Garo Armen
Protagenic Therapeutics, Inc.\newAbout Garo Armen
Executive Chairman and director of Protagenic Therapeutics since 2004; age 71; PhD in physical chemistry (CUNY Graduate Center); former research fellow at Brookhaven National Laboratory . Track record includes founding and leading Agenus (Chairman & CEO) and restructuring Elan (Chairman, 2002–2004) . Company pay-versus-performance disclosure shows a decline in cumulative TSR (value of a $100 investment fell to $38.10 in 2023 from $131.90 in 2022) alongside widening net losses ($5.0M loss in 2023 vs. $3.56M loss in 2022) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Agenus Inc. | Chairman & CEO; co-founder | 1994–present | Built fully-integrated immuno-oncology platform; led pipeline and partnerships (Incyte, Merck, Gilead) through executive team; ongoing leadership of public biotech . |
| Elan Corporation, plc | Chairman of the Board | 2002–2004 | Successfully restructured biopharma company during crisis period . |
| Armen Partners | Founder | Prior to 1994 | Specialized biotech/pharma investment firm; architected creation of Immunex Lederle oncology business (1993) . |
| Dean Witter Reynolds | SVP of Research | Earlier | Sell-side research leadership . |
| EF Hutton | Analyst & Investment Banker | Earlier | Early Wall Street career; capital markets experience . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Children of Armenia Fund | Founder | Since 2002 | Nonprofit revitalizing rural Armenian towns; humanitarian awards (Ellis Island Medal of Honor 2004; Sabin Humanitarian Award 2006) . |
Board Governance
- Board service history: Joined PTIX in Sept 2004; currently Executive Chairman (not independent) .
- Committee roles: Science Committee member; Clinical & Regulatory Committee member .
- Independence and dual-role implications: Not independent due to executive employment; several directors/executives have ties to Agenus (e.g., Buell, Stein, Wright), indicating potential interlocks to monitor .
- Lead Independent Director: Timothy R. Wright serves as Lead Director .
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (%) | Actual Bonus ($) | Stock Awards ($) | Option Awards ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2023 | 0 | Not disclosed | 0 | 0 | 0 | 0 |
| 2022 | 0 | Not disclosed | 0 | 0 | 0 | 0 |
No perquisites, pension/SERP, deferred compensation, or tax gross-ups disclosed for Armen in the latest proxy .
Performance Compensation
| Element | Metric | Terms | Status |
|---|---|---|---|
| Equity – Option Repricing Proposal | N/A (retention) | Board/Compensation Committee proposed repricing underwater options to closing price on Repricing Date; vesting schedules unchanged . | To be executed if approved; Armen has 512,500 “Eligible Options” for repricing (WAE $3.95) . |
| 2016 Equity Incentive Plan (general) | Multiple potential metrics | Plan permits use of TSR, revenue growth, EPS, margins, strategic objectives, etc., for performance awards . | Specific annual performance metrics/weightings for Armen not disclosed . |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 1,000,989 shares; 21% of outstanding class (as of April 1, 2024 record) . |
| Direct/common shares | 738,489 shares . |
| Options (exercisable within 60 days) | 266,667 shares at strikes $1.74, $5.00, $7.00 . |
| Options (not exercisable within 60 days) | 245,833 shares (count not exercisable within 60 days; vesting/exercise dates not detailed) . |
| Pledging | No pledging of shares disclosed . |
| Ownership guidelines | Not disclosed . |
Outstanding Equity Awards – Option Detail (as of 12/31/2023)
| Grant | Exercisable | Unexercisable | Strike | Expiration |
|---|---|---|---|---|
| 4/15/2016 grant | 125,000 | — | $5.00 | 4/15/2026 |
| 10/16/2017 grant | 62,500 | — | $7.00 | 10/16/2027 |
| 2/13/2020 grant | 75,000 | — | $7.00 | 2/13/2030 |
Option Repricing Exposure
| Holder | Total Options Eligible | % of Options Eligible | Weighted Avg Exercise ($) |
|---|---|---|---|
| Garo Armen | 512,500 | 100% | $3.95 |
Employment Terms
- Change-of-control and severance: For Armen, 100% of then-unvested options vest immediately upon (i) a qualified Change of Control, (ii) resignation for Good Reason, or (iii) involuntary termination not for Cause . Multiples of salary/bonus severance, non-compete/non-solicit terms, and garden leave not disclosed .
- Clawback: 2016 Plan awards subject to clawback/recoupment under applicable law and Company policy .
- Indemnification: Company provides comprehensive D&O indemnification agreements and maintains D&O insurance .
- Related-party arrangements: PTIX uses Agenus’ conference room at no cost (Agenus chaired by Armen) ; Armen invested $200,000 in the company’s 2019–2020 convertible note offering on same terms as other investors ; Options were issued to Armen’s son for project work (2019–2020) .
Pay vs Performance Summary
| Year | Cumulative TSR (Value of $100) | Net Income (Loss) ($) |
|---|---|---|
| 2022 | $131.90 | ($3,560,000) approx. narrative: “$3.56M loss” |
| 2023 | $38.10 | ($5,000,000) loss |
Risk Indicators & Red Flags
- Option Repricing: Board seeks shareholder approval to reprice underwater options (including Armen’s), lowering exercise prices to market; signals retention need and dilution risk if exercised .
- Reverse Split & Nasdaq Compliance: Special meeting to authorize 1-for-10 to 1-for-20 reverse split to regain $1 bid price; company under Panel-imposed compliance deadlines for bid price and stockholders’ equity (by April 28, 2025) .
- Governance Interlocks: Multiple directors/executives with Agenus affiliations; Armen not independent due to executive role; monitor independence and potential conflicts .
- Warrant Overhang: 3,896,590 potential warrant shares at $0.64 strike pending shareholder approval; although not specific to Armen, adds to potential future dilution and trading pressure .
Compensation Committee Analysis
- Composition: Independent directors Khalil Barrage (Chair), Brian Corvese, Timothy Wright .
- Use of external consultants: Not disclosed .
- Plan mechanics: 2016 Plan allows broad performance metrics, change-in-control flexibility, evergreen share increases; Board proposed amendment to permit option repricing without shareholder approval going forward (subject to current shareholder vote) .
Investment Implications
- Alignment: Armen’s 21% beneficial stake and sizable long-dated option holdings align interests, but proposed repricing could accelerate realizable equity value for insiders and contribute to dilution if options move in-the-money .
- Retention vs. Shareholder Value: Repricing is framed as retention; weigh potential morale/retention benefits against dilution and governance optics, especially alongside reverse split and Nasdaq compliance pressures .
- Change-of-Control Economics: Immediate vesting on multiple triggers increases sensitivity to strategic transactions; consider potential impact on negotiation dynamics and post-deal dilution from accelerated equity .
- Governance Quality: Dual role and interlocks warrant heightened scrutiny of committee independence and related-party oversight (Agenus office usage, family options), though policies and Audit Committee oversight are in place .
- Trading Signals: If shareholders approve warrant share issuance and option repricing, monitor subsequent exercises and potential selling pressure post-reverse split; track upcoming special/annual meeting outcomes as catalysts .