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Stock award plan

12 Months Ended

Dec. 31, 2023

Share-based Payment Arrangement [Abstract]

Stock award plan

10. Stock award plan

In May 2013, the Company’s Board of Directors and stockholders approved the 2013 Long Term Incentive Plan, which became effective upon the closing of the Company’s IPO. The 2013 Long Term Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards and other stock-based awards. On June 8, 2022 (the “Restatement Effective Date”), the Company’s stockholders approved the Amended and Restated 2013 Long-Term Incentive Plan (the “Amended 2013 LTIP”). The Amended 2013 LTIP provides for the grant of incentive stock options, nonstatutory stock options, restricted stock units and other stock-based awards. The number of shares of common stock reserved for issuance under the Amended 2013 LTIP is the sum of (A) the number of shares of the Company’s common stock (up to 16,724,212 shares) that is equal to the sum of (1) the number of shares issued under the 2013 Long-Term Incentive Plan prior to the Restatement Effective Date, (2) the number of shares that remain available for issuance under the 2013 Long-Term Incentive Plan immediately prior to the Restatement Effective Date and (3) the number of shares subject to awards granted under the 2013 Long-Term Incentive Plan prior to the Restatement Effective Date that are outstanding as of the Restatement Effective Date, plus (B) from and after the Restatement Effective Date, an additional 8,475,000 shares of Common Stock. As of December 31, 2023, awards for 8,680,209 shares of common stock were available for issuance under the Amended 2013 LTIP.

There are no additional shares of common stock available for issuance under the Company’s 1998 Employee, Director and Consultant Stock Option Plan, 2009 Equity and Long Term Incentive Plan or 2013 Stock Incentive Plan.

In January 2020, the Company’s Board of Directors approved the 2020 Inducement Stock Incentive Plan. The 2020 Inducement Stock Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards and other stock-based awards, initially up to an aggregate of 1,000,000 shares of common stock. Any grants made under the 2020 Inducement Stock Incentive Plan must be made pursuant to the Nasdaq Listing Rule 5635(c)(4)

inducement grant exception as a material component of the Company’s new hires’ employment compensation. In December 2020, the Company’s Board of Directors approved an additional 1,000,000 shares of common stock that may be issued under the 2020 Inducement Stock Incentive Plan. In April 2022, the Company’s Board of Directors approved a reduction in the total number of shares of common stock that may be issued under the 2020 Inducement Stock Incentive Plan to 1,300,000 shares. In December 2022, the Company’s Board of Directors approved an additional 1,700,000 shares of common stock that may be issued under the 2020 Inducement Stock Inventive Plan. As of December 31, 2023, awards for 1,834,322 shares of common stock are available for issuance under the 2020 Inducement Stock Incentive Plan.

The Board of Directors has the authority to select the individuals to whom options are granted and determine the terms of each option, including (i) the number of shares of common stock subject to the option; (ii) the date on which the option becomes exercisable; (iii) the option exercise price, which, in the case of incentive stock options, must be at least 100% (110% in the case of incentive stock options granted to a stockholder owning in excess of 10% of the Company’s stock) of the fair market value of the common stock as of the date of grant; and (iv) the duration of the option (which, in the case of incentive stock options, may not exceed ten years). Options typically vest over a four-year period.

Inducement stock option awards

Pursuant to the Nasdaq inducement grant exception, during the year ended December 31, 2023, the Company issued options to purchase an aggregate of 139,040 shares of common stock to certain new hire employees at a weighted-average exercise price of $41.25 per share under the 2020 Inducement Stock Incentive Plan. Additionally, during the year ended December 31, 2023, the Company issued 105,370 restricted stock units under the 2020 Inducement Stock Incentive Plan. An aggregate of 270,583 of options and 79,195 of restricted stock units previously granted as inducement awards were forfeited during the year ended December 31, 2023 in connection with employee separations from the Company.

Stock option activity—A summary of stock option activity is as follows:


							Weighted-
				Weighted-			average			Aggregate
				average			remaining			intrinsic
		Number of		exercise			contractual			value(in
		options		price			term			thousands)

Outstanding at December 31, 2020		9,663,677		$	38.72
Granted		2,487,234		$	61.36
Exercised		(635,871)		$	28.01
Forfeited		(742,458)		$	52.04
Outstanding at December 31, 2021		10,772,582		$	43.66
Granted		1,685,435		$	38.55
Exercised		(496,863)		$	29.45
Forfeited		(458,737)		$	48.75
Outstanding at December 31, 2022		11,502,417		$	43.33
Granted		1,117,284		$	40.19
Exercised		(822,482)		$	29.25
Forfeited/Cancelled		(2,196,820)		$	45.85
Outstanding at December 31, 2023		9,600,399		$	43.59		5.39	years		$	8,814
Vested or Expected to vest at December 31, 2023		1,796,687		$	45.85		8.16	years		$	366
Exercisable at December 31, 2023		7,650,948		$	43.08		4.68	years		$	8,387

The fair values of grants made in the years ended December 31, 2023, 2022 and 2021 were contemporaneously estimated on the date of grant using the following assumptions:



	2023		2022		2021
Risk-free interest rate	3.54% - 4.69%		1.55% - 4.57%		0.51% - 1.24%
Expected volatility	53% - 56%		54% - 74%		74% - 89%
Expected term	5.5 years		5.5 years		5.5 years

The Company assumed no expected dividends for all grants. The weighted average grant date fair value of options granted during the years ended December 31, 2023, 2022 and 2021 was $21.27, $23.54, and $43.05 per share, respectively.

Restricted Stock Awards and Restricted Stock Units—Restricted stock awards and restricted stock units are granted subject to certain restrictions, including in some cases service conditions (restricted stock). The grant-date fair value of restricted stock awards, which has been determined based upon the market value of the Company’s shares on the grant date, is expensed over the vesting period.

The following table summarizes information on the Company’s restricted stock awards and units:


		Restricted Stock Awards and Units
				Weighted
				Average
				Grant
		Number of		Date
		Shares		Fair Value
Unvested at December 31, 2022		2,516,336		$	45.67
Granted		2,104,128			38.75
Vested		(920,488)			43.74
Forfeited		(833,706)			42.31
Unvested at December 31, 2023		2,866,270		$	41.82

Performance-based Restricted Stock Units—In December 2023, the Company granted 150,000 performance-based restricted stock units (“PSUs”) to its Chief Executive Officer, Dr. Matthew Klein, which will vest only if challenging performance goals relating to development and regulatory milestones are achieved over an approximately two year performance period. As of December 31, 2023, the achievements of the performance goals have not yet been deemed probable and therefore no expense has been recognized to date.

Employee Stock Purchase Plan—In June 2016, the Company established an Employee Stock Purchase Plan (as amended, “ESPP” or the “Plan”) for certain eligible employees. The Plan is administered by the Company’s Board of Directors or a committee appointed by the Board. In June 2021, the Plan was amended to increase the total number of shares available for purchase under the Plan from one million shares to two million shares of the Company’s common stock. Employees may participate over a six-month period through payroll withholdings and may purchase, at the end of the six-month period, the Company’s common stock at a purchase price of at least 85% of the closing price of a share of the Company’s common stock on the first business day of the offering period or the closing price of a share of the Company’s common stock on the last business day of the offering period, whichever is lower. No participant will be granted a right to purchase the Company’s common stock under the Plan if such participant would own more than 5% of the total combined voting power of the Company or any subsidiary of the Company after such purchase. For the period ending December 31, 2023, the Company recorded $2.4 million in compensation expense related to the ESPP.

The Company recorded share-based compensation expense in the statement of operations related to incentive stock options, nonstatutory stock options, restricted stock awards, restricted stock units and the ESPP as follows:


		Year ended December 31,
		2023			2022			2021
Research and development		$	52,941		$	55,869		$	53,632
Selling, general and administrative			48,695			54,464			49,881
Total		$	101,636		$	110,333		$	103,513

As of December 31, 2023, there was approximately $119.6 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Company’s Plans. This cost is expected to be recognized as compensation expense over the weighted average remaining service period of approximately 2.1 years.