ACHN 2018 Proxy Statement

Defining Our Peer Group The first step in the compensation review process is the review and analysis of an appropriate peer group for the Company. In 2016, Radford assessed the competitive pay position of the Company’s executives, employees and directors. As part of this assessment, Radford recommended, and the Compensation Committee approved, a peer group of publicly traded companies to benchmark competitive pay levels and compensation practices. Peer group companies were those which: • were in a similar industry; • were at a similar stage of product development; • have market capitalizations ranging from $500.0 million to $3.5 billion; and • have 50 to 400 employees. The 2016 peer group was used by the Compensation Committee in determining 2017 base salaries, bonuses and stock option awards. This 2016 peer group consisted of the following companies: Acceleron Pharma Inc. FibroGen, Inc. MacroGenics, Inc. Aduro BioTech, Inc. Inovio Pharmaceuticals, Inc. Novavax, Inc. Agios Pharmaceuticals, Inc. Insmed Incorporated Spark Therapeutics, Inc. Alder BioPharmaceuticals Inc. Intra-Cellular Therapies, Inc. Ultragenyx Pharmaceutical Inc. bluebird bio, Inc. Juno Therapeutics, Inc. Xencor, Inc. Epizyme, Inc. Kite Pharma, Inc. ZIOPHARM Oncology, Inc. As a part of the 2017 annual executive compensation assessment, in September 2017, after discussions with the Compensation Committee, Radford recommended, and the Compensation Committee approved, a revised peer group of publicly traded companies defined by the following criteria: • in a similar industry; • at a similar stage of product development; • have market capitalizations ranging from $125.0 million to $2.0 billion; and • have 30 to 260 employees. The changes in the 2017 peer group as compared with the 2016 peer group were primarily the result of removing seven companies (Agios Pharmaceuticals, Inc., bluebird bio, Inc, FibroGen, Inc, Juno Therapeutics, Inc., Kite Pharma, Inc., Spark Therapeutics, Inc. and Ultragenyx Pharmaceutical Inc.) that no longer met the criteria listed above as to headcount and market capitalization value and adding seven companies (Atara Biotherapeutics, Inc., Calithera Biosciences, Inc., Celldex Therapeutics, Inc., Cytokinetics, Incorporated, Karyopharm Therapeutics Inc., New Link Genetics Corporation and Sangamo Therapeutics, Inc.) that met the peer group criteria. The new peer group consists of the following companies: Acceleron Pharma Inc. Cytokinetics, Incorporated MacroGenics, Inc. Aduro BioTech, Inc. Epizyme, Inc. NewLink Genetics Corporation Alder BioPharmaceuticals, Inc. Inovio Pharmaceuticals, Inc. Novavax, Inc. Atara Biotherapeutics, Inc. Insmed Incorporated Sangamo Therapeutics, Inc. Calithera Biosciences, Inc. Intra-Cellular Therapies, Inc. Xencor, Inc. Celldex Therapeutics, Inc. Karyopharm Therapeutics Inc. ZIOPHARM Oncology, Inc. 36