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Stockholders' Equity | 3 Months Ended
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Mar. 31, 2022
Stockholders' Equity | 8. Stockholders’ Equity Stock Option and Incentive Plans Under the Company’s current 2018 Stock Option and Incentive Plan (the “2018 Plan”), the number of shares of the Company’s 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 the Company’s previous plans. The shares of common stock underlying any awards under the 2018 Plan and previous plans (together, the “Plans”) that are forfeited, canceled or otherwise terminated (other than by exercise) are added back to the shares of stock available for issuance under the 2018 Plan. At March 31, 2022, 1,954,613 shares were available for future grants under the 2018 Plan. Stock-Based Compensation For the three months ended March 31, 2022 and 2021, the Company recorded stock-based compensation expense of $7.9 million and $6.5 million, respectively, for share-based awards granted under the Plans. The following table presents stock-based compensation expense in the Company’s consolidated statements of comprehensive income:
|  | Three Months Ended March 31, |
|  | 2022 |  |  | 2021 |
|  | (Amounts in thousands) |
Cost of product revenue |  | $ | 622 |  |  | $ | 506 |
Research and development |  |  | 799 |  |  |  | 716 |
Selling, general and administrative |  |  | 6,494 |  |  |  | 5,319 |
Total stock-based compensation |  | $ | 7,915 |  |  | $ | 6,541 |
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 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 which consisted 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 March 31, 2022, options to purchase 650,059 shares and 591,377 stock units were outstanding under the Plans. Stock Options The Company uses the Black-Scholes option pricing model to calculate the fair value of stock option awards on the grant date and measures stock-based compensation costs for stock options 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. 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 three months ended March 31, 2022 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, 2021 |  |  | 625,107 |  |  | $ | 54.15 |  |  |  | 6.29 |  |  | $ | 131,707 |
Granted |  |  | 34,473 |  |  | $ | 189.21 |  |  |  |  |  |  |
Exercised |  |  | (9,521 | ) |  | $ | 31.12 |  |  |  |  |  |  |
Forfeited/expired/cancelled |  |  | — |  |  | $ | — |  |  |  |  |  |  |
Options outstanding at March 31, 2022 |  |  | 650,059 |  |  | $ | 61.65 |  |  |  | 6.27 |  |  | $ | 82,990 |
Options exercisable at March 31, 2022 |  |  | 376,069 |  |  | $ | 42.55 |  |  |  | 5.61 |  |  | $ | 54,931 |
Vested and expected to vest at March 31, 2022(1) |  |  | 631,360 |  |  |  |  |  |  | 6.26 |  |  | $ | 80,798 |
(1) Represents the number of vested options as of March 31, 2022 plus the number of unvested options expected to vest as of March 31, 2022 based on the unvested outstanding options at March 31, 2022 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 March 31, 2022, the last business day of the first quarter of 2022, of $188.09 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 March 31, 2022. The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2022 and 2021 was $1.4 million and $2.5 million, respectively. The weighted average grant date fair value of options granted during the three months ended March 31, 2022 and 2021 was $79.96 and $92.35, respectively. The total fair value of stock options that vested during the three months ended March 31, 2022 and 2021 was $2.0 million and $1.9 million, respectively. Stock Units The fair value of stock units is calculated using the closing price of the Company’s common stock on the date of grant. The Company recognizes expense on awards with service-based vesting over the employee's requisite service period on a straight-line basis. Prior to 2020, the Company issued performance stock units to certain employees which are tied to the achievement of certain company financial goal metrics and the passage of time. Since 2020, the Company has implemented formal programs that issue performance stock units to certain employees set to vest upon the achievement of individual goals and financial goals of the Company, as well as the passage of time. The Company recognizes expense on performance-based awards over the vesting period based on the probability that the performance metrics will be achieved. Information regarding stock unit activity, which includes activity for RSUs and performance stock units, for the three months ended March 31, 2022 under the Plans is summarized below:
|  | Shares |  |  | Weighted- Average Remaining Contractual Term (in Years) |  |  | Aggregate Intrinsic Value (in Thousands) |
Unvested at December 31, 2021 |  |  | 606,685 |  |  |  | 3.07 |  |  | $ | 160,674 |
Awarded |  |  | 124,139 |  |  |  |  |  |  |
Vested |  |  | (130,978 | ) |  |  |  |  |  |
Forfeited/expired/cancelled |  |  | (8,469 | ) |  |  |  |  |  |
Unvested at March 31, 2022 |  |  | 591,377 |  |  |  | 3.09 |  |  | $ | 111,232 |
Vested and expected to vest at March 31, 2022(1) |  |  | 574,925 |  |  |  | 2.73 |  |  | $ | 108,138 |
(1) Represents the number of vested stock units as of March 31, 2022 plus the number of unvested stock units expected to vest as of March 31, 2022 based on the unvested outstanding stock units at March 31, 2022 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 (equal to the closing price of the common stock on March 31, 2022, the last business day of the first quarter of 2022, of $188.09 per share, as stock units do not have an exercise price) that would have been received by the stock unit holders had all holders exercised on March 31, 2022. The aggregate intrinsic value of stock units vested during the three months ended March 31, 2022 and 2021 was $30.2 million and $27.1 million, respectively. The weighted average grant date fair value of stock units granted during the three months ended March 31, 2022 and 2021 was $196.36 and $209.13, respectively. The total fair value of stock units that vested during the three months ended March 31, 2022 and 2021 was $14.2 million and $6.5 million, respectively. As of March 31, 2022, there was $77.4 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 3.14 years. The Company expects 1,786,096 unvested options and stock units 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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (g) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 16 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496180-112644 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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