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Equity Plans and Stock-Based Compensation | 6 Months Ended
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Jun. 30, 2019
Share Based Compensation [Abstract] |
Equity Plans and Stock-Based Compensation | 12. Equity Plans and Stock-Based Compensation Our 2018 Equity Incentive Plan (the “2018 EIP”) is intended to be the successor to and continuation of the Dynavax Technologies Corporation 2011 Equity Incentive Plan (the “2011 EIP”). The aggregate number of shares of our common stock that may be issued under the 2018 EIP (subject to adjustment for certain changes in capitalization) is comprised of the sum of (i) 5,000,000 newly reserved shares of common stock, (ii) 140,250 unallocated shares of common stock remaining available for grant under the 2011 EIP as of May 31, 2018, and (iii) 7,477,619 shares subject to outstanding stock awards granted under the 2011 EIP and the Dynavax Technologies Corporation 2017 Inducement Award Plan that may become available from time to time as set forth in the 2018 EIP. The 2018 EIP provides for the issuance of up to 12,617,869 shares of our common stock to our employees and directors. On May 30, 2019, our stockholders approved an amendment to 2018 Equity Incentive Plan (the “Amended 2018 EIP”) to, among other things, increase the aggregate number of shares of common stock authorized for issuance by 2,300,000. Under the Amended 2018 EIP, the aggregate number of shares of our common stock that may be issued to employees and directors (subject to adjustment for certain changes in capitalization) is 14,917,869. Option activity under our stock-based compensation plans during the six months ended June 30, 2019 was as follows (in thousands except per share amounts):
|  | Shares Underlying Outstanding Options (in thousands) |  |  | Weighted-Average Exercise Price Per Share |  |  | Weighted-Average Remaining Contractual Term (years) |  |  | Aggregate Intrinsic Value (in thousands) |
Balance at December 31, 2018 |  |  | 5,750 |  |  | $ | 18.20 |  |  |  |  |  |  |  |  |
Options granted |  |  | 2,925 |  |  |  | 7.04 |  |  |  |  |  |  |  |  |
Options exercised |  |  | (10 | ) |  |  | 5.75 |  |  |  |  |  |  |  |  |
Options cancelled: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Options forfeited (unvested) |  |  | (142 | ) |  |  | 13.98 |  |  |  |  |  |  |  |  |
Options expired (vested) |  |  | (105 | ) |  |  | 17.55 |  |  |  |  |  |  |  |  |
Balance at June 30, 2019 |  |  | 8,418 |  |  | $ | 14.42 |  |  |  | 5.13 |  |  | $ | 199 |
Vested and expected to vest at June 30, 2019 |  |  | 7,970 |  |  | $ | 14.75 |  |  |  | 5.07 |  |  | $ | 173 |
Exercisable at June 30, 2019 |  |  | 3,893 |  |  | $ | 19.14 |  |  |  | 4.17 |  |  | $ | - |
Restricted stock unit activity under our stock-based compensation plans during the six months ended June 30, 2019 was as follows (in thousands except per share amounts):
| Number of Shares (In thousands) |  |  | Weighted-Average Grant-Date Fair Value Per Share |
Non-vested as of December 31, 2018 |  | 1,594 |  |  | $ | 8.82 |
Granted |  | 1,822 |  |  |  | 8.80 |
Vested |  | (826 | ) |  |  | 6.79 |
Forfeited |  | (59 | ) |  |  | 11.74 |
Non-vested as of June 30, 2019 |  | 2,531 |  |  | $ | 9.40 |
The aggregate intrinsic value of the restricted stock units outstanding as of June 30, 2019, based on our stock price on that date was $10.1 million. Fair value of restricted stock units is determined at the date of grant using our closing stock price. As of June 30, 2019, approximately 151,000 shares underlying stock options and approximately 191,000 restricted stock unit awards with performance-based vesting criteria were outstanding. We recognized stock-based compensation expense for awards with performance-based vesting criteria of $28,000 and $0.3 million for the three and six months ended June 30, 2019, respectively. Under our stock-based compensation plans, option awards generally vest over a three or four-year period contingent upon continuous service, and expire seven to ten years from the date of grant (or earlier upon termination of continuous service). The fair value-based measurement of each option is estimated on the date of grant using the Black-Scholes option valuation model. The fair value-based measurements and weighted-average assumptions used in the calculations of these measurements are as follows:
| Stock Options |  |  | Stock Options |  |  | Employee Stock Purchase Plan |
| Three Months Ended |  |  | Six Months Ended |  |  | Six Months Ended |
| June 30, |  |  | June 30, |  |  | June 30, |
| 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Weighted-average fair value per share | $ | 4.92 |  |  | $ | 11.37 |  |  | $ | 4.67 |  |  | $ | 11.12 |  |  | $ | 5.19 |  |  | $ | 10.39 |
Risk-free interest rate |  | 2.3 | % |  |  | 2.7 | % |  |  | 2.2 | % |  |  | 2.6 | % |  |  | 2.5 | % |  |  | 2.1 | %
Expected life (in years) |  | 4.5 |  |  |  | 4.5 |  |  |  | 4.5 |  |  |  | 4.5 |  |  |  | 1.2 |  |  |  | 1.3 |
Volatility |  | 0.9 |  |  |  | 0.9 |  |  |  | 0.9 |  |  |  | 0.9 |  |  |  | 0.8 |  |  |  | 1.1 |
The components of stock-based compensation expense were (in thousands):
| Three Months Ended |  |  | Six Months Ended |
| June 30, |  |  | June 30, |
| 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Research and development | $ | 1,976 |  |  | $ | 2,674 |  |  | $ | 4,156 |  |  | $ | 4,862 |
Selling, general and administrative |  | 2,470 |  |  |  | 2,997 |  |  |  | 5,550 |  |  |  | 5,585 |
Restructuring |  | 4,122 |  |  |  | - |  |  |  | 4,122 |  |  |  | - |
Cost of sales - product |  | 292 |  |  |  | 619 |  |  |  | 630 |  |  |  | 642 |
Inventory |  | 489 |  |  |  | - |  |  |  | 1,061 |  |  |  | - |
Total | $ | 9,349 |  |  | $ | 6,290 |  |  | $ | 15,519 |  |  | $ | 11,089 |
Compensation expense is based on awards ultimately expected to vest and reflects estimated forfeitures. Stock-based compensation cost for the three and six months ended June 30, 2019 include incremental cost of $4.1 million for accelerated vesting of stock awards and extension of exercise period of stock options for the retirement of our Chief Executive Officer. See Note 13. As of June 30, 2019, the total unrecognized compensation cost related to non-vested equity awards including all awards with time-based vesting amounted to $35.6 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.9 years. Additionally, as of June 30, 2019, the total unrecognized compensation cost related to equity awards with performance-based vesting criteria amounted to $1.7 million. Employee Stock Purchase Plan The Amended and Restated 2014 Employee Stock Purchase Plan (the “Purchase Plan”) provides for the purchase of common stock by eligible employees and became effective on May 28, 2014. On May 31, 2018, our stockholders approved an amendment to the Purchase Plan to increase the aggregate number of shares of common stock authorized for issuance by 600,000 shares. The purchase price per share is the lesser of (i) 85% of the fair market value of the common stock on the commencement of the offer period (generally, the sixteenth day in February or August) or (ii) 85% of the fair market value of the common stock on the exercise date, which is the last day of a purchase period (generally, the fifteenth day in February or August). For the six months ended June 30, 2019, employees have acquired 74,562 shares of our common stock under the Purchase Plan and 498,472 shares of our common stock remained available for future purchases under the Purchase Plan.

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