On March 16, 2020 (the “Effective Date”), Jeff J. Ludwig joined Puma Biotechnology, Inc. (the “Company”) as its Chief Commercial Officer. Prior to joining the Company, Mr. Ludwig, age 54, worked as the Vice President Oncology Sales for Astellas Pharma Inc. (“Astellas”), a multinational pharmaceutical company based in Japan, from September 2019 until March 2020, where he led multiple sales teams across several oncology therapeutic products, a significant label expansion in prostate cancer and a brand new launch in bladder cancer. Prior to joining Astellas, Mr. Ludwig worked at Amgen Inc. (“Amgen”), a multinational biopharmaceutical company based in California, from April 2001 until August 2019, where he most recently held the position of Vice President Oncology Sales from January 2014 to August 2019. During his tenure as Vice President of Oncology Sales, he led the sales organization through numerous successful launches and contributed to a multi-billion dollar portfolio of therapeutic and supportive care products. Before assuming the Vice President of Oncology Sales role, he successfully held various other leadership positions in both oncology sales and marketing. Prior to joining Amgen, Mr. Ludwig worked in various sales and marketing roles at Eli Lilly and Company from 1988 until 2001. Mr. Ludwig holds a B.S. in business from Arizona State University where he graduated with honors.
Pursuant to the terms of a letter agreement between the Company and Mr. Ludwig, Mr. Ludwig will serve as the Company’s Chief Commercial Officer on an at-will basis. The letter agreement provides that Mr. Ludwig will receive an annual base salary of $550,000 per year and will be eligible for an annual discretionary cash bonus with a target of 40% of his base salary. Mr. Ludwig will also receive a signing bonus equal to $725,000 in connection with the commencement of his employment.
If Mr. Ludwig’s employment is terminated by the Company for “cause” (as defined in the letter agreement), or by Mr. Ludwig for any reason, in either case before the third anniversary of the Effective Date, Mr. Ludwig will be required to repay a portion of the signing bonus, as set forth in the following table:
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Employment Termination Date
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Repaid Portion of Signing
Bonus
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Prior to or on the first anniversary of Effective Date
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100
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%
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Following the first anniversary of Effective Date, but prior to or on the second anniversary of Commencement Date
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67
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%
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Following the second anniversary of Effective Date, but prior to or on the third anniversary of Commencement Date
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33
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%
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The letter agreement further provides for Mr. Ludwig to receive an option to purchase 320,000 shares of the Company’s common stock, which will vest as to 1/3 of the shares underlying the option on the first anniversary of the Effective Date and as to 1/36 of the shares underlying the option on each monthly anniversary thereafter, subject to Mr. Ludwig’s continued employment. Additionally, Mr. Ludwig will be eligible to participate in the Company’s benefit plans.
Additionally, Mr. Ludwig will be eligible to receive additional equity awards based on the achievement of certain milestones tied to annual U.S. Nerlynx sales levels, subject to Mr. Ludwig’s continued employment through the applicable grant date and subject to approval by the Company’s board of directors.
In the event Mr. Ludwig’s employment is terminated by the Company without cause or by Mr. Ludwig for “good reason” (as defined in the letter agreement), he will be entitled to receive the following:
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an amount equal to his then-current base salary and target bonus;
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up to 12 months continuation of healthcare benefits to him and his dependents; and
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in the event such termination occurs on or within 18 months following a change in control of the Company, full vesting of all then-outstanding and unvested Company equity awards.
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All severance payments and benefits are contingent upon Mr. Ludwig’s execution and non-revocation of a general release of claims in favor of the Company.
The letter agreement contains customary confidentiality and assignment of inventions provisions that survive the termination of the letter agreement for an indefinite period, as well as a non-solicitation provision extending until one year after his termination of employment with the Company.
There are no arrangements or understandings between Mr. Ludwig and any other person pursuant to which he was selected as an officer, nor are there any transactions in which Mr. Ludwig has an interest that would be reportable under Item 404(a) of Regulation S-K.
In accordance with the Company’s customary practice, the Company is entering into its standard form of indemnification agreement with Mr. Ludwig, which will require the Company to indemnify him against certain liabilities that may arise as a result of his status or service as an officer. The description of Mr. Ludwig’s indemnification agreement is qualified in its entirety by the full text of the form of indemnification agreement, which is attached as Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.