Stock-Based Compensation

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

4. Stock-Based Compensation

The following table summarizes the total stock-based compensation expense included in the Company’s unaudited condensed consolidated statements of operations for the periods presented (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Cost of product sales	$	383	$	276	$	898	$	644
Research and development		3,863		5,063		11,705		12,701
Selling, general and administrative		21,918		13,200		43,996		35,053
	$	26,164	$	18,539	$	56,599	$	48,398

The fair value of each employee stock option and each employee stock purchase plan right granted is estimated on the grant date under the fair value method using the Black-Scholes valuation model, which requires the Company to make a number of assumptions including the estimated expected life of the award and related volatility. The fair value of restricted stock units is estimated based on the market price of the Company’s common stock on the date of grant. The estimated fair values of stock options, purchase plan rights, and restricted stock units are then expensed over the requisite service period, which is generally the vesting period. For restricted stock units requiring satisfaction of both market and service conditions, the estimated fair values are generally expensed over the longest of the explicit, implicit and derived service periods. The Company issues two different types of performance-based stock awards. Expense related to the performance-based stock awards that vest upon the achievement of certain pre-defined company-specific performance-based criteria is generally recognized ratably over the expected performance period once the pre-defined performance-based criteria for vesting becomes probable. Expense for the performance-based stock awards with a market condition that are earned based on the Company’s relative total stockholder return (rTSR) as compared to a peer group of companies is recognized over the requisite service period regardless of whether the market conditions are achieved and will only be adjusted for pre-vesting forfeitures due to the termination of the recipient’s employment with the Company prior to the end of the performance period.

In connection with the departure of the former Chief Executive Officer (CEO), in September 2024 the Company incurred approximately $10.7 million stock-based compensation expense as a result of accelerated equity award vesting and stock modifications under the former CEO’s severance plan.