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Equity Plans | 12 Months Ended
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Dec. 31, 2020
Equity Plans |
Equity Plans | Note 13. Equity Plans Equity Incentive Plan In May 2007, the Company established the 2007 Stock Option and Incentive Plan (“2007 Plan”) which provided for the granting of stock options to employees and consultants of the Company. Options granted under the 2007 Plan were either incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs were granted only to Company employees (including officers and directors who are also employees). NSOs were granted to Company employees and consultants. Options under the 2007 Plan have a term of ten years and generally vest over a four-year period. In July 2016, the Company’s board of directors and stockholders approved the 2016 Equity Incentive Plan (“2016 Plan”) to replace the 2007 Plan. Under the 2016 Plan, 1,200,000 shares of the Company’s common stock were initially reserved for the issuance of stock options, restricted stock units and other awards to employees, directors and consultants. Pursuant to the “evergreen” provision contained in the 2016 Plan, the number of shares reserved for issuance under the 2016 Plan automatically increases on January 1 of each year, starting on January 1, 2017 and continuing through (and including) January 1, 2026, by 4% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding fiscal year, or a lesser number of shares determined by the Company’s board of directors. Upon adoption of the 2016 Plan, no additional stock awards were issued under the 2007 Plan. Options granted under the 2007 Plan that were outstanding on the date the 2016 Plan became effective remain subject to the terms of the 2007 Plan. The number of options available for grant under the 2007 Plan was ceased and the number was added to the common stock reserved for issuance under the 2016 Plan. As of December 31, 2020, approximately 538,374 shares of common stock were available for issuance under the 2016 Plan. The 2016 Plan is administered by the board of directors or a committee appointed by the board of directors, which determines the types of awards to be granted, including the number of shares subject to the awards, the exercise price and the vesting schedule. Options granted under the 2016 Plan expire no later than ten years from the date of grant. The exercise price of each option may not be less than 100% of the fair market value of the common stock at the date of grant. Options may be granted to stockholders possessing more than 10% of the total combined voting power of all classes of stocks of the Company at an exercise price at least 110% of the fair value of the common stock at the date of grant and the options are not exercisable after the expiration of 10 years from the date of grant. Employee stock options generally vest over a period of approximately four years. Non-employee director initial stock options generally vest monthly over a period of approximately three years, and non-employee director annual refresher stock options generally vest over a period of approximately one year. Inducement Plan In May 2018, the Company’s board of directors approved the 2018 Inducement Plan, a non-stockholder approved stock plan, under which it reserved and authorized 750,000 shares of the Company’s common stock in order to award options and restricted stock unit awards to persons that were not previously employees or directors of the Company, or following a bona fide period of non-employment, as an inducement material to such persons entering into employment with the Company, within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. The 2018 Inducement Plan is administered by the board of directors or the Compensation Committee of the board, which determines the types of awards to be granted, including the number of shares subject to the awards, the exercise price and the vesting schedule. Awards granted under the 2018 Inducement Plan expire no later than ten years from the date of grant. As of December 31, 2020, approximately 574,375 shares were available for issuance under the 2018 Inducement Plan. Stock Options Activity under the Company’s equity incentive plans is set forth below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted- | ​ | Weighted- | ​ | ​
​ | ​ | ​ | ​ | Average | ​ | Average | ​ | ​
​ | ​ | ​ | ​ | Exercise | ​ | Remaining | ​ | Aggregate
​ | ​ | Options | ​ | Price Per | ​ | Contractual | ​ | Intrinsic
​ |  | Outstanding |  | Share |  | Life (years) |  | Value (1)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (in millions)
Balances at December 31, 2019 |  | 3,681,521 |  | $ | 11.64 |  | 7.78 |  | $ | 2.4
Options granted |  | 1,536,400 |  |  | 11.53 |  |  |  | ​ |
Options exercised |  | (294,238) | ​ |  | 7.49 |  | ​ |  | ​ | ​
Options forfeited | ​ | (275,563) | ​ | ​ | 11.54 | ​ | ​ | ​ | ​ | ​
Balances at December 31, 2020 |  | 4,648,120 |  | $ | 11.87 |  | 7.61 | ​ | $ | 40.0
Options exercisable – December 31, 2020 | ​ | 2,619,943 |  | $ | 12.10 |  | 6.65 | ​ | $ | 22.1
Options vested and expected to vest – December 31, 2020 | ​ | 4,648,120 | ​ | $ | 11.87 |  | 7.61 | ​ | $ | 40.0
____________________ (1) The aggregate intrinsic values were calculated as the difference between the exercise price of the options and the closing price of the Company’s common stock on December 31, 2020. The calculation excludes options with an exercise price higher than the closing price of the Company’s common stock on December 31, 2020. ​ The aggregate intrinsic value of options exercised was $3.0 million, $2.6 million and $1.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. During the years ended December 31, 2020, 2019 and 2018, the estimated weighted-average grant-date fair value of common stock underlying options granted was $7.76, $5.45 and $8.12 per share, respectively. Stock Options Valuation The fair value of stock option awards accounted for under ASC 718 was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ | ​ | 2020 | ​ | 2019 | ​ | 2018
Expected term (in years) |  | 5.27 - 6.08 |  | 5.00 - 6.08 |  | 5.49 - 6.08
Expected volatility |  | 72.1% - 87.5% | ​ | 61.0% - 64.8% | ​ | 62.0% - 66.5%
Risk-free interest rate |  | 0.23% - 1.44% | ​ | 1.42% - 2.58% | ​ | 2.42% - 3.03%
Dividend yield |  | — |  | — |  | —
​ In determining the fair value of the options granted, the Company uses the Black-Scholes option-pricing model and assumptions discussed below. Each of these inputs is subjective, and expected volatility generally requires significant judgment to determine. ​ Expected Term—The Company’s expected term represents the period that the Company’s options granted are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term). The Company has limited historical exercise information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior for its stock option grants. Expected Volatility— Prior to January 1, 2020, the Company’s expected volatility was estimated based on the average volatility for comparable publicly traded biopharmaceutical companies over a period equal to the expected term of the awards. Beginning January 1, 2020, the Company’s expected volatility is based upon a blend of 75% of the average volatility for comparable publicly traded biopharmaceutical companies and 25% of the volatility of the Company’s stock price since its initial public offering in August 2016. Risk-Free Interest Rate—The risk-free interest rate is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option. Expected Dividend—The Company has never paid dividends on its common stock and has no plans to pay dividends on its common stock. Therefore, the Company used an expected dividend yield of zero. Restricted Stock Units The Company began issuing restricted stock units under the 2016 Plan during the year ended December 31, 2018. A restricted stock unit is an agreement to issue shares of the Company’s common stock at the time of vesting. Restricted stock unit annual refresher awards vest in four equal installments on approximately the first, second, third and fourth anniversaries of the grant date. Restricted stock unit incentive awards granted during 2018 vested in three equal installments at six months intervals over a period of 18 months. Restricted stock unit activity under the Company’s equity incentive plans is set forth below: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted
​ | ​ | ​ | ​ | Average
​ | ​ | Number of | ​ | Grant Date
​ |  | Shares |  | Fair Value
​ | ​ | ​ | ​ | ​ | ​
Unvested at December 31, 2019 | ​ | 278,482 | ​ | $ | 10.08
Granted |  | 142,000 |  | ​ | 7.80
Vested |  | (131,147) | ​ |  | 9.52
Forfeited | ​ | (44,790) | ​ | ​ | 8.67
Unvested at December 31, 2020 | ​ | 244,545 | ​ | $ | 9.31
​ Stock-based compensation expense associated with restricted stock units is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date. For restricted stock units, the Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest. Employee Stock Purchase Plan In July 2016, the Company’s board of directors and stockholders approved the 2016 Employee Stock Purchase Plan (“2016 ESPP”). The 2016 ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended, and is administered by the Company’s board of directors and the Compensation Committee of the board of directors. Under the 2016 ESPP, 150,000 shares of the Company’s common stock were initially reserved for employee purchases of the Company’s common stock. Pursuant to the “evergreen” provision contained in the 2016 ESPP, the number of shares reserved for issuance automatically increases on January 1 of each year, starting on January 1, 2017 and continuing through (and including) January 1, 2026 by the lesser of (i) 1% of the total number of shares of common stock outstanding on December 31 of the preceding fiscal year (ii) 300,000 shares, or (iii) such other number of shares determined by the board of directors. The 2016 ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation. At the end of each offering period, eligible employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock at the beginning of the offering period or at the end of each applicable purchase period. During the year ended December 31, 2020, 92,523 shares were issued under the ESPP. As of December 31, 2020, 757,647 shares are available for issuance. The fair value of the rights granted under the 2016 ESPP was calculated using the Black-Scholes option-pricing model with the following assumptions: ​
​ ​ ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ | ​ | 2020 |  | 2019 |  | 2018
Expected term (in years) | ​ | 0.50 | ​ | 0.50 | ​ | 0.50
Expected volatility | ​ | 89.1% - 120.4% | ​ | 58.9% - 65.3% | ​ | 49.0% - 63.4%
Risk-free interest rate | ​ | 0.12% - 0.43% | ​ | 1.89% - 2.32% | ​ | 1.89% - 2.32%
Dividend yield | ​ | — | ​ | — | ​ | —
​ Stock-Based Compensation Total stock-based compensation expense was as follows (in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended December 31,
​ |  | 2020 |  | 2019 |  | 2018
Research and development | ​ | $ | 4,121 | ​ | $ | 4,350 | ​ | $ | 3,424
General and administrative | ​ |  | 3,778 | ​ |  | 4,003 | ​ |  | 3,495
Total stock-based compensation expense | ​ | $ | 7,899 | ​ | $ | 8,353 | ​ | $ | 6,919
​ As of December 31, 2020, total unrecognized stock-based compensation expense was $16.0 million, which the Company expects to recognize over a period of approximately 2.7 years.

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