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Share-based compensation | 9 Months Ended
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Sep. 30, 2021
Share-based compensation |
Share-based compensation | 10 Share-based compensation ​ The Company’s share-based compensation plans include the 2014 Amended and Restated Share Option Plan (the “2014 Plan”) and inducement grants under Rule 5653(c)(4) of the Nasdaq Global Select Market with terms similar to the 2014 Plan (together the “2014 Plans”). At the annual general meeting of shareholders in June 2021, the Company’s shareholders approved an increase in the number of shares authorized for issuance under the 2014 Plan from 8,601,471 to 12,601,471. ​
| a) | 2014 Plans
​ Share-based compensation expense recognized by classification included in the Consolidated statements of operations and comprehensive loss in relation to the 2014 Plans for the periods indicated below was as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
| ​ | Three months ended September 30, | ​ | Nine months ended September 30,
​ |  | 2021 |  | 2020 | ​ | 2021 | ​ | 2020
​ | ​ | (in thousands) | ​ | (in thousands)
Research and development | ​ | $ | 3,245 | ​ | $ | 3,906 | ​ | $ | 9,205 | ​ | $ | 9,177
Selling, general and administrative | ​ | ​ | 2,705 | ​ | ​ | 2,457 | ​ | ​ | 9,520 | ​ | ​ | 7,240
Total | ​ | $ | 5,950 | ​ | $ | 6,363 | ​ | $ | 18,725 | ​ | $ | 16,417
​ ​ ​ Share-based compensation expense recognized by award type was as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended September 30, | ​ | Nine months ended September 30,
​ |  | 2021 |  | 2020 | ​ | 2021 | ​ | 2020
​ | ​ | (in thousands) | ​ | (in thousands)
Award type | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Share options | ​ | $ | 2,965 | ​ | $ | 3,994 | ​ | $ | 9,155 | ​ | $ | 8,948
Restricted share units | ​ | ​ | 2,582 | ​ | ​ | 1,525 | ​ | ​ | 8,364 | ​ | ​ | 5,178
Performance share units | ​ | ​ | 403 | ​ | ​ | 844 | ​ | ​ | 1,206 | ​ | ​ | 2,291
Total | ​ | $ | 5,950 | ​ | $ | 6,363 | ​ | $ | 18,725 | ​ | $ | 16,417
​ As of September 30, 2021, the unrecognized share-based compensation expense related to unvested awards under the 2014 Plans were: ​
​ | ​ | ​ | ​ | ​ | ​
​ |  | Unrecognized |  | Weighted average
​ |  | share-based |  | remaining
​ | ​ | compensation | ​ | period for
​ | ​ | expense | ​ | recognition
​ | ​ | (in thousands) | ​ | (in years)
Award type | ​ | ​ | ​ | ​ | ​
Share options | ​ | $ | 31,952 | ​ | 2.93
Restricted share units | ​ | ​ | 21,887 | ​ | 2.16
Performance share units | ​ | ​ | 1,359 | ​ | 0.76
Total | ​ | $ | 55,198 | ​ | 2.57
​ The Company satisfies the exercise of share options and vesting of Restricted Share Units (“RSUs”) and Performance Share Units (“PSUs”) through newly issued ordinary shares. ​ Share options Share options are priced on the date of grant and, except for certain grants made to non-executive directors, vest over a period of four years. The first 25% vests after one year from the initial grant date and the remainder vests in equal quarterly installments over years two, three and four. Certain grants to non-executive directors vest in full after one year. Any options that vest must be exercised by the tenth anniversary of the initial grant date. The following tables summarize option activity under the Company’s 2014 Plans for the nine months ended September 30, 2021: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Options
​ | ​ | Number of | ​ | Weighted average
​ |  | ordinary shares |  | exercise price
​ | ​ | ​ | ​ | ​ | ​
Outstanding at December 31, 2020 | ​ | 2,659,279 | ​ | $ | 28.13
Granted | ​ | 1,088,843 | ​ | $ | 36.37
Forfeited | ​ | (233,777) | ​ | $ | 40.81
Expired | ​ | (14,146) | ​ | $ | 45.59
Exercised | ​ | (156,787) | ​ | $ | 11.65
Outstanding at September 30, 2021 | ​ | 3,343,412 | ​ | $ | 30.63
Thereof, fully vested and exercisable at September 30, 2021 | ​ | 1,792,291 | ​ | $ | 23.14
Thereof, outstanding and expected to vest after September 30, 2021 | ​ | 1,551,121 | ​ | $ | 39.28
​
​ | ​ | ​ | ​ | ​ | ​
Total weighted average grant date fair value of options issued during the period (in $ millions) | ​ | ​ | ​ | $ | 23.2
Proceeds from option sales during the period (in $ millions) | ​ | ​ | ​ | $ | 1.8
​ The fair value of each option issued is estimated at the respective grant date using the Hull & White option pricing model with the following weighted-average assumptions: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended September 30, |  | Nine months ended September 30,
Assumptions |  | 2021 |  | 2020 |  | 2021 |  | 2020
Expected volatility | ​ | 75% | ​ | 70% | ​ | 75% | ​ | 70%
Expected terms | ​ | 10 years | ​ | 10 years | ​ | 10 years | ​ | 10 years
Risk free interest rate | ​ | 1.47% | ​ | 0.84% | ​ | 1.21% - 1.85% | ​ | 0.76% - 1.44%
Expected dividend yield | ​ | 0% | ​ | 0% | ​ | 0% | ​ | 0%
​ Restricted share units (“RSUs”) ​ The following table summarizes the RSUs activity for the nine months ended September 30, 2021: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | RSU
​ |  | ​ |  | Weighted average
​ | ​ | Number of | ​ | grant-date fair
​ | ​ | ordinary shares | ​ | value
Non-vested at December 31, 2020 | ​ | 467,344 | ​ | $ | 43.56
Granted | ​ | 547,271 | ​ | $ | 36.48
Vested | ​ | (214,368) | ​ | $ | 40.48
Forfeited | ​ | (102,697) | ​ | $ | 40.94
Non-vested at September 30, 2021 | ​ | 697,550 | ​ | $ | 39.34
​ | ​ | ​ | ​ | ​ | ​
Total weighted average grant date fair value of RSUs granted during the period (in $ millions) | ​ | ​ | ​ | $ | 20.0
​ RSUs vest over one to three years. RSUs granted to non-executive directors vest one year from the date of grant. ​ Performance share units (“PSUs”) ​ The following table summarizes the PSUs activity for the nine months ended September 30, 2021: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | PSU
​ |  | ​ |  | Weighted average
​ | ​ | Number of | ​ | grant-date fair
​ | ​ | ordinary shares | ​ | value
Non-vested at December 31, 2020 | ​ | 212,614 | ​ | $ | 42.32
Granted | ​ | 66,600 | ​ | ​ | 36.39
Vested | ​ | (132,368) | ​ | $ | 33.09
Forfeited | ​ | (2,916) | ​ | $ | 57.56
Non-vested at September 30, 2021 | ​ | 143,930 | ​ | $ | 47.76
​ The PSUs granted in 2019 vest on the third anniversary of the grant, subject to the grantee’s continued employment. ​ The Company granted shares to certain employees in September 2021 that will be earned upon the later of one year of service period or the achievement of certain defined milestones, subject to the grantee’s continued employment. The Company recognized the compensation cost related to these grants to the extent it considers achievement of the milestones to be probable. ​
| b) | Employee share purchase plan (“ESPP”)
​ In June 2018, the Company’s shareholders adopted and approved an ESPP allowing the Company to issue up to 150,000 ordinary shares. The ESPP is intended to qualify under Section 423 of the Internal Revenue Code of 1986. Under the ESPP, employees are eligible to purchase ordinary shares through payroll deductions, subject to any plan limitations. The purchase price of the ordinary shares on each purchase date is equal to 85% of the lower of the closing market price on the offering date and the closing market price on the purchase date of each three-month offering period. During the nine months ended September 30, 2021, 4,724 ordinary shares were issued under the ESPP compared to 3,282 during the same period in 2020. As of September 30, 2021, a total of 127,302 ordinary shares remain available for issuance under the ESPP plan compared to a total of 134,925 as of September 30, 2020.

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