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Stock-Based Compensation | 6 Months Ended
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Jun. 30, 2024
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | Stock Based Compensation In June 2023, our Board of Directors (the Board) and stockholders approved the 2023 Equity Incentive Plan (the 2023 Plan), which became effective as of June 14, 2023. The Board and the requisite stockholders previously approved the 2013 Equity Incentive Plan (the 2013 Plan). We suspended the 2013 Plan, and no additional award may be granted under the 2013 Plan. The 2023 Plan reserve consists of 3,000,000 shares and the remaining available shares from the 2013 Plan as of the effective date of the 2023 Plan. In addition, any shares of common stock covered by awards granted under the 2013 Plan that terminate on or after June 14, 2023 by expiration, forfeiture, cancellation, or other means without the issuance of such shares will be added to the 2023 Plan reserve. The 2023 Plan does not include a provision for an automatic increase in shares, also known as an evergreen provision. As of June 30, 2024, the total number of shares of common stock available for issuance under the 2023 Plan is 18,721,104, which includes shares of common stock that were available for issuance under the prior Plans as of the effective date of the 2023 Plan. As of June 30, 2024, a total of 2,380,651 options have been granted under the 2023 Plan. In November 2013, the Board and our stockholders approved the ESPP, which became effective as of December 5, 2013. As of June 30, 2024, the total number of shares of common stock available for issuance under the ESPP is 987,344. Unless otherwise determined by the Board, beginning on January 1, 2014, and continuing until January 1, 2023, the total number of shares of common stock available for issuance under the ESPP automatically increased annually on January 1 by the lesser of (i) 1% of the total number of issued and outstanding shares of common stock as of December 31 of the immediately preceding year, or (ii) 621,814 shares of common stock. The automatic increase has expired, and the number of shares of common stock available for issuance under the ESPP was not increased on January 1, 2024. As of June 30, 2024, we have issued a total of 787,474 shares of common stock under the ESPP. During the six months ended June 30, 2024, the Company awarded 959,071 RSUs to certain employees. The standard vesting of these awards is generally in three equal annual installments and is contingent on an employee’s continued service to the Company. The fair value of these awards is determined based on the intrinsic value of the stock on the date of grant and will be recognized as stock-based compensation expense over the requisite service period. As of June 30, 2024, a total of 1,045,738 RSUs have been granted under the 2023 Plan. The Company extended vesting periods and expiration dates of equity awards for employees who retired in April 2024. There is a $3.1 million incremental expense as a result of the extension of the expiration dates, and there is a $1.2 million expense as a result of the extension of the vesting periods. Total employee, director and non-employee stock-based compensation expense recognized for the three and six months ended June 30, 2024 and 2023 are as follows (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
General and administrative | $ | 8,469 |  |  | $ | 4,471 |  |  | $ | 13,168 |  |  | $ | 8,747 |
Research and development | 8,721 |  |  | 9,092 |  |  | 15,443 |  |  | 17,415 |
| $ | 17,190 |  |  | $ | 13,563 |  |  | $ | 28,611 |  |  | $ | 26,162 |
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Stock options | $ | 10,945 |  |  | $ | 6,842 |  |  | $ | 17,818 |  |  | $ | 13,825 |
ESPP | 211 |  |  | 341 |  |  | 417 |  |  | 663 |
RSUs | 6,034 |  |  | 6,380 |  |  | 10,376 |  |  | 11,674 |
| $ | 17,190 |  |  | $ | 13,563 |  |  | $ | 28,611 |  |  | $ | 26,162 |
The following table summarizes option activity under our stock plans and related information:
| Number of Shares Subject to Outstanding Options |  | Weighted Average Exercise Price (Per Share) |  | Weighted Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2023 | 11,142,986 |  | $ | 29.60 |  |  | 6.03 |  | $ | 9,977 |
Options granted | 2,167,253 |  | $ | 22.43 |  |  |  |  |
Options forfeited | (485,918) |  | $ | 32.84 |  |  |  |  |
Options exercised | (162,895) |  | $ | 11.83 |  |  |  |  |
Balance at June 30, 2024 | 12,661,426 |  | $ | 28.48 |  |  | 6.18 |  | $ | 5,813 |
Exercisable | 8,295,121 |  | $ | 29.38 |  |  | 4.76 |  | $ | 5,745 |
We calculate the intrinsic value as the difference between the exercise price of the options and the closing price of common stock of $18.93 per share as of June 30, 2024. The weighted-average fair value of options granted during the six-month periods ended June 30, 2024 and 2023 were $22.43 and $30.65 per share, respectively. There were 1,941,412 options granted during the six-month period ended June 30, 2023. We estimated the fair value of each equity award, including stock options and shares issued under our ESPP, using the Black-Scholes option-pricing model based on the date of grant of such stock option or ESPP share issuance date, with the following weighted average assumptions for the three and six months ended June 30, 2024 and 2023:
| Options |  | Options
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Expected term (years) | 6.4 |  | 6.5 |  | 6.4 |  | 6.1
Expected volatility | 50.4 | % |  | 51.2 | % |  | 50.1 | % |  | 50.5 | %
Risk-free interest rate | 4.42 | % |  | 3.69 | % |  | 4.18 | % |  | 4.17 | %
Expected dividend yield | — | % |  | — | % |  | — | % |  | — | %
| ESPP |  | ESPP
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Expected term (years) | 0.5 - 2.0 |  | 0.5 - 2.0 |  | 0.5 - 2.0 |  | 0.5 -2.0
Expected volatility | 43.0% - 44.6% |  | 38.2% - 55.7% |  | 43.0% - 44.6% |  | 38.2% - 55.7%
Risk-free interest rate | 4.71% - 5.40% |  | 0.13% - 5.39% |  | 4.71% - 5.40% |  | 0.13% - 5.39%
Expected dividend yield | — | % |  | — | % |  | — | % |  | — | %
As of June 30, 2024, the unamortized compensation expense related to unvested stock options was $56.9 million. The remaining unamortized compensation expense will be recognized over the next 2.7 years. As of June 30, 2024, the unamortized compensation expense under our ESPP was $1.3 million. The remaining unamortized expense will be recognized over the next 1.4 years. The following table summarizes the RSU activity for the six-month period ended June 30, 2024:
| Restricted Stock Units |  | Weighted Average Grant Date Fair Value (Per unit)
Unvested RSUs at December 31, 2023 | 1,490,040 |  | $ | 30.66 |
Granted | 959,071 |  | 22.58 |
Vested | (550,972) |  | 31.72 |
Forfeited | (119,483) |  | 29.80 |
Unvested RSUs at June 30, 2024 | 1,778,656 |  | $ | 26.02 |
As of June 30, 2024, the unamortized compensation expense related to unvested RSUs was $37.0 million. The remaining unamortized expense will be recognized over the next 2.1 years.

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