Equity

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Common Stock

As of December 31, 2022 and 2021, the Company had authorized 200,000,000 shares of common stock, at a $0.001 par value per share. The holders of shares of common stock are entitled to one vote for each share of common stock held at all meetings of stockholders and written actions in lieu of meetings. The holders of shares of common stock are entitled to receive dividends, if and when declared by the Board of Directors. No dividends have been declared or paid by the Company since its inception.

In September 2021, in connection with the Pfizer Stock Purchase Agreement, the Company issued 3,457,815 shares of common stock to Pfizer at a price of $101.22 per share, which resulted in aggregate gross proceeds of $350 million, less financial advisor fees of $4.6 million, as further described in Note 3 to our consolidated financial statements. Pursuant to terms of the Pfizer Stock Purchase Agreement, Pfizer has agreed not to sell or transfer the Shares without prior written approval of the Company for a specified period, subject to specified exceptions.

In December 2020, the Company completed a public offering in which the Company issued and sold 6,571,428 shares of common stock at a public offering price of $70.00 per share, which resulted in aggregate gross proceeds of $460.0 million before underwriter discounts, commissions, and offering costs of $28.1 million.

Equity Distribution Agreements

In August 2021, the Company entered into an Equity Distribution Agreement with Piper Sandler & Company (“Piper Sandler”) and Cantor Fitzgerald & Co. (“Cantor”), as agents, pursuant to which the Company may offer and sell from time to time, through the agents, up to $300.0 million of the common stock registered under the universal shelf registration statement pursuant to one or more “at-the-market" offerings. During the years ended December 31, 2022 and 2021, no shares were issued under this agreement.

In October 2019, the Company entered into an Equity Distribution Agreement (the "Distribution Agreement") with Piper Sandler, pursuant to which the Company could offer and sell from time-to-time in an “at-the-market offering,” at its option, up to an aggregate of $100.0 million of shares of the Company’s common stock through Piper Sandler, as sales agent. During year ended December 31, 2020, the Company sold 2,593,637 shares of its common stock resulting in proceeds to the Company of $64.1 million, net of offering costs of $1.6 million. The Company terminated the Distribution Agreement in August 2021.

Share-based Compensation

2018 Employee Stock Purchase Plan

In September 2018, the Company adopted the 2018 Employee Stock Purchase Plan (the "2018 ESPP"), with the first offering period under the 2018 ESPP commencing on January 1, 2020, by initially providing participating employees with the opportunity to purchase an aggregate of 311,850 shares of the Company's common stock. The number of shares of the Company's common stock reserved for issuance under the 2018 ESPP increased, pursuant to the terms of the 2018 ESPP, by additional shares equal to 1% of the Company’s then-outstanding common stock, effective as of January 1 of each year. As of December 31, 2022, 1,986,565 shares remained available for purchase. During the years ended December 31, 2022, 2021 and 2020, the Company issued 24,898, 19,357 and 11,046 shares, respectively, of common stock under the 2018 ESPP.

Incentive Share Plan

In the Fourth Amendment to the Company’s Incentive Share Plan (the "Incentive Plan") adopted in March 2018, the Company was authorized to issue up to an aggregate of 6,199,477 incentive units pursuant to the Incentive Plan. Generally, incentive units were granted at no less than fair value as determined by the board of managers and had vesting periods ranging from one to four years. The Incentive Plan was terminated in September 2018. In September 2018, each outstanding incentive unit was converted into a number of shares of common stock based upon the IPO price. Certain of the shares of common stock issued in respect of incentive units continued to be subject to vesting in accordance with the vesting schedule that was applicable to such incentive units through the year ended December 31, 2022.

2018 Stock Incentive Plan

In September 2018, the Company’s board of directors adopted, and the Company’s stockholders approved, the 2018 Stock Incentive Plan (the "2018 Plan"), which became effective upon the effectiveness of the registration statement on Form S-1 for the Company’s IPO. The number of common shares initially available for issuance under the 2018 Plan equaled the sum of (1) 4,067,007 shares of common stock; plus (2) the number of shares of common stock (up to 1,277,181 shares) issued in respect of incentive units granted under the Incentive Plan that were subject to vesting immediately prior to the effectiveness of the registration statement that expire, terminate or are otherwise surrendered, cancelled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right; plus (3) an annual increase on the first day of each year beginning with the year ended December 31, 2019 and continuing to, and including, the year ending December 31, 2028, equal to the lesser of 4,989,593 shares of the Company’s common stock, 4% of the number of shares of the Company’s common stock outstanding on the first day of the year or an amount determined by the Company’s board of directors. As of December 31, 2022, 2,048,284 shares are available for issuance under the 2018 Plan. Common shares subject to outstanding equity awards that expire or are terminated, surrendered, or cancelled without having been fully exercised or are forfeited in whole or in part are available for future grants of awards.

Compensation Expense

For the years ended December 31, 2022, 2021 and 2020, the Company recognized compensation expense of $75.5 million, $57.1 million and $30.2 million, respectively, related to the issuance of incentive awards, including $0.7 million, $0.3 million and $0.3 million, respectively, related to the 2018 ESPP. As of December 31, 2022, there was $67.3 million of compensation expense that is expected to be recognized over a weighted average period of approximately 1.7 years.

Stock Options

The fair value of the stock options granted during each of the years ended December 31, 2022, 2021 and 2020 was determined using the Black-Scholes option pricing model at the grant date with the following range of assumptions:


	Year ended December 31,
	2022		2021		2020
Expected volatility	73% - 76%		74% - 78%		70% - 75%
Expected term (years)	5.5 - 7.0		5.3 - 7.0		5.3 - 7.0
Risk free interest rate	1.5% - 4.2%		0.5% - 1.3%		0.3% - 1.6%
Expected dividend yield	0	%	0	%	0	%
Exercise price	$36.79 - $78.91		$66.82 - $100.40		$22.70 - $50.00

Given the Company’s common stock has not been trading for a sufficient period of time, the Company calculates volatility of its common stock by utilizing a weighted average of a collection of peer company volatilities and its own common stock volatility. The expected term is calculated utilizing the simplified method.

A summary of the stock option activity under the 2018 Plan as of December 31, 2022 is presented below. These amounts include stock options granted to employees, directors and consultants.


(dollars in millions, except weighted average exercise price)	Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding as of December 31, 2021	5,343,254	$	44.98
Granted	1,889,501	$	59.23
Exercised	(184,160)	$	19.49
Forfeited	(233,961)	$	61.29
Outstanding as of December 31, 2022	6,814,634	$	49.06	7.7	$	34.5
Exercisable as of December 31, 2022	3,601,334	$	37.22	6.8	$	33.0

The weighted-average grant date fair value of options granted during the years ended December 31, 2022, 2021 and 2020 was $39.17, $52.85 and $27.45, respectively. The total intrinsic value of options exercised during the years ended December 31, 2022, 2021 and 2020 was $7.9 million, $46.9 million and $19.4 million, respectively.

As of December 31, 2022, $53.8 million of total unrecognized compensation cost related to non-vested stock options granted under the 2018 Plan is expected to be recognized over a weighted average period of approximately 1.6 years.

As of December 31, 2022, there were 6,540,844 stock options under the 2018 Plan that have vested or are expected to vest.

Restricted Stock Awards

A summary of the restricted stock award activity under the Incentive Plan as of December 31, 2022 is presented below. These amounts include restricted stock granted to employees, directors and consultants.


	Shares	Weighted Average Grant Date Fair Value Per Share
Unvested restricted stock as of December 31, 2021	30,625	$	16.00
Vested	(29,305)	$	16.00
Forfeited	(1,320)	$	16.00
Unvested restricted stock as of December 31, 2022	—	$	16.00

Restricted Stock Units

A summary of restricted stock unit activity under the 2018 Plan for the year ended December 31, 2022 is presented below. These amounts include restricted stock units granted to employees.


	Shares	Weighted Average Grant Date Fair Value Per Share
Unvested restricted stock units as of December 31, 2021	88,307	$	20.02
Granted	460,763	$	54.59
Exercised	(42,500)	$	20.04
Forfeited	(17,354)	$	53.91
Unvested restricted stock units as of December 31, 2022	489,216	$	51.37

As of December 31, 2022, $13.5 million of total unrecognized compensation cost related to non-vested restricted stock units granted under the 2018 Plan is expected to be recognized over a weighted average period of approximately 2.1 years.

As of December 31, 2022, there were 414,450 restricted stock units under the 2018 Plan that have vested or are expected to vest.