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Share-based compensation

3 Months Ended

Mar. 31, 2024

Share-based compensation

Share-based compensation

10Share-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”). The number of shares authorized for issuance under the 2014 Plan is 14,351,471.

In June 2018, the Company’s shareholders adopted and approved an employee share purchase plan (the “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, as amended. 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.

2014 Plans and ESPP

Share-based compensation expense recognized by classification included in the Consolidated Statements of Operations and Comprehensive Loss in relation to the 2014 Plans and the ESPP for the periods indicated below was as follows:


		Three months ended March 31,
		2024			2023

		(in thousands)
Cost of manufacturing services revenue		$	345		$	24
Research and development			3,425			4,305
Selling, general and administrative			3,421			3,732
Total		$	7,191		$	8,061

Share-based compensation expense recognized by award type for the 2014 Plans as well as the ESPP was as follows:


		Three months ended March 31,
		2024			2023

		(in thousands)
Award type/ESPP
Share options		$	2,913		$	3,274
Restricted share units			4,370			4,630
Performance share units			(99)			150
Employee share purchase plan			7			7
Total		$	7,191		$	8,061

As of March 31, 2024, 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		$	20,743		2.56
Restricted share units			27,981		1.99
Performance share units			80		0.61
Total		$	48,804		2.23

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% of each grant 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 2014 Plans for the three months ended March 31, 2024:


		Options
		Number of		Weighted average
		ordinary shares		exercise price

Outstanding at December 31, 2023		4,974,030			23.25
Granted		930,900		$	5.59
Forfeited		(71,437)		$	21.26
Expired		(11,584)		$	37.61
Outstanding at March 31, 2024		5,821,909		$	20.42
Thereof, fully vested, and exercisable on March 31, 2024		3,054,242		$	25.70
Thereof, outstanding and expected to vest after March 31, 2024		2,767,667		$	14.60
Outstanding and expected to vest after December 31, 2023		2,098,557		$	23.38


Total weighted average grant date fair value of options issued during the period (in $ millions)				$	3.0

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 March 31,
Assumptions		2024		2023
Expected volatility		70%		70%
Expected terms		10 years		10 years
Risk free interest rate		4.32%		4.10%
Expected dividend yield		0%		0%

RSUs

The following table summarizes the RSU activity for the three months ended March 31, 2024:


		RSUs
				Weighted average
		Number of		grant-date fair
		ordinary shares		value
Non-vested at December 31, 2023		2,264,369		$	18.07
Granted		1,160,800		$	5.59
Vested		(659,240)		$	20.30
Forfeited		(58,401)		$	17.39
Non-vested at March 31, 2024		2,707,528		$	12.19

Total weighted average grant date fair value of RSUs granted during the period (in $ millions)				$	6.5

RSUs generally vest over one to three years. RSUs granted to non-executive directors vest one year from the date of grant.

PSUs

The following table summarizes the PSU activity for the three months ended March 31, 2024:


		PSUs
				Weighted average
		Number of		grant-date fair
		ordinary shares		value
Non-vested at December 31, 2023		222,550		$	28.09
Forfeited		(17,030)		$	27.12
Non-vested at March 31, 2024		205,520		$	27.99

The Company granted ordinary shares to certain employees in December 2021 and at various dates during the year ended December 31, 2022 that will be earned upon achievement of defined milestones. Earned ordinary shares will vest upon the later of a minimum service period of one year or three years, or the achievement of defined milestones, subject to the grantee’s continued employment. In addition, portions of the ordinary shares granted in December 2021 to executives and other members of senior management are subject to achieving a minimum total shareholder return relative to the NASDAQ Biotechnology Index. The Company recognizes the compensation cost related to these grants to the extent it considers achievement of the milestones to be probable. As of March 31, 2024, two milestones had been achieved and vested in either 2022 or 2023. Additionally, another two milestones are considered probable as of December 31, 2023 and March 31, 2024.

The ESPP

During the three months ended March 31, 2024, nil ordinary shares were issued under the ESPP compared to 2,495 during the same period in 2023. As of March 31, 2024, 96,862 ordinary shares remain available for issuance under the ESPP compared to a total of 113,565 as of March 31, 2023.