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Share-Based Compensation | 3 Months Ended
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Mar. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Share-Based Compensation | Share-Based Compensation 2017 Equity Incentive Plan Under the Company’s historical shareholder and subscription agreements, the Company was authorized to issue restricted shares, restricted share units, as well as options, as incentives to its employees, non-employees and members of its board of directors. To the extent such incentives were in the form of share options, the options were granted pursuant to the terms of the 2017 Equity Incentive Plan, or the 2017 Plan. In July 2019, the Company’s board of directors adopted the 2017 Plan. The 2017 Plan provided for the grant of Enterprise Management Incentive, or EMI, options, to its UK employees, for the grant of options to its U.S. employees and non-employees of the Company. The 2017 Plan was administered by the board of directors. As of March 31, 2023, the Company was authorized to issue a total of 1,600,329 ordinary shares underlying outstanding options granted under the 2017 Plan prior to the IPO. Options granted under the 2017 Plan, typically vest over a three or four-year service period with 33.3% and 25% respectively, of the award vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining years. Options granted under the 2017 Plan generally expire 10 years from the date of grant. Restricted share units granted under the 2017 Plan typically vest over a four-year service period with 25% of the award vesting on the first anniversary of the commencement date and quarterly thereafter. The options granted on June 30, 2020 were subject to 25% vesting upon the earlier occurrence of (i) the one year anniversary of the date of grant, or (ii) the date of the listing of the Company's ordinary shares on any stock exchange, followed by straight line vesting for three years for the remaining 75% of the allocation until vested in full. The restricted share units granted on June 30, 2020 are subject to 25% vesting upon the earlier of (i) the one year anniversary of the date of grant, or (ii) the first day following the six-month anniversary of the listing of the Company's ordinary shares on any stock exchange on which the closing price of the shares is 20% higher than the listing price for at least five consecutive trading days. 2020 Employee Share Purchase Plan The Company’s 2020 Employee Share Purchase Plan, or the ESPP, was adopted by the Board in September 2020 and approved by shareholders in September 2020 and became effective upon the effectiveness of the Company’s Registration Statement on Form F-1 in connection with the IPO. The ESPP initially reserved and authorized the issuance of up to a total of 340,053 ordinary shares to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2022 and each January 1 thereafter through termination of the 2020 Plan, by the lesser of (i) 1% of the outstanding number of ordinary shares on the immediately preceding December 31, (ii) 510,080 ordinary shares or (iii) such lesser number of ordinary shares as determined by the plan administrator. The number of shares reserved under the ESPP is subject to change in the event of a share split, share dividend or other change in capitalization. On October 1, 2021, the Company launched the SIP and the ESPP, through which employees can purchase shares at a discounted price. At the end of six months, shares will automatically be purchased at the lower of the opening and closing price of the shares for the saving period minus a 15% discount. 2020 Share Option Plan In September 2020, the Company’s board of directors adopted, and the Company’s shareholders approved, the 2020 Share Option and Incentive Plan, or the 2020 Plan, which became effective upon the effectiveness of the Company’s Registration Statement on Form F-1 in connection with the IPO. The 2020 Plan allows the compensation and leadership development committee to make equity-based and cash-based incentive awards to the Company’s officers, employees, directors and other key persons (including consultants). Options granted under the 2020 Plan generally expire 10 years from the date of grant and typically vest over a 4 year service period with 25% of the options vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining years. The Company initially reserved 2,074,325 of its ordinary shares for the issuance of awards under the 2020 Plan. The 2020 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2022, by up to 4% of the outstanding number of ordinary shares on the immediately preceding December 31, or such lesser number of shares as determined by the compensation and leadership development committee. This number is subject to adjustment in the event of a sub-division, consolidation, share dividend or other change in our capitalization. The total number of ordinary shares that may be issued under the 2020 Plan is 5,460,391 shares as of March 31, 2023, of which 253,084 shares remained available for future grant. The options granted in 2022 under the 2020 Plan to employees generally expire 10 years from the date of grant. There are three potential vesting conditions for the 2022 grants including: (i) 25% per year over four year service period, (ii) four year service period with 25% of the vesting on the first anniversary of the commencement date and the balance vesting monthly over the remaining years; and (iii) monthly vesting over four year service period. During the three months ended March 31, 2023 and 2022, the Company granted options to purchase 2,076,950 and 1,111,569 ordinary shares to employees and non-employees, respectively. 2022 Inducement Option Award On August 1, 2022, the Company granted to its new chief executive officer a non-qualified share option to purchase up to 600,000 ordinary shares as an inducement grant. The non-qualified share option has a 10 year term and vests one-fourth on August 1, 2023 and the remaining three-fourths in equal monthly installments over the following 36 months. The non-qualified share option has other terms that mirror those of non-qualified share options granted under the Company’s 2020 Plan and the Company’s standard form of non-qualified share option agreement. Restricted Share Units A summary of the changes in the Company’s unvested restricted share units during the three months ended March 31, 2023 are as follows:
| Number of Shares |  | Weighted Average Grant Date Fair Value |
Unvested and Outstanding as of December 31, 2022 | 271,135 |  |  | $ | 12.23 |  |
Granted | 175,750 |  |  | $ | 10.85 |  |
Vested | (31,856) |  |  | $ | 12.60 |  |
Forfeited | (7,500) |  |  | $ | 12.42 |  |
Unvested and Outstanding as of March 31, 2023 | 407,529 |  |  | $ | 11.60 |  |
As of March 31, 2023 and December 31, 2022, there was $4.4 million and $2.6 million of unrecognized compensation cost related to unvested restricted share units, respectively, which is expected to be recognized over a weighted-average period of 3.2 years and 3.0 years, respectively. The exercise price of restricted share units is at a nominal value less than $0.01 per share. Share Options The following table summarizes the Company’s share options activity for the three months ended March 31, 2023:
| Number of Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value (in thousands) |
Outstanding as of December 31, 2022 | 5,092,732 |  |  | $ | 13.55 |  |  | 8.38 |  | $ | 13,013 |  |
Granted | 2,076,950 |  |  | $ | 10.08 |  |  |  |  |  |
Exercised | (3,790) |  |  | $ | 0.01 |  |  |  |  |  |
Forfeited | (131,350) |  |  | $ | 24.13 |  |  |  |  |  |
Outstanding as of March 31, 2023 | 7,034,542 |  |  | $ | 13.25 |  |  | 8.63 |  | $ | 17,648 |  |
Exercisable as of March 31, 2023 | 2,600,262 |  |  | $ | 10.86 |  |  | 7.53 |  | $ | 15,048 |  |
Unvested as of March 31, 2023 | 4,434,280 |  |  | $ | 14.65 |  |  | 9.27 |  | $ | 2,600 |  |
The aggregate intrinsic value of options exercised during the three months ended March 31, 2023 and 2022 was less than $0.1 million and $4.9 million, respectively. The aggregate intrinsic value of share options is calculated as the difference between the exercise price of the share options and the fair value of the Company’s ordinary shares for those share options that had exercise prices lower than the fair value of the Company’s ordinary shares. The weighted average grant-date fair value of share options granted was $8.27 and $11.38 per share during the three months ended March 31, 2023, and 2022, respectively. As of March 31, 2023 and 2022, there was $42.3 million and $35.2 million of unrecognized compensation cost related to unvested share options, which is expected to be recognized over a weighted-average period of 3.1 years and 3.4 years, respectively. Share Option Valuation The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the share options granted to employees and directors during the three months ended March 31, 2023, and 2022 were as follows:
| Three Months Ended March 31,
| 2023 |  | 2022
Expected option life (years) | 6.05 years |  | 5.88 years
Expected volatility | 87.12 | % |  | 80.20 | %
Risk-free interest rate | 3.47 | % |  | 1.65 | %
Expected dividend yield | — | % |  | — | %
Fair value of underlying ordinary shares | $ | 10.85 |  | $ | 15.98
Share-based Compensation Expense Share-based compensation expense recorded as research and development and general and administrative expenses is as follows (in thousands):
| Three Months Ended March 31,
| 2023 |  | 2022
Research and development | 2,244 |  |  | 1,792 |
General and administrative | 1,827 |  |  | 1,336 |
Total share based compensation expense | $ | 4,071 |  |  | $ | 3,128 |

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