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Note 12 - Stock-based Compensation

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 12—Stock-Based Compensation

Our stock option plans provide for the grant of incentive and non-qualified stock options, restricted stock awards, restricted stock units, and other stock awards to employees, non-employee directors and consultants.

Stock-based compensation is as follows:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2024				2023				2024				2023
		(In thousands)								(In thousands)
Continuing operations
Research and development		$	1,063			$	1,305			$	3,146			$	3,710
Selling, general and administrative			1,578				2,054				4,921				5,456
Total stock-based compensation in continuing operations			2,641				3,359				8,067				9,166
Discontinued operations			—				(124	)			—				(207	)
Total stock-based compensation		$	2,641			$	3,235			$	8,067			$	8,959

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 all stock option grants:

		Three Months Ended				Nine Months Ended
		September 30, 2024				September 30, 2024
Estimated weighted-average fair value		$	3.06			$	2.60
Weighted-average assumptions:
Expected volatility			96	%			95	%
Expected life, in years			7.4				7.2
Risk-free interest rate			4.22	%			4.36	%
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 plans and related information is as follows:

						Weighted-
						Average								Aggregate
						Exercise				Remaining				Intrinsic
		Options				Price per				Contractual Life				Value
		Outstanding				Share				(In years)				(In thousands)
Balance at December 31, 2023			15,255,154			$	9.50
Granted			3,280,500				3.13
Exercised			(16,404	)			3.19
Forfeited			(386,181	)			6.91
Balance at September 30, 2024			18,133,069			$	8.41				6.0			$	6,168
Vested and expected to vest at September 30, 2024			17,503,959			$	8.58				5.9			$	5,677
Exercisable at September 30, 2024			12,133,698			$	10.75				4.5			$	1,421

On April 25, 2024, annual stock option grants of approximately 2.9 million shares of common stock were awarded to eligible participants for the 2023 annual performance period.

Of the 18.1 million common stock options outstanding as of September 30, 2024, 9.8 million have an exercise price per share above $3.97, which was the closing price of our stock on the Nasdaq exchange on September 30, 2024.

As of September 30, 2024, there were 6.0 million unvested options outstanding that will vest over a weighted-average period of 2.4 years. The total estimated compensation expense yet to be recognized on outstanding options is $14.4 million.

As of September 30, 2024, the total number of shares of common stock available for grant was 5.9 million. As of October 29, 2024, the total number of shares of common stock available for grant increased to 7.1 million due to approximately 1.2 million shares of common stock expiring and returning to our stock option plan for reissuance.