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Share-Based Compensation | 12 Months Ended
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Dec. 31, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Share-Based Compensation | 7. SHARE-BASED COMPENSATION In December 2014, the Company’s board of directors adopted the Wave Life Sciences Ltd. 2014 Equity Incentive Plan (the “2014 Plan”), and reserved 1,763,714 ordinary shares for issuance under this plan, which was increased to 5,064,544 in 2015, to 6,064,544 in 2017 and to 6,943,344 in 2018. The 2014 Plan authorizes the board of directors or a committee of the board to grant incentive share options, non-qualified share options, share appreciation rights, restricted awards, which include restricted shares and restricted share units (“RSUs”), and performance awards to eligible employees, consultants and directors of the Company. The company accounts for grants to its board of directors as grants to employees. As of December 31, 2018, 1,545,151 ordinary shares remained available for future grant under the 2014 Plan. Share option activity under the 2014 Plan is summarized as follows:
|  | Number of Shares |  |  | Weighted- Average Exercise Price |  |  | Weighted-Average Remaining Contractual Term (in years) |  |  | Aggregate Intrinsic Value (in thousands)(1) |
Outstanding as of January 1, 2018 |  |  | 3,767,130 |  |  | $ | 12.69 |  |  |  |  |  |  |  |  |
Granted |  |  | 830,420 |  |  | 44.77 |  |  |  |  |  |  |  |  |
Exercised |  |  | (507,632 | ) |  | 10.07 |  |  |  |  |  |  |  |  |
Forfeited or cancelled |  |  | (73,328 | ) |  | 19.93 |  |  |  |  |  |  |  |  |
Outstanding as of December 31, 2018 |  |  | 4,016,590 |  |  | $ | 19.47 |  |  |  | 7.24 |  |  | $ | 93,520 |
Options exercisable as of December 31, 2018 |  |  | 2,451,584 |  |  | $ | 10.11 |  |  |  | 6.51 |  |  | $ | 78,280 |
Options unvested as of December 31, 2018 |  |  | 1,565,006 |  |  | $ | 34.14 |  |  |  | 8.39 |  |  | $ | 15,240 |
(1) | The aggregate intrinsic value of options is calculated as the difference between the exercise price of the share options and the fair value of the Company’s ordinary shares for those share options that had exercise prices lower than the fair value of the ordinary shares as of the end of the period.
Options generally vest over periods of one to four years, and options that are forfeited or cancelled are available to be granted again. The contractual life of options is generally five or ten years from the grant date. The assumptions used in the Black-Scholes option pricing model to determine the fair value of share options granted to employees during the period were as follows:
|  | For the Year Ended December 31,
|  | 2018 |  | 2017 |  | 2016
Risk-free interest rate |  | 2.49% – 3.01% |  | 1.49% – 2.23% |  | 1.15% – 2.18%
Expected term (in years) |  | 3.00 – 6.25 |  | 3.00 – 6.25 |  | 3.00 – 6.25
Expected volatility |  | 64.17% – 70.90% |  | 68.95% – 72.24% |  | 60.89% – 68.76%
Expected dividend yield |  | 0% |  | 0% |  | 0%
There were no options granted to non-employees in 2018, 2017 or 2016. The options that were granted to non-employees in 2015 were fully vested as of December 31, 2018. RSU activity for the year ended December 31, 2018 is summarized as follows:
|  | RSUs |  |  | Average Grant Date Fair Value (in dollars per share) |
Outstanding as of January 1, 2018 |  |  | 154,459 |  |  |  | 29.05 |
Granted |  |  | 313,747 |  |  |  | 40.17 |
Vested |  |  | (38,594 | ) |  |  | 26.30 |
Forfeited |  |  | (21,091 | ) |  |  | 37.27 |
RSUs Outstanding at December 31, 2018 |  |  | 408,521 |  |  | $ | 37.16 |
RSUs generally vest over periods of one to four years. RSUs that are forfeited are available to be granted again. As of December 31, 2018, the unrecognized compensation cost related to outstanding options was $29.0 million for employees. The unrecognized compensation cost related to outstanding options for employees is expected to be recognized over a weighted-average period of approximately 2.8 years. For the years ended December 31, 2018, 2017 and 2016, the weighted-average grant date fair value per granted option was $27.90, $16.58 and $30.23, respectively. The aggregate fair value of options that vested during the years ended December 31, 2018, 2017 and 2016, was $9.3 million, $11.5 million and $4.7 million, respectively. The unrecognized compensation costs related to outstanding RSUs was $11.5 million as of December 31, 2018, and is expected to be recognized over a weighted-average period of approximately 2.89 years. The total fair value of RSUs vested during the years ended December 31, 2018 and 2017 was $1.8 million and $0.4 million, respectively. No RSUs vested during the year ended December 31, 2016. Share-based compensation expense for the years ended December 31, 2018, 2017 and 2016 is classified as operating expenses in the consolidated statements of operations and comprehensive loss as follows:
|  | For the Year Ended December 31, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
|  | (in thousands) |
Research and development expenses |  | $ | 9,172 |  |  | $ | 7,670 |  |  | $ | 4,936 |
General and administrative expenses |  |  | 6,424 |  |  |  | 4,473 |  |  |  | 1,911 |
Total share-based compensation expense |  | $ | 15,596 |  |  | $ | 12,143 |  |  | $ | 6,847 |
Of the total share-based compensation expense recorded for the years ended December 31, 2018, 2017 and 2016, $1.4 million, $2.9 million and $2.7 million, respectively, related to options granted to non-employees, all of which is included in research and development expenses on the consolidated statements of operations and comprehensive loss.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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