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Stockholders' Equity | 9 Months Ended
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Sep. 30, 2019
Stockholders' Equity |
9. | Stockholders’ Equity
Public Offerings of Common Stock On July 19, 2019, the Company completed a public offering in which 1,587,000 shares of its common stock, including the underwriters’ exercise in full of an option to purchase an additional 207,000 shares, were sold to the public at a price of $87.00 per share (the “Stock Offering”). The net proceeds of the Stock Offering, after deducting underwriting discounts and commissions and other estimated offering expenses payable by the Company, were approximately $131.1 million. On May 3, 2019, the Company completed a public offering in which 3,144,531 shares of its common stock, which includes the underwriters’ exercise in full of an option to purchase up to an additional 410,156 shares, were sold to the public at a price of $64.00 per share. The total proceeds received by the Company from this offering, net of underwriting discounts and commissions and other estimated offering expenses payable by the Company, totaled approximately $189.6 million. Stock Option and Incentive Plans At our 2018 annual meeting of shareholders held on May 16, 2018, our shareholders approved the 2018 Stock Option and Incentive Plan (the “2018 Plan”). Under the 2018 Plan the number of shares of our common stock that are reserved and available for issuance is 2,778,000 plus the number of shares of common stock available for issuance under our Amended and Restated 2012 Stock Option and Incentive Plan (the “2012 Plan”). The shares of common stock underlying any awards under the 2018 Plan, 2012 Plan and the Second Amended and Restated 2001 Repligen Corporation Stock Plan (the “2001 Plan,” and together with the 2018 Plan and 2012 Plan, the “Plans”) that are forfeited, canceled or otherwise terminated (other than by exercise) shall be added back to the shares of stock available for issuance under the 2018 Plan. At September 30, 2019, 2,571,611 shares were available for future grant under the 2018 Plan. Stock-Based Compensation For the three months ended September 30, 2019 and 2018, the Company recorded stock-based compensation expense of $3.2 million and $2.8 million, respectively, for share-based awards granted under the Plans. The Company recorded stock-based compensation expense of $9.5 million and $7.7 million for the nine - month periods ended September 30, 2019 and 2018. The following table presents stock-based compensation expense in the Company’s consolidated statements of comprehensive income (loss):
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
|  | (Amounts in thousands) |
Cost of product revenue |  | $ | 375 |  |  | $ | 277 |  |  | $ | 992 |  |  | $ | 777 |
Research and development |  |  | 351 |  |  |  | 253 |  |  |  | 992 |  |  |  | 650 |
Selling, general and administrative |  |  | 2,449 |  |  |  | 2,249 |  |  |  | 7,475 |  |  |  | 6,245 |
Total stock-based compensation |  | $ | 3,175 |  |  | $ | 2,779 |  |  | $ | 9,459 |  |  | $ | 7,672 |
The 2018 Plan allows for the granting of incentive and nonqualified options to purchase shares of common stock, restricted stock and other equity awards. Employee grants under the Plans generally vest over a three to five year period, with 20 %-33% vesting on the first anniversary of the date of grant and the remainder vesting in equal yearly installments thereafter. Nonqualified options issued to non-employee directors and consultants under the Plans generally vest over one year. In the first quarter of 2018, to create a longer-term retention incentive, the Company’s Compensation Committee granted long-term incentive compensation awards to its Chief Executive Officer consisting of both stock options and restricted stock units (“RSUs”) that are subject to time-based vesting over nine years. Options granted under the Plans have a maximum term of ten years from the date of grant and generally, the exercise price of the stock options equals the fair market value of the Company’s common stock on the date of grant. At September 30, 2019, options to purchase 959,916 shares and 740,213 RSUs were outstanding under the Plans. The Company uses the Black-Scholes option pricing model to calculate the fair value of stock option awards on the grant date, and the Company uses the value of the common stock as of the grant date to value RSUs. The Company measures stock-based compensation cost at the grant date based on the estimated fair value of the award. The Company recognizes expense on awards with service-based vesting over the employee’s requisite service period on a straight-line basis. In the third quarter of 2017, the Company issued performance stock units to certain employees related to the Spectrum Acquisition which were tied to the achievement of certain 2018 revenue and gross margin metrics and the passage of time. Additionally, in the first quarter of 2018 and again in the first quarter of 2019, the Company issued performance stock units to certain individuals which are tied to the achievement of certain annual revenue and return on invested capital metrics. The Company recognizes expense on performance-based awards over the vesting period based on the probability that the performance metrics will be achieved. The Company recognizes stock-based compensation expense for options that are ultimately expected to vest, and accordingly, such compensation expense has been adjusted for estimated forfeitures. Information regarding option activity for the nine months ended September 30, 2019 under the Plans is summarized below:
|  | Shares |  |  | Weighted average exercise price |  |  | Weighted- Average Remaining Contractual Term (in Years) |  |  | Aggregate Intrinsic Value (in Thousands) |
Options outstanding at December 31, 2018 |  |  | 998,226 |  |  | $ | 27.54 |  |  |  |  |  |  |  |  |
Granted |  |  | 44,996 |  |  | $ | 61.98 |  |  |  |  |  |  |  |  |
Exercised |  |  | (83,306 | ) |  | $ | 12.70 |  |  |  |  |  |  |  |  |
Forfeited/expired/cancelled |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Options outstanding at September 30, 2019 |  |  | 959,916 |  |  | $ | 30.44 |  |  |  | 6.93 |  |  | $ | 44,396 |
Options exercisable at September 30, 2019 |  |  | 503,934 |  |  | $ | 24.18 |  |  |  | 5.64 |  |  | $ | 26,464 |
Vested and expected to vest at September 30, 2019 (1) |  |  | 923,962 |  |  |  |  |  |  |  | 6.87 |  |  | $ | 42,961 |
(1) | Represents the number of vested options as of September 30, 2019 plus the number of unvested options expected to vest as of September 30, 2019 based on the unvested outstanding options at September 30, 2019 adjusted for estimated forfeiture rates of 8% for awards granted to non-executive level employees and 3% for awards granted to executive level employees.
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing price of the common stock on September 30, 2019, the last business day of the third quarter of 2019, of $76.69 per share and the exercise price of each in-the-money option) that would have been received by the option holders had all option holders exercised their options on September 30, 2019. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2019 and 2018 was $5.2 million and $3.5 million, respectively. The weighted average grant date fair value of options granted during the nine months ended September 30, 2019 and 2018 was $30.07 and $18.56, respectively. The total fair value of stock options that vested during the nine months ended September 30, 2019 and 2018 was $2.9 million and $2.1 million, respectively. Information regarding RSU activity for the nine months ended September 30, 2019 under the Plans is summarized below:
|  | Shares |  |  | Weighted- Average Remaining Contractual Term (in Years) |  |  | Aggregate Intrinsic Value (in Thousands) |
Unvested at December 31, 2018 |  |  | 707,413 |  |  |  |  |  |  |  |  |
Awarded |  |  | 297,086 |  |  |  |  |  |  |  |  |
Vested |  |  | (228,103 | ) |  |  |  |  |  |  |  |
Forfeited/expired/cancelled |  |  | (36,183 | ) |  |  |  |  |  |  |  |
Unvested at September 30, 2019 |  |  | 740,213 |  |  |  | 3.85 |  |  | $ | 56,767 |
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (equal to the closing price of the common stock on September 30, 2019, the last business day of the thi rd quarter of 2019, of $76.69 per share, as RSUs do not have an exercise price) that would have been received by the RSU holders had all holders exercised on September 30, 2019. The aggregate intrinsic value of RSUs vested during the nine months ended September 30, 2019 and 2018 was $15.5 million and $5.2 million, respectively. The weighted average grant date fair value of RSUs vested during the nine months ended September 30, 2019 and 2018 was $33.46 and $30.21, respectively. The total fair value of RSUs that vested during the nine months ended September 30, 2019 and 2018 was $7.6 million and $4.1 million, respectively. As of September 30, 2019, there was $37.7 million of total unrecognized compensation cost related to unvested share-based awards. This cost is expected to be recognized over a weighted average remaining requisite service period of 4.13 years. The Company expects 1,676,976 unvested options and RSUs to vest over the next five years.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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