance valuation) .
- Notable performance/market option from 2015: 622,809 shares vest upon 90 consecutive trading days with closing price ≥$80 or upon a qualifying change of control at ≥$80/share (exercise price $0.68) .
- Anti‑hedging/pledging: Company policy prohibits pledging and hedging of company stock by insiders, with limited exceptions requiring approval; policy also bars trading in derivatives on company securities .
- Director stock ownership guidelines exist (3x annual cash retainer; timing to comply by Apr 16, 2026 or within five years of appointment), underscoring governance standards (applies to non‑employee directors) .
Employment Terms
- At‑will employment under confirmatory letter; as of Jan 1, 2025 base salary $718,000; target bonus 65% .
- Clawback policy adopted Nov 13, 2023 (recovers erroneously paid incentive compensation upon qualifying restatements) .
- Severance plan (double‑trigger CIC and non‑CIC protections):
| Scenario (assuming 12/31/2024 levels) | Base Salary | Target Bonus | COBRA Cash (Welfare) | RSU Accel. | Option Accel. | Total |
|---|---|---|---|---|---|---|
| Change in Control with Qualifying Termination | $1,380,000 | $897,000 | $104,589 | $4,018,936 | $13,428 | $6,413,953 |
| Termination Without Cause (no CIC) | $690,000 | $448,500 | $52,294 | — | — | $1,190,794 |
- CIC severance multiples: 200% of base salary and target bonus; 24 months COBRA cash; 100% vesting of time‑based unvested equity upon qualifying termination within 12 months post‑CIC (double trigger). Outside CIC: 12 months base, prorated target bonus, 12 months COBRA cash; no automatic equity acceleration (except limited legacy schedule mechanics) .
Board Service & Governance
- Board class/tenure: Class III; director since 2015; current term ends 2026 .
- Committees: None; CEO is not independent; board remains majority independent; separation of Chair (non‑executive) and CEO roles is company policy .
- 2024 attendance: Watts attended 100% of board and applicable meetings .
- Compensation Committee: Independent members Jay Flatley (Chair), Peter Klein, Nancy A. Thornberry; uses independent consultant Alpine Rewards for benchmarking and design .
- Say‑on‑pay approval (2024 annual meeting): 92.2% support .
Performance & Track Record
- Pipeline execution highlights under Watts:
- Initiated rolling BLA for tividenofusp alfa (DNL310) in Apr 2025; FDA accepted BLA for priority review with PDUFA Jan 5, 2026; launch readiness underway .
- Alignment on accelerated approval path for DNL126 (MPS IIIA) using CSF heparan sulfate as reasonably likely surrogate; planning Phase 3 confirmatory study .
- Continued development of BIIB122/DNL151 (LRRK2 inhibitor) with partners; Phase 2b LUMA ongoing; initiated BEACON Phase 2a with $75M third‑party funding .
- Pay vs Performance (TSR and Net Income):
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Company TSR Index (Initial $100) | 480.83 | 256.03 | 159.64 | 123.19 | 116.99 |
| Peer TSR Index (NASDAQ Biotech) | 126.42 | 126.45 | 113.65 | 118.87 | 118.20 |
| Net Income (Loss) $000s | 71,136 | (290,581) | (325,991) | (145,224) | (422,773) |
Investment Implications
- Alignment: Watts owns 3.1% of DNLI with 2.09M options currently exercisable and significant unvested RSUs, aligning long‑term incentives with shareholders; anti‑hedging/pledging policy further reinforces alignment .
- Retention and CoC economics: Robust double‑trigger CIC package (200% base and target bonus, 24 months COBRA, full time‑based equity acceleration) reduces unwanted turnover risk during strategic events; outside CIC, 12‑month salary/benefits support retention without automatic equity acceleration .
- Trading signals and supply: Scheduled RSU vesting from sizable 2021–2024 grants and monthly option vesting (from 2024 grant) can create predictable issuance and potential selling windows; 2024 saw 40,000 options exercised and 75,757 RSUs vest . A large legacy performance option (622,809 shares) vests only if the stock sustains ≥$80 for 90 consecutive trading days or upon ≥$80/share CoC consideration—creating a high‑bar, event‑linked supply overhang that will only trigger in a step‑function rerating scenario .
- Governance and pay quality: Separate Chair/CEO structure, independent compensation committee with external advisor, adoption of a Dodd‑Frank compliant clawback, and strong say‑on‑pay support (92.2%) indicate low governance risk around executive pay .
- Execution risk: 2025–2026 catalysts (tividenofusp alfa PDUFA and DNL126 regulatory path) are critical to value realization; TSR compression in 2021–2024 reflects development‑stage risk and investment cycle, but priority review and accelerated paths provide near‑term validation and potential re‑rating catalysts .
