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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | 13. Stock-Based Compensation In September 2015, the Company’s board of directors adopted its 2015 Omnibus Incentive Plan (“2015 Plan”), which was subsequently approved by its stockholders and became effective upon the closing of the IPO on March 8, 2016. The 2015 Plan replaced the 2007 Stock Plan (“2007 Plan”) and allows for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, unrestricted stock, stock units, dividend equivalent rights, performance awards, annual incentive awards, and other equity-based awards to the Company’s executives and other employees, non-employee members of the board of directors, and consultants of the Company. Any options or awards outstanding under the Company’s 2007 Plan remain outstanding and continue to govern the terms of any equity grants that remain outstanding under the 2007 Plan. Any shares of common stock related to awards outstanding under the 2007 Plan that thereafter terminate by expiration, forfeiture, cancellation or otherwise without the issuance of such shares will be added to, and included in, the 2015 Plan reserve amount. The Company initially reserved 1,750,000 shares of its common stock for the issuance of awards under the 2015 Plan. The 2015 Plan provides that the number of shares reserved and available for issuance under the 2015 Plan will automatically increase each January 1, beginning on January 1, 2017, by 4% of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the Company’s board of directors. On January 1, 2024, the shares available for issuance under the 2015 was increased to 3,393,065. In February 2023, the Company's board of directors adopted its 2023 Inducement Plan (the “2023 Inducement Plan”), which became effective March 1, 2023. The 2023 Inducement Plan allows for the granting of nonqualified stock options, restricted stock units, and other awards under the 2023 Inducement Plan to persons not previously an employee or director of the Company, or following a bona fide period of non-employment, an inducement material to such persons entering into employment with the Company. The Company initially reserved 1,900,000 shares of its common stock for the issuance of awards under the 2023 Inducement Plan. On December 6, 2023, the Company's board of directors increased the reserve by 1,100,000 shares. As of December 31, 2023, there were 2,191,732 shares available for issuance under the 2015 Plan and 1,211,650 shares available for issuance under the 2023 Inducement Plan. The Company recognized stock-based compensation expense related to the issuance of stock option awards to employees and non-employees and related to the Employee Stock Purchase Plan in the consolidated statements of operations as follows (in thousands):
|  | Years Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Research and development |  | $ | 14,147 |  |  | $ | 6,016 |  |  | $ | 4,398 |
Selling, general and administrative |  |  | 16,804 |  |  |  | 10,003 |  |  |  | 8,919 |
Total |  | $ | 30,951 |  |  | $ | 16,019 |  |  | $ | 13,317 |
Stock Options and Restricted Stock Units As of December 31, 2023, there was $74.8 million of unrecognized compensation cost related to employee and non-employee unvested stock options and RSUs granted under the 2015 Plan and the 2023 Inducement Plan, which is expected to be recognized over a weighted-average remaining service period of 2.8 years. Stock compensation costs have not been capitalized by the Company. Our stock-based awards are subject to either service or performance-based vesting conditions. Compensation expense related to awards to employees, directors and non-employees with service-based vesting conditions is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. Compensation expense related to awards to employees with performance-based vesting conditions is recognized based on the grant date fair value over the requisite service period using the straight-line method to the extent achievement of the performance condition is probable. In 2019, the Company granted to certain employees 583,000 stock options that contain performance-based vesting criteria (“2019 Performance Awards”), primarily related to the achievement of certain clinical and regulatory development milestones related to product candidates. In the fourth quarter of 2020, one performance milestone, for the 2019 Performance Awards, was achieved. The Company recorded approximately $128,000 of stock compensation related to the achievement of the performance milestone for years ended December 31, 2022. As of December 31, 2022, all other performance milestones were not achieved, and the associated awards have been cancelled. In 2022, the Company granted to certain employees 140,000 performance-based stock options (“2022 Performance Awards”), primarily related to the achievement of certain regulatory development milestones related to product candidates. Recognition of stock-based compensation expense associated with these performance-based stock options commences when the performance condition is considered probable of achievement, using management’s best estimates, which consider the inherent risk and uncertainty regarding the future outcomes of the milestones. In the first quarter of 2022, management estimated one of the milestones, for the 2022 Performance Awards, was probable of achievement. The Company recorded approximately $258,000 and $479,000 of stock compensation expense for these awards for the year ended December 31, 2023 and 2022, respectively. As of December 31, 2023, 140,000 stock options outstanding were unvested, and no options had been cancelled. In the first quarter of 2023, the Company granted to certain employees 129,550 performance-based RSUs, primarily related to the achievement of certain regulatory development milestones related to product candidates. Recognition of stock-based compensation expense associated with these performance-based RSUs commences when the performance condition is considered probable of achievement, using management’s best estimates, which consider the inherent risk and uncertainty regarding the future outcomes of the milestones. In October 2021, in connection with the retirement of two employees, the Company entered into severance and consulting agreements. Under these agreements the Company extended the vesting term for an aggregate of 34,728 unvested options, which would not have otherwise vested and extended the exercise period of the vested options post termination of the consulting agreement. The Company accounted for the change as a modification of an equity award under ASC 718. As a result of the modifications, the Company recognized approximately $0.8 million of incremental stock compensation expense in 2021. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model with the weighted-average assumptions noted in the table below. Expected volatility for the Company’s common stock was determined based on an average of the historical volatility of the Company's public stock price. The Company estimated the expected term of its employee stock options using the “simplified” method, whereby, the expected term equals the average of the vesting term and the original contractual term of the option. The contractual life of the option was used for the estimated life of the non-employee grants. The assumed dividend yield is based upon the Company’s expectation of not paying dividends in the foreseeable future. The risk-free interest rate for periods within the expected life of the option is based upon the U.S. Treasury yield curve in effect at the time of grant. The Company accounts for forfeitures when they occur. The grant date fair values of options issued to employees and non-employees were estimated using the Black-Scholes option-pricing model with the following assumptions:
|  | Years Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Expected term (in years) |  |  | 6.03 |  |  |  | 6.04 |  |  |  | 6.02 |
Volatility rate |  |  | 75.13 | % |  |  | 77.87 | % |  |  | 85.84 | %
Risk-free interest rate |  |  | 3.65 | % |  |  | 2.52 | % |  |  | 0.67 | %
Expected dividend yield |  |  | 0.00 | % |  |  | 0.00 | % |  |  | 0.00 | %
A summary of employee and non-employee option activity under the Company’s equity award plans is presented below (in thousands, except share data):
|  | Number of Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (in years) |  |  | Aggregate Intrinsic Value |
Outstanding—January 1, 2023 |  |  | 7,981,677 |  |  | $ | 14.42 |  |  |  | 7.3 |  |  | $ | 88,016 |
Granted |  |  | 3,800,691 |  |  | $ | 23.75 |  |  |  |  |  |  |
Exercised |  |  | (662,042 | ) |  | $ | 8.08 |  |  |  |  |  |  |
Cancelled, forfeited or expired |  |  | (435,468 | ) |  | $ | 23.14 |  |  |  |  |  |  |
Outstanding—December 31, 2023 |  |  | 10,684,858 |  |  | $ | 17.78 |  |  |  | 7.3 |  |  | $ | 55,091 |
Exercisable—December 31, 2023 |  |  | 5,468,638 |  |  | $ | 14.32 |  |  |  | 5.7 |  |  | $ | 43,160 |
Options vested, or expected to vest—December 31, 2023 |  |  | 10,684,858 |  |  | $ | 17.78 |  |  |  | 7.3 |  |  | $ | 55,091 |
The weighted-average grant date fair value of options granted during the years ended December 31, 2023, 2022 and 2021, was $16.20, $12.64, and $14.70 per share, respectively. The fair value is being expensed over the vesting period of the options (usually three to four years) on a straight-line basis as the services are being provided. There were 662,042 options exercised for the year ended December 31, 2023, resulting in total proceeds of $5.1 million; 1.3 million options exercised for the year ended December 31, 2022, resulting in total proceeds of $11.5 million; and 842,424 options exercised for the year ended December 31, 2021, resulting in total proceeds of 6.3 million. The intrinsic value of options exercised during the years ended December 31, 2023, 2022 and 2021 was $9.5 million, $17.0 million, and $10.1 million, respectively. In accordance with the Company’s policy, the shares were issued from a pool of shares reserved for issuance under the 2015 Plan and 2023 Inducement Plan. Restricted Stock Units RSUs awarded to Board of Directors or employees vest on either i) one – year anniversary date of the related grant or ii) 25% on each anniversary for 4 years. The following table summarizes our RSU activity:
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |  |
Unvested—December 31, 2022 |  |  | 224,788 |  |  | $ | 18.02 |  |
Granted (1) |  |  | 308,550 |  |  | $ | 24.94 |  |
Vested |  |  | (9,102 | ) |  | $ | 13.87 |  |
Cancelled/Forfeited |  |  | (4,800 | ) |  | $ | 20.36 |  |
Unvested—December 31, 2023 |  |  | 519,436 |  |  | $ | 22.17 |  |
(1) RSUs granted in 2023 and 2022 had a weighted average grant date fair value of $24.94 and $15.79, respectively. The fair values of RSUs vested in 2023 and 2022 totaled $126,000 and $705,000, respectively. Employee Stock Purchase Plan In September 2015, the Company’s Board adopted the ESPP, which was subsequently approved by the Company’s stockholders and became effective in 2016. The ESPP authorized the initial issuance of up to a total of 250,000 shares of common stock to the Company’s employees. The number of shares of common stock available under the ESPP will automatically increase on January 1st of each year, continuing until the expiration of the ESPP, in an amount equal to the lesser of (a) 1% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year, or (b) 250,000 shares. On January 1, 2024, the shares of common stock reserved for issuance under the ESPP was increased to 1,982,614. Under the terms of the ESPP, eligible employees can elect to acquire shares of the Company’s common stock through periodic payroll deductions during a series of six-month offering periods. Purchases under the ESPP are affected on the last business day of each offering period at a 15% discount to the lower of closing price on that day or the closing price on the first day of the offering period. The Company issued 34,797 and 28,999 shares during 2023 and 2022, respectively. The ESPP is considered a compensatory plan with the related compensation cost expensed over the six-month offering period. For the years ended December 31, 2023, 2022 and 2021 the Company recorded stock-based compensation expense related to the ESPP of $308,000, $166,000, and $175,000 respectively. Employee Benefit Plan The Company has a Section 401(k) defined contribution savings plan for its employees. The plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pretax basis, subject to legal limitations. Company contributions to the plan may be made at the discretion of the Board. For the years ended December 31, 2023, 2022 and 2021, the Company made $1.3 million, $712,000, and $444,000 contributions to the plan, respectively.

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