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Stock Plans and Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Stock Plans and Stock-Based Compensation | Note 9: Stock Plans and Stock-Based Compensation Stock Plans The Company grants awards to employees and nonemployees under a series of equity incentive plans, (collectively, the Stock Plans). In May 2015, the Company adopted the 2015 Stock Plan, which was amended and restated in November 2015 (as amended from time to time, the 2015 Plan). The terms of the 2015 Plan permitted option holders to exercise stock options before they vest, subject to certain limitations. Such unvested shares are subject to repurchase by the Company at the original exercise price in the event the option holder’s service to the Company is terminated either voluntarily or involuntarily. As a result of early exercises under the 2015 Plan, approximately 165,133 and 455,158 shares had not vested and were subject to repurchase as of December 31, 2020 and 2019, respectively. The Company treats cash received from the exercise of unvested options as a refundable deposit and classifies such amounts as a liability in its consolidated balance sheets. As of December 31, 2020 and 2019, the Company included cash received for the early exercise of unvested options of $0.7 million and $1.7 million, respectively, allocated to other current and long-term liabilities based on the timing of their expected vesting. Amounts included in liabilities are transferred into common stock and additional paid-in capital as the shares vest, which is generally over a period of 48 months. In March 2018, the Company adopted the 2018 Equity Incentive Plan (2018 Plan), which replaced the 2015 Plan upon completion of the IPO. 3,570,000 shares were reserved under the 2018 Plan plus 709,558 shares remaining available for issuance under the Company’s 2015 Plan and outstanding awards under its 2015 Plan that subsequently expire, lapse unexercised or are forfeited to or repurchased by the Company. In addition, the number of shares reserved for issuance under our 2018 Plan will automatically increase on January 1 of each year beginning January 1, 2019 by a number equal to the smallest of (i) 3,570,000 shares, (ii) 4% of the shares of common stock outstanding on the last business day of the prior fiscal year or (iii) the number of shares determined by our board of directors. As of December 31, 2020, there were 1,106,209 shares available for grant under the 2018 plan. In accordance with the provisions of the 2018 Plan, the number of shares available for issuance under the Plan automatically increased by 2,604,587 shares on January 1, 2021. In January 2020, the Company’s Board of Directors adopted the 2020 Inducement Plan (2020 Plan), pursuant to which it reserved and authorized 3,000,000 shares of the Company’s common stock in order to award non-statutory stock options and other equity-based awards as a material inducement to eligible individuals to enter into employment with the Company. In November 2020, the Company’s Board of Directors authorized an increase of 1,000,000 shares reserved for issuance under the 2020 Plan. As of December 31, 2020 there were 784,975 shares available for grant under the 2020 Plan. The following table, which includes options granted under the Company’s Stock Plans, summarizes option activity:
|  | Shares Subject to Outstanding Options |  |  | Weighted Average Exercise Price Per Share |  |  | Weighted Average Remaining Contractual Term (in years) |  |  | Aggregate Intrinsic Value (in thousands) |
Outstanding at December 31, 2019 |  |  | 4,738,004 |  |  | $ | 9.00 |  |  |  |  |  |  |  |  |
Options granted |  |  | 5,784,550 |  |  | $ | 17.36 |  |  |  |  |  |  |  |  |
Options exercised |  |  | (392,523 | ) |  | $ | 8.54 |  |  |  |  |  |  |  |  |
Options forfeited or canceled |  |  | (237,334 | ) |  | $ | 10.38 |  |  |  |  |  |  |  |  |
Outstanding at December 31, 2020 |  |  | 9,892,697 |  |  | $ | 13.88 |  |  |  | 8.81 |  |  | $ | 122,232 |
Options vested and expected to vest as of December 31, 2020 |  |  | 9,892,697 |  |  | $ | 13.88 |  |  |  | 8.81 |  |  | $ | 122,232 |
Options exercisable as of December 31, 2020 |  |  | 2,793,050 |  |  | $ | 10.28 |  |  |  | 8.12 |  |  | $ | 44,012 |
During the years ended December 31, 2020, 2019 and 2018, the intrinsic value of shares exercised was $6.8 million, $0.2 million and $0.6 million, respectively, and the fair value of shares vested during the same period was $16.8 million, $7.8 million and $3.0 million, respectively. Restricted Stock Units and Restricted Stock Awards In 2015, in conjunction with the incorporation of the Company, the Company issued a total of 2,777,776 shares of common stock at $0.0004 per share to its two founders, the Chief Executive Officer and the President, under restricted stock agreements. At the date of grant, the shares had an estimated fair value of $0.0004 per share. Under the terms of the restricted stock agreements, shares vested monthly over four years. There were no shares granted under restricted stock agreements during the years ended December 31, 2020, 2019, and 2018. The total grant date fair value of shares vested during the same periods was immaterial. All shares were vested as of December 31, 2020. The Company granted restricted stock units (RSUs) to its employees and directors under the 2018 Plan. The shares subject to the RSUs vest annually or quarterly over four years for employees and annually for directors.
|  | Total Restricted Stock Units |  |  | Weighted Average Grant Date Fair Value |
Nonvested at December 31, 2019 |  |  | - |  |  | $ | - |
RSUs granted |  |  | 758,950 |  |  |  | 27.77 |
RSUs vested |  |  | (6,250 | ) |  |  | 17.00 |
RSUs forfeited or canceled |  |  | (14,050 | ) |  |  | 29.05 |
Nonvested at December 31, 2020 |  |  | 738,650 |  |  | $ | 27.84 |
During the year ended December 31, 2020, the total grant date fair value of shares granted under RSUs was $21.1 million. The total grant date fair value of shares vested during the same period was $0.1 million. There were no RSUs granted or vested during the years ended December 31, 2019 or 2018. Employee Stock Purchase Plan In March 2018, the Company adopted the 2018 Employee Stock Purchase Plan (2018 ESPP). The 2018 ESPP provides eligible employees with the opportunity to purchase shares of common stock through payroll deductions at a price equal to 85% of the lower of the fair market value per share on the first trading day of the applicable 24-month offering period or the fair market value per share on the applicable purchase date, provided that no more than 3,000 shares of common stock may be purchased by an employee on any purchase date. Also, the value of the shares purchased in any calendar year may not exceed $25,000. The 2018 ESPP is intended to constitute an “employee stock purchase plan” under Section 423(b) of the Internal Revenue Code of 1986, as amended. The 2018 ESPP may be terminated by the Company’s board of directors at any time. A total of 714,000 shares of common stock were initially reserved for issuance under the 2018 ESPP, and the number of shares reserved for issuance under the 2018 ESPP will automatically increase on January 1 of each year beginning on January 1, 2019 by a number of shares equal to the least of (i) 1% of our outstanding shares of common stock on the last day of the prior fiscal year, (ii) 1,071,000 shares or (iii) a number of shares determined by our board of directors. As of December 31, 2020, there were 1,190,422 shares available for purchase under the 2018 ESPP. In accordance with the provisions of the 2018 ESPP, the number of shares available for purchase under the Plan automatically increased by 651,146 shares on January 1, 2021. Non-employee stock-based compensation As of December 31, 2020, 2019 and 2018, 31,986, 372,774 and 14,918 respectively, of vested stock options and 21,165, 308,596, and 31,388, respectively, of unvested stock options were held by non-employees. The amount of stock-based compensation expense related to non-employees recognized in the consolidated financial statements for the years ended December 31, 2020, 2019 and 2018 was $0.7 million, $0.9 million and $0.3 million, respectively. Stock-based compensation expense The following table summarizes employee and non-employee stock-based compensation expense for the years ended December 31, 2020, 2019 and 2018, and also the allocation within the consolidated statements of operations and comprehensive loss (in thousands):
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Research and development |  | $ | 11,195 |  |  | $ | 4,152 |  |  | $ | 2,255 |
General and administrative |  |  | 10,630 |  |  |  | 4,829 |  |  |  | 1,619 |
Total stock-based compensation |  | $ | 21,825 |  |  | $ | 8,981 |  |  | $ | 3,874 |
As of December 31, 2020, unrecognized employee and nonemployee compensation costs related to non-vested stock option awards and RSUs totaled $88.9 million, and is expected to be recognized over a weighted average period of 2.9 years. Valuation Assumptions Prior to the Company’s IPO, the fair value of the shares of common stock underlying stock-based awards was determined by the board of directors, with input from management. Because there was no public market for the Company’s common stock, the board of directors determined the fair value of the common stock on the grant-date of the stock-based award by considering a number of objective and subjective factors, including enterprise valuations of the Company’s common stock performed by an unrelated third-party specialist, valuations of comparable companies, sales of the Company’s convertible preferred stock to unrelated third parties, operating and financial performance, the lack of liquidity of the Company’s capital stock, and general and industry-specific economic outlook. The board of directors intended all options granted to be exercisable at a price per share not less than the estimated per share fair value of common stock underlying those options on the date of grant. Following the Company’s IPO, the market traded price of the shares of common stock underlying the stock-based awards is the fair value of our stock as reported on the New York Stock Exchange on the grant date. Company estimates the fair value of options and ESPP shares utilizing the Black-Scholes option pricing model, which is dependent upon several variables, such as expected term, volatility, risk-free interest rate, and expected dividends. Each of these inputs is subjective and generally requires significant judgment to determine. The following assumptions were used to calculate the fair value of stock-based compensation for the years ended December 31, 2020, 2019, and 2018:
|  | Stock Options |
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Risk-free interest rate |  | 0.4% - 0.5% |  |  | 1.6% - 2.3% |  |  | 1.2% - 3.1% |
Expected term (in years) |  | 6.02 |  |  | 6.02 |  |  | 5.16-9.95 |
Volatility |  | 76.5% - 78.5% |  |  | 71.8% - 74.6% |  |  | 58.7%-75.5% |
Dividend yield |  | 0% |  |  | 0% |  |  | 0% |
|  | ESPP |
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Risk-free interest rate |  | 0.1% - 0.2% |  |  | 1.6% - 2.3% |  |  | 2.1% - 2.6% |
Expected term (in years) |  | 0.5-2.0 |  |  | 0.5-2.0 |  |  | 0.5-2.0 |
Volatility |  | 66.6% - 136.0% |  |  | 64.8% - 77.1% |  |  | 54.3% - 65.5% |
Dividend yield |  | 0% |  |  | 0% |  |  | 0% |
Expected Term — The Company has opted to use the “simplified method” for estimating the expected term of options, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option (generally 10 years). Expected Volatility — Due to the Company’s limited operating history and a lack of company specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. Risk-Free Interest Rate — The risk-free rate assumption is based on the U.S. treasury yield in effect at the time of grant for instruments with maturities similar to the expected term of the Company’s stock options. Expected Dividend — The Company has not issued any dividends in its history and does not expect to issue dividends over the life of the options and therefore has estimated the dividend yield to be zero.

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