Equity Plans and Stock-Based Compensation

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement, Noncash Expense [Abstract]

Equity Plans and Stock-Based Compensation

11. Equity Plans and Stock-Based Compensation

In May 2022, our stockholders approved the amendment and restatement of our 2018 Equity Incentive Plan (the “Amended 2018 EIP”) to, among other things, increase the authorized number of shares of common stock by 15,000,000. The maximum number of shares of common stock that may be issued under the Amended 2018 EIP, will not exceed 32,600,000 shares of common stock. As of June 30, 2022, the Amended 2018 EIP and the Amended and Restated 2014 Employee Stock Purchase Plan are our active plans.

The Amended 2018 EIP is administered by our Board of Directors, or a designated committee of the Board of Directors, and awards granted under the Amended 2018 EIP have a term of 7 years unless earlier terminated by the Board of Directors. As of June 30, 2022, there were 15,465,070 shares of common stock reserved for issuance under the Amended 2018 EIP.

Activity under our stock plans is set forth below:


	Shares Underlying Outstanding Options (in thousands)			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Balance as of December 31, 2021		10,399		$	11.55		4.16		42,756
Options granted		2,053			12.54
Options exercised		(287	)		7.49
Options cancelled:
Options forfeited (unvested)		(73	)		9.52
Options expired (vested)		(566	)		20.63
Balance at June 30, 2022		11,526			11.40		4.37		31,382
Vested and expected to vest at June 30, 2022		11,146		$	11.37		4.31	$	30,946
Exercisable at June 30, 2022		6,542		$	11.52		3.09	$	21,654

Restricted stock unit activity under our stock-based compensation plans during the six months ended June 30, 2022 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, 2021		2,651		$	8.30
Granted		2,021			12.42
Vested		(1,009	)		8.21
Forfeited		(168	)		10.40
Non-vested as of June 30, 2022		3,495			10.60

We granted performance-based restricted stock unit (“PSU”) to certain executives. These PSUs vest upon a specified market condition. The summary of PSU activities for the six months ended June 30, 2022 is as follows:


	Number of Shares (in thousands)			Weighted-Average Grant-Date Fair Value Per Share
Non-vested as of December 31, 2021		237		$	8.40
Granted		193			11.62
Vested		(237	)		8.40
Non-vested as of June 30, 2022		193		$	11.62

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 of each RSU is determined at the date of grant using our closing stock price. The fair value of each PSU is estimated using the Monte Carlo simulation method on the date of grant. The weighted-average assumptions used in the calculations of these fair value measurements are as follows:


	Stock Options						Stock Options						Market-Based Performance Stock Unit (“PSUs”)
	Three Months Ended						Six Months Ended						Six Months Ended
	June 30,						June 30,						June 30
	2022			2021			2022			2021			2022
Weighted-average fair value per share	$	7.39		$	6.20		$	7.97		$	6.57		$	11.62
Risk-free interest rate		2.9	%		0.9	%		2.01	%		0.6	%		1.7	%
Expected life (in years)		4.5			4.5			4.5			4.5			2.9
Volatility		0.8			0.9			0.8			1.0			0.9

The components of stock-based compensation expense were as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Research and development	$	1,463	$	937	$	2,739	$	1,809
Selling, general and administrative		5,597		3,445		11,024		6,589
Cost of sales - product		143		155		303		324
Inventory		726		487		1,509		1,025
Total	$	7,929	$	5,024	$	15,575	$	9,747

Compensation expense is based on awards ultimately expected to vest and reflects estimated forfeitures.