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Stock Compensation | 9 Months Ended
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Sep. 30, 2025
Share-Based Payment Arrangement [Abstract] |
Stock Compensation | Note 13. Stock Compensation We recorded $61.6 million and $187.2 million of stock compensation expense on our condensed consolidated statements of operations for the three and nine months ended September 30, 2025, respectively. We recorded $77.9 million and $194.3 million of stock compensation expense on our condensed consolidated statements of operations for the three and nine months ended September 30, 2024, respectively. Stock compensation expense included within our condensed consolidated statements of operations included research and development expense of $39.7 million, $114.1 million, $45.8 million and $117.1 million for the three and nine months ended September 30, 2025 and 2024, respectively. Stock compensation expense included within our condensed consolidated statements of operations also included selling, general and administrative expense of $21.0 million, $70.5 million, $31.5 million and $75.6 million for the three and nine months ended September 30, 2025 and 2024, respectively. Stock compensation expense included within our condensed consolidated statements of operations also included cost of product revenues of $0.9 million, $2.6 million, $0.6 million and $1.6 million respectively, for the three and nine months ended September 30, 2025 and 2024. Additionally, as described in Note 6, as part of the Escient acquisition, during the nine months ended September 30, 2024, we recognized related compensation expense of $31.5 million associated with the accelerated vesting for certain Escient stock awards in connection with the acquisition on our condensed consolidated statements of operations. We utilized the Black-Scholes valuation model for estimating the fair value of the stock compensation granted, with the following weighted-average assumptions:
| Employee Stock Options |  | Employee Stock Purchase Plan
| For the Three Months Ended |  | For the Nine Months Ended |  | For the Three Months Ended |  | For the Nine Months Ended
| September 30, |  | September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024 |  | 2025 |  | 2024 |  | 2025 |  | 2024
Average risk-free interest rates | 3.99 | % |  | 4.18 | % |  | 4.13 | % |  | 4.15 | % |  | 3.83 | % |  | 4.38 | % |  | 4.03 | % |  | 4.96 | %
Average expected life (in years) | 5.17 |  | 5.17 |  | 5.01 |  | 5.02 |  | 0.50 |  | 0.50 |  | 0.50 |  | 0.50
Volatility | 29 | % |  | 29 | % |  | 29 | % |  | 30 | % |  | 32 | % |  | 28 | % |  | 35 | % |  | 24 | %
Weighted-average fair value (in dollars) | $ | 23.58 |  |  | $ | 21.54 |  |  | $ | 23.45 |  |  | $ | 21.02 |  |  | $ | 14.72 |  |  | $ | 12.11 |  |  | $ | 14.95 |  |  | $ | 11.27 |
The risk-free interest rate is derived from the U.S. Federal Reserve rate in effect at the time of grant. The expected life calculation is based on the observed and expected time to the exercise of options by our employees based on historical exercise patterns for similar type options. Expected volatility is based on the historical volatility of our common stock over the period commensurate with the expected life of the options. A dividend yield of zero is assumed based on the fact that we have never paid cash dividends and have no present intention to pay cash dividends. Nonemployee awards are measured on the grant date by estimating the fair value of the equity instruments to be issued using the expected term, similar to our employee awards. Option activity under our 2010 Stock Plan and 2024 Inducement Plan was as follows:
| Shares Subject to Outstanding Options
| Shares |  | Weighted Average Exercise Price
Balance at December 31, 2024 | 12,777,974 |  | $ | 83.45 |
Options granted | 1,331,262 |  | $ | 71.04 |
Options exercised | (667,616) |  | $ | 71.32 |
Options cancelled | (590,480) |  | $ | 82.55 |
Balance at September 30, 2025 | 12,851,140 |  | $ | 82.83 |
Our annual stock option grants generally have a 10-year term and vest over four years, with 25% vesting after one year and the remainder vesting in 36 equal monthly installments, subject to customary retirement provisions that may accelerate the requisite service period for expense recognition purposes. RSU and PSU award activity under the 2010 Stock Plan and 2024 Inducement Plan was as follows:
| Shares Subject to Outstanding Awards
| Shares |  | Grant Date Value
Balance at December 31, 2024 | 8,656,803 |  | $ | 67.81 |
RSUs granted | 3,422,768 |  | $ | 68.71 |
PSUs granted | 873,728 |  | $ | 56.72 |
Additional PSUs earned | 32,148 |  | $ | 70.45 |
RSUs released | (2,500,344) |  | $ | 71.11 |
PSUs released | (143,776) |  | $ | 77.67 |
RSUs cancelled | (341,581) |  | $ | 67.18 |
PSUs cancelled | (124,489) |  | $ | 75.76 |
Balance at September 30, 2025 | 9,875,257 |  | $ | 66.59 |
RSUs and PSUs are granted to our employees at the share price on the date of grant. Each RSU represents the right to acquire one share of our common stock. Each RSU granted in connection with our annual equity awards will vest 25% annually over four years, while each RSU granted as outstanding merit awards or as part of retention award programs will vest in a single installment at the end of four years, subject to customary retirement provisions that may accelerate the requisite service period for expense recognition purposes. We grant PSUs with performance and/or service-based milestones with graded and/or cliff vesting over three to six years. The shares of our common stock into which each PSU may convert is subject to a multiplier based on the level at which the financial, developmental and market performance conditions are achieved over the service period. Compensation expense for PSUs with financial and developmental performance conditions is recorded over the estimated service period for each milestone when the performance conditions are deemed probable of achievement. For PSUs containing performance conditions which were not deemed probable of achievement, no stock compensation expense is recorded. Compensation expense for PSUs with market performance conditions is calculated using a Monte Carlo simulation model as of the date of grant and recorded over the requisite service period. For the three and nine months ended September 30, 2025 we recorded $2.6 million and $12.6 million, respectively, of stock compensation expense for PSUs on our condensed consolidated statements of operations. For the three and nine months ended September 30, 2024 we recorded $12.3 million and $19.2 million, respectively, of stock compensation expense for PSUs on our condensed consolidated statements of operations. The following table summarizes our shares available for grant under the 2010 Stock Plan and 2024 Inducement Plan. Previously, each RSU and PSU grant reduced the available share pool by 2 shares. In June 2025, our stockholders approved an amendment to the 2010 Stock Plan to remove the fungible ratio, and all awards granted under the 2010 Stock Plan after June 10, 2025, the date of our latest annual meeting, will reduce the share reserve on a one-for-one basis. If awards granted under the 2010 Stock Plan on or prior to June 10, 2025 expire, become unexercisable or are forfeited or repurchased after that date, the shares that were subject to those awards will become available for future grant only on a one-for-one basis, even if the original award was a full value award that reduced the share reserve on a two-for-one basis. The 2024 Inducement Plan was amended in June 2025 to remove the provision that stated that any shares issued in connection with awards other than options and stock appreciation rights will be counted against the authorized share limitation as 2.0 shares for every one share so issued and, as a result, all awards granted under the 2024 Inducement Plan will reduce the share reserve thereunder on a one-for-one basis.
| Shares Available for Grant
Balance at December 31, 2024 | 4,013,611
Additional authorization - 2010 Stock Plan | 8,500,000
Additional authorization - 2024 Inducement Plan | 1,000,000
Options, RSUs and PSUs granted and issuance of shares for services rendered | (6,140,010)
Options, RSUs and PSUs cancelled | 1,217,120
Fungible ratio change adjustments | 282,731
Balance at September 30, 2025 | 8,873,452
We estimate an annualized forfeiture rate for our options, RSUs and PSUs. Under the true-up provisions of the stock compensation guidance, we will record additional expense if the actual forfeiture rate is lower than we estimated, and will record a recovery of prior expense if the actual forfeiture is higher than we estimated. Total compensation cost of options granted but not yet vested, as of September 30, 2025, was $25.6 million, which is expected to be recognized over the weighted average period of approximately 1.4 years. Total compensation cost of RSUs granted but not yet vested, as of September 30, 2025, was $299.9 million, which is expected to be recognized over the weighted average period of approximately 1.8 years. Total compensation cost of PSUs granted but not yet vested, as of September 30, 2025, was $43.9 million, which is expected to be recognized over the weighted average period of 2.4 years, should the underlying performance conditions be deemed probable of achievement.

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