In 2018, the Company’s board of directors adopted the 89Bio Ltd. 2018 Equity Incentive Plan (the “2018 Plan”). In connection with the Reorganization in September 2019, the Company’s board of directors approved the 2019 Equity Incentive Plan (the “2019 Plan”), which became effective in September 2019. From and after the effective date of the 2019 Plan, the Company will no longer be making any future awards under the 2018 Plan.

The Company initially reserved 2,844,193 shares of common stock for issuance under the 2019 Plan. In addition, the number of shares of common stock reserved for issuance under the 2019 Plan will automatically increase on the first day of January for a period of up to ten years, commencing on January 1, 2020, in an amount equal to 4% of the total number of shares of the Company’s capital stock outstanding on the immediately preceding December 31, or a lesser number of shares determined by the Company’s board of directors. As of December 31, 2020, there were 1,433,991 shares of common stock available for issuance as future option grants under the 2019 Plan.

The Board determines the period over which options become exercisable and options generally vest over a four-year period, with 25% of options vesting on the first anniversary of employment, and thereafter, the remaining options vesting quarterly, over the following 36-month period. The options will expire within ten years from the date of grant. The exercise price of awards granted will not be less than the estimated fair value of the shares on the date of grant.

In October 2019, the Company adopted the 2019 Employee Stock Purchase Plan (“ESPP”), which became effective following the date of the IPO. The Company initially reserved 225,188 shares of common stock for purchase under the ESPP. The number of shares of common stock reserved for issuance under the ESPP will automatically increase on the first day of January for a period of up to ten years, in an amount equal to 1% of the total number of shares of the Company’s common stock outstanding on the immediately preceding December 31, or a lesser number of shares determined by the Company’s board of directors. Purchases will be accomplished through the participation of discrete offering periods and each offering is expected to be 6 months long. For each offering period, ESPP participants will purchase shares of common stock at a price per share equal to 85% of the lesser of the fair market value of the Company’s common stock on (1) the first trading day of the applicable offering period or (2) the last trading day of the applicable offering period.

The first six-month offering period under the ESPP commenced on January 1, 2020 and ended on June 30, 2020 and the second six-month offering period commenced on July 1, 2020 and ended on December 31, 2020. A total of 7,272 shares of common stock were purchased pursuant to the ESPP for the year ended December 31, 2020. As of December 31, 2020, there were 355,806 shares of common stock available for issuance under the ESPP.

The Company recorded share-based compensation for the periods indicated as follows (in thousands):

	Year Ended December 31,
	2020		2019
Research and development	$	1,250	$	30
General and administrative		2,557		359
Total share-based compensation	$	3,807	$	389

The fair value of option awards granted for the periods indicated was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions:

	Year Ended December 31,
	2020		2019
Expected term (years)	4.0-6.1		5.9-6.1
Contractual term (years)		10.0		10.0
Expected volatility	86.4-97.6%		61.8-87.6%
Risk-free interest rate	0.2-1.5%		1.6-2.6%
Expected dividend		—		—

The following table summarizes stock option activity for the year ended December 31, 2020:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Options			Price		Term		Value
						(In years)		(In thousands)
Balance outstanding as of December 31, 2019		1,320,243		$	3.34		9.23	$	30,353
Granted		682,000			29.78
Exercised		(63,366	)		4.29
Cancelled		(40,482	)		2.87
Balance outstanding as of December 31, 2020		1,898,395			12.79		8.60	$	25,918
Exercisable as of December 31, 2020		535,084		$	2.58		8.11	$	11,684

During the year ended December 31, 2020, the estimated total grant date fair value of options vested was $0.8 million. The weighted-average grant date fair value of options granted for the years ended December 31, 2020 and 2019 was $21.88 and $2.90 per share, respectively. As of December 31, 2020, there was $13.5 million of unrecognized share-based compensation cost related to stock options granted under the 2019 Plan, which is expected to be recognized over a weighted-average period of 2.5 years.