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Note 12 - Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2023
Notes to Financial Statements |
Share-Based Payment Arrangement [Text Block] | Note 12—Stock-Based Compensation Our equity plans provide for the grant of incentive and non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance units, performance shares and other stock and cash awards to employees and consultants. Stock options are granted with an exercise price not less than the fair market value of Omeros’ common stock on the date of the grant. Any unexercised options expire 10 years from grant date, and any unvested stock options granted which are subsequently canceled become available for future reissuance. Vesting schedules for our equity plans generally are as follows:
Grant Type | Vesting Schedule
Employee initial options grants | 25% at one-year anniversary, 1/48 monthly thereafter
Employee recurring options grants | 1/48 monthly
Non-employee consultant options grants | 1/12 or 1/48 monthly
Employee RSUs | 50% after one year, 50% after two years
Stock-based compensation expense is as follows:
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
|  | (In thousands) |
Continuing operations: |  |  |  |  |  |  |  |  |  |  |  |
Research and development |  | $ | 4,754 |  |  | $ | 6,123 |  |  | $ | 6,791 |
Selling, general and administrative |  |  | 7,140 |  |  |  | 8,042 |  |  |  | 8,154 |
Total stock-based compensation in continuing operations |  |  | 11,894 |  |  |  | 14,165 |  |  |  | 14,945 |
Discontinued operations |  |  | (244 | ) |  |  | (93 | ) |  |  | 2,685 |
Total stock-based compensation |  | $ | 11,650 |  |  | $ | 14,072 |  |  | $ | 17,630 |
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions were applied to stock option grants during the periods ended:
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
Estimated weighted-average fair value |  | $ | 2.44 |  |  | $ | 2.94 |  |  | $ | 10.54 |
Weighted-average assumptions: |  |  |  |  |  |  |  |  |  |  |  |
Expected volatility |  |  | 93 | % |  |  | 90 | % |  |  | 81 | %
Expected life, in years |  |  | 7.2 |  |  |  | 6.0 |  |  |  | 6.0 |
Risk-free interest rate |  |  | 3.97 | % |  |  | 2.83 | % |  |  | 1.06 | %
Expected dividend yield |  |  | — | % |  |  | — | % |  |  | — | %
Expected volatility is based on the historical volatility of our stock price weighted by grant issuances over the reporting period. We estimated the expected life of the stock options granted using the historical exercise behavior of option holders. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. Forfeiture expense is estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. Stock option activity for all stock option plans is as follows:
|  | Options Outstanding |  | Weighted- Average Exercise Price per Share |  | Remaining Contractual Life (In years) |  | Aggregate Intrinsic Value (In thousands) |
Balance at December 31, 2022 |  |  | 13,872,973 |  | $ | 11.02 |  |  |  |  |  |  |
Granted |  |  | 3,153,200 |  |  | 3.01 |  |  |  |  |  |  |
Exercised |  |  | (36,726 | ) |  | 4.10 |  |  |  |  |  |  |
Forfeited |  |  | (1,734,293 | ) |  | 9.96 |  |  |  |  |  |  |
Balance at December 31, 2023 |  |  | 15,255,154 |  | $ | 9.50 |  |  | 6.2 |  | $ | 1,388 |
Vested and expected to vest at December 31, 2023 |  |  | 14,762,090 |  | $ | 9.65 |  |  | 6.0 |  | $ | 1,272 |
Exercisable at December 31, 2023 |  |  | 10,554,140 |  | $ | 11.50 |  |  | 4.7 |  | $ | 217 |
Of the 15.3 million common stock options outstanding as of December 31, 2023, 12.3 million have an exercise price above the $3.27 closing price of our stock on the Nasdaq exchange on December 31, 2023. The total intrinsic value of stock options exercised during the years ended December 31, 2023, 2022 and 2021 was $0.1 million, $0.2 million and $7.8 million, respectively. At December 31, 2023, there were 4.7 million unvested stock options outstanding that vest over a weighted-average period of 2.1 years. The remaining estimated compensation expense to be recognized in connection with these unvested stock options is $14.5 million. RSU activity for all stock plans is as follows:
|  | RSUs Outstanding |  | Weighted- Average Grant Date Fair Value Per Share |
Balance at December 31, 2022 |  |  | 98,750 |  | $ | 7.53 |
Vested and released |  |  | (67,250 | ) |  | 7.53 |
Forfeited |  |  | (31,500 | ) |  | 7.53 |
Balance at December 31, 2023 |  |  | — |  | $ | — |

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