Stock-based compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

The Company grants stock options, restricted stock units, and stock appreciation rights (“SARs”) under the 2021 Stock Option and Incentive Plan (“2021 Plan”) and the 2023 Inducement Plan (the “2023 Inducement Plan”). On January 1, 2024, the number of shares of common stock reserved for future issuance under the 2021 Plan was increased by 4,654,384 shares pursuant to an automatic annual increase. As of March 31, 2024, 3,667,088 shares were available for future grant under the 2021 Plan. As of March 31, 2024, 2,500,000 shares were available for future grant under the 2023 Inducement Plan.

Total stock-based compensation expense related to all of the Company’s stock-based awards was recorded in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):



	For the Three Months Ended March 31,
		2024		2023
Research and development		$	1,654	$	1,193
Selling, general and administrative		1,943		1,473
Total stock-based compensation expense		$	3,597	$	2,666

Stock options

Stock options generally vest either 25% after one year from the date of the grant with the remainder vesting monthly over the following three-year period or ratably over three years in three equal installments. The Company recognizes forfeitures as they occur and uses the straight-line expense recognition method. Activity for stock options is shown below:


	Number of Options	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands $)
Outstanding at December 31, 2023	17,104,505	$	3.03	8.3	$	30,661
Granted	3,970,309	4.38
Exercised	(542,741)	2.68			1,233
Canceled/Forfeited	(225,111)	2.59
Expired	(40,087)	5.11
Outstanding at March 31, 2024	20,266,875	3.31		8.5	$	55,369
Exercisable at March 31, 2024	5,926,599	$	3.66	7.1	$	16,497

The aggregate intrinsic value of outstanding stock options as of March 31, 2024 was calculated based on the Company’s closing stock price of $5.68 per share as reported on the Nasdaq Global Select Market on such date.

The weighted-average grant date fair value of stock options granted during the three months ended March 31, 2024 and 2023 was $3.15 and $1.46, respectively, per share. As of March 31, 2024, total unrecognized stock-based compensation related to stock options was $29.6 million, which the Company expects to recognize over a remaining weighted average period of 2.6 years.

Determination of fair value

The estimated grant-date fair value of all the Company’s stock options was calculated using the Black-Scholes option pricing model, based on the following assumptions:



	For the Three Months Ended March 31,
		2024	2023
Expected term (in years)		5.5-6.1	5.3-6.1
Volatility		81%-82%	79%-80%
Risk-free interest rate		3.8%-4.1%	3.4%-4.2%
Dividend Yield		—%	—%

Restricted stock

In connection with certain business combinations and as compensation for other service relationships, the Company has issued shares of restricted stock that vest over time subject to continued service by the stockholder. Shares of restricted stock that have not yet vested are subject to the Company’s right of repurchase or forfeiture by the stockholder. Activity for restricted shares is shown below:


			Number of shares
Unvested as of December 31, 2023			374,208


Vested			(105,336)
Unvested as of March 31, 2024			268,872

As of March 31, 2024, there was $0.6 million of unrecognized compensation expense related to the outstanding shares of restricted stock expected to be recognized over a remaining weighted-average period of 0.9 years.

Restricted stock units subject to time-based vesting generally vest ratably over a term of 1-4 years. The Company recognizes forfeitures as they occur and uses the straight-line expense recognition method. Activity for restricted stock units is shown below:


	Number of Shares	Weighted Average Grant Date Fair Value
Unvested as of December 31, 2023	2,198,334	$	1.42
Granted	2,426,855	3.62
Vested	(14,326)	2.21
Forfeitures	(61,908)	1.56
Unvested as of March 31, 2024	4,548,955	$	2.59

The weighted-average grant date fair value of restricted stock units granted during the three months ended March 31, 2024 was $3.62. The aggregate grant date fair value of restricted stock units vested during the three months ended March 31, 2024 and 2023 was $0.0 million. As of March 31, 2024, there was $11.7 million of unrecognized compensation expense related to the outstanding restricted stock units expected to be recognized over a remaining weighted-average period of 2.0 years. Fair value of restricted stock units subject to time-based vesting is calculated based on the Company’s closing stock price per share as reported on the Nasdaq Global Select Market on the date of grant.

Restricted Stock Unit Award with Market Conditions

In March 2024, the Company granted 1,500,000 performance restricted stock units to its Founder and Chief Executive Officer that contained market conditions (the “2024 Market Award”). Subject to the holder’s continued service, the 2024 Market Award provided for vesting in tranches once the Company’s closing stock price meets or exceeds certain thresholds established by the Company’s Compensation Committee of the Board of Directors. The original grant-date fair value of the 2024 Market Award of $5.5 million was determined using a Monte Carlo simulation model using an expected volatility of 97% and risk-free rate of 4.5%. The stock based compensation expense will be recognized over the derived service period for each tranche over periods up to 1.3 years. As of March 31, 2024, none of the stock price thresholds for the 2024 Market Award had been met resulting in no shares vesting. Any unvested tranches of the 2024 Market Award will expire in March 2027 if the vesting conditions are not met.

Stock appreciation rights

In January 2021, the Company issued SARs that are contingent upon a qualifying liquidity event that continues to not be probable of occurrence; accordingly, no compensation expense has been recognized for these awards. The aggregate intrinsic value of the 394,736 SARs outstanding as of March 31, 2024 is $2.2

million based on the Company’s closing stock price of $5.68 per share as reported on the Nasdaq Global Select Market on such date.

Under the Company’s 2020 Stock Option and Grant Plan and 2021 Plan, the Company has also granted a limited quantity of cash-settled SARs to certain employees and consultants based outside the United States. As of March 31, 2024, 197,150 of these SARs were outstanding with a weighted average exercise price of $4.65 per share. The fair value is remeasured at the end of each reporting period based on the Company’s stock price, with remeasurements reflected as an adjustment to compensation expense in the condensed consolidated statements of operations and comprehensive loss for such period. As of March 31, 2024 and as of December 31, 2023, the Company had recognized a less than $0.1 million liability for SARs classified within other long-term liabilities on the condensed consolidated balance sheets.