Jay Luly
ENANTA PHARMACEUTICALSAbout Jay Luly
Jay R. Luly, Ph.D., age 68, has been ENTA’s President & CEO and a director since July 2003; he holds a B.S. from the University of Illinois at Urbana-Champaign and a Ph.D. in synthetic organic chemistry from UC Berkeley . Under his tenure, ENTA’s FY2025 revenue was $65.3M with a net loss of $81.9M; cash, cash equivalents and marketable securities were $188.9M at fiscal year-end, supported by HCV royalties and a $74.8M equity raise in Oct-2025 . TSR has been volatile; the company’s cumulative value of an initial $100 investment was 23 in FY2024 versus 112 for the Nasdaq Biotech Index, and ENTA reported net losses in FY2021–FY2024 per pay-versus-performance disclosures .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Oxford Bioscience Partners | Entrepreneur in Residence | Mar 2002–Jul 2003 | Transition role prior to ENTA CEO; supported deal flow and incubation |
| Millennium Pharmaceuticals | SVP, R&D Operations; SVP, Discovery Strategy & Operations | to Mar 2002 (post-LeukoSite merger) | Integrated discovery operations following merger; led program execution |
| LeukoSite, Inc. | SVP, Drug Discovery & Preclinical Development | Not disclosed | Built discovery pipeline that later merged into Millennium |
| Abbott Laboratories | Senior drug discovery positions | 1983–1997 | Advanced multiple programs; foundation in small-molecule discovery |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| None disclosed | — | — | No current public company directorships disclosed for Luly |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $725,050 | $755,375 | $779,875 |
| Target Bonus % of Salary | 65% | 70% | 70% |
| Non-Equity Incentive Paid ($) | $483,032 | $475,886 | $429,455 |
| All Other Compensation ($) | $19,424 | $20,598 | $22,098 |
| Total Compensation ($) | $7,272,656 | $7,856,698 | $2,695,276 |
Notes:
- Non-equity incentive is a prorated blend across calendar years aligned to ENTA’s bonus plan .
Performance Compensation
Annual Equity Awards (Grant Structure and Sizing)
| Award Type | FY 2023 (granted Nov/Dec 2022) | FY 2024 (granted Nov/Dec 2023; Jan 2024 one-time) |
|---|---|---|
| Stock Options (shares; strike; vest) | 134,000 @ $45.00; quarterly vest over 4 years | 264,000 @ $8.99; quarterly vest over 4 years |
| RSUs (time-based, shares) | 63,000; annual vest over 4 years | None to NEOs in FY2024 |
| PSUs (target shares; performance period) | 17,000 target; 2-year period ending Dec 31, 2024 | 16,000 target; 2-year period ending Dec 31, 2025 |
| rTSRUs (target shares; measurement window) | 17,000 target; 60-day windows ending Dec 31, 2022 vs Dec 31, 2024 | 8,000 target; 60-day windows ending Dec 31, 2023 vs Dec 31, 2025 |
| One-time PSUs (vested) | — | 675 PSUs granted and deemed vested in Jan 2024 (settled Feb 2024) |
Valuation snapshots (grant-date fair value):
- FY2023 options $3,084,399; RSUs $2,835,000; rTSRUs $685,440 .
- FY2024 options $1,297,481; rTSRUs $158,240; one-time PSUs $8,127 .
Vesting mechanics:
- Options: 10-year term; 1/16 quarterly vest over 4 years .
- PSUs: milestone-based across clinical, research, and external value drivers; 0–150% payout; settle in Feb following period end .
- rTSRUs: 0–150% payout based on percentile rank vs Nasdaq Biotechnology Index; measurement via 60-day averages; settle in Feb post period .
Annual Performance Outcomes (Company and Award Payouts)
| Measure | 2022–2021 | 2023–2022 | 2024–2023 |
|---|---|---|---|
| Corporate Performance Rating (%) | Not disclosed | 90% | 75% |
| PSU Payout (% of Target) | 100% | 70% | 150% (clinical and research milestones achieved) |
| rTSRU Payout (% of Target) | 127% | 0% | 0% (negative TSR) |
| Combined (% of Target) | 114% | 35% | 75% |
Equity Ownership & Alignment
| Item | As of Dec 16, 2024 |
|---|---|
| Total Beneficial Ownership (shares) | 1,593,363 |
| Ownership % of Outstanding | 7.19% (based on 21,332,544 shares outstanding) |
| Breakdown | 763,713 common shares; 829,650 options exercisable within 60 days |
| Shares Pledged/Hedged | Prohibited by policy (no hedging or pledging) |
| Clawback Policy | Adopted; covers cash and equity incentive compensation for 3 fiscal years preceding a restatement (effective Oct 2, 2023) |
| Ownership Guidelines | Not disclosed in proxy materials |
Insider activity indicators:
- FY2023: 72,412 options exercised; value realized $2,025,521; 65,146 shares from stock awards vested; realized $3,327,612 .
- FY2024: No option exercises reported for Luly; 34,200 shares from stock awards vested; realized $354,956 .
Employment Terms
| Scenario (CEO) | Cash Severance | Bonus Component | Benefits Continuation | Equity Treatment |
|---|---|---|---|---|
| Termination without cause or for good reason (no change in control) | 12 months base salary | 100% of target bonus | Up to 12 months | No acceleration |
| Termination within 12 months after change in control (double trigger) | 18 months base salary (higher of then-current or pre-CoC base) | 150% of target bonus | Up to 18 months | All unvested options/RSUs vest; PSUs vest at target |
Board Governance (Director Service)
- Board service: Director since 2003; not independent; ENTA maintains a separated non-executive Chairman (Dr. Bruce L. A. Carter) to preserve role independence .
- Committees: Luly is not a member of the Audit, Compensation, or Nominating & Corporate Governance Committees; chairs are Foletta (Audit), Peterson (Compensation), Vance (Nominating) .
- Board activity: 11 meetings and 4 executive sessions in 2024; all directors attended ≥75% of meetings; annual meeting attendance policy in place .
- Director compensation: Employee directors receive no separate director compensation (Luly receives none) .
Director Compensation (For reference)
- Non-employee director annual cash retainer $50,000; Chairman additional $35,000; committee chair/member fees: Audit $20,000/$10,000, Compensation $15,000/$7,500, Nominating $10,000/$5,000; annual option grant 15,700 shares vesting monthly until next annual meeting .
Company Performance (Context for Pay-for-Performance)
| Metric | FY 2024 | FY 2025 |
|---|---|---|
| Revenue ($M) | $67.6 | $65.3 |
| Net Loss ($M) | $(116.0) | $(81.9) |
| Cash & Securities ($M) | $248.2 cash reserves at 9/30/2024 (proxy context) | $188.9 at 9/30/2025; plus $74.8 gross offering proceeds (Oct 2025) |
| TSR ($100 initial investment) | Company: 23; NBI: 112 | Not provided in proxy tables |
Compensation Peer Group (Benchmarking)
- FY2025 peer group focus: annual revenue ≤$200M; market cap $100M–$1B; R&D $50M–$450M; additions included Allogene, Altimmune, Editas, Inovio, Nektar, Puma, Rigel, SAGE, Sutro; removals included Agios, Allovir, BioCryst, FibroGen, Ligand, Supernus, Xencor; Deciphera and Intercept acquired .
- Committee targets: historically at the 50th percentile for base, target cash, and equity; in Nov 2023 the option Black-Scholes target was reduced to ~40th percentile with performance units used to reach the 50th percentile .
Say-on-Pay & Shareholder Feedback
| Year | Approval % |
|---|---|
| 2023 | ~92% approval |
| 2024 | ~79% approval; modest equity awards approved for FY2025 in response |
Compensation Structure Analysis
- Shift to options-only time-based awards for NEOs in FY2024; RSUs were used in prior years but none awarded to NEOs in FY2024, reflecting depressed share price and focus on option leverage .
- Performance awards (PSUs and rTSRUs) sized at 20% of equity value, with combined options + performance units intended to reach the 50th percentile; PSU payout reached 150% for the 2024–2023 period, while rTSRU payout was 0% amid negative TSR .
- Retention pressure: 100% of outstanding options were out-of-the-money at Dec 31, 2024 (68% by more than 500%), prompting adjustments to award mix and seeking additional share reserve .
Risk Indicators & Red Flags
- Out-of-the-money options across the company, including executive grants, heighten retention risk .
- Patent litigation: ENTA filed a UPC patent infringement action against Pfizer regarding Paxlovid, introducing litigation uncertainty and legal expense variability .
- Policies: prohibitions on hedging and pledging; clawback in place; no option repricing without shareholder approval—all supportive of governance quality .
Investment Implications
- Alignment: Luly’s sizable beneficial stake (7.19% including exercisable options) aligns incentives with shareholders; ENTA’s prohibition on hedging/pledging and the clawback policy further support alignment .
- Retention and pay-for-performance: With options deeply out-of-the-money in FY2024, ENTA leaned on performance units and adjusted award sizing, which improved PSU outcomes but left market-based rTSRU payouts at 0%—investors should monitor dilution requests and future equity mix and TSR hurdles .
- Change-of-control economics: CEO’s double-trigger package (18 months salary, 150% target bonus, full time-based vesting and PSUs at target) is moderate for biotech; investors should consider potential transaction scenarios given pipeline progress and cash runway into FY2029 .
- Execution risk: Clinical progress in RSV and immunology (STAT6 and KIT programs) is positive, but revenue remains royalty-dependent and TSR underperformed peers; sustained value creation hinges on advancing Phase 3-enabling RSV and INDs for immunology assets .