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Stock-based Compensation | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Stock-based Compensation | Stock-based Compensation Equity Incentive Plans In August 2024, our Board of Directors (the “Board”) approved the 2024 Employment Inducement Award Plan (the “2024 Inducement Plan”) which provides for the grant of non-qualified stock options, RSAs, restricted stock units (“RSUs”), and performance awards to eligible employees with respect to an aggregate of up to 1,000,000 shares of our common stock. In January 2023, our Board approved the 2022 Employment Inducement Award Plan (the “2022 Inducement Plan”) which provides for the grant of non-qualified stock options, RSAs, RSUs, performance awards, other stock awards and dividend equivalents to eligible employees with respect to an aggregate of up to 2,000,000 shares of our common stock. In June 2023, the 2022 Inducement Plan was terminated upon the approval of an amendment to the Company's 2019 Incentive Award Plan (the “2019 Plan”) at the Annual Meeting of Stockholders in June 2023 (the “2023 Annual Meeting”). In 2019, the Board and stockholders approved the 2019 Plan. The 2019 Plan superseded and replaced in its entirety our 2010 Equity Incentive Plan (the “2010 Plan”) which was effective in March 2010, and no further awards will be granted under the 2010 Plan; however, the terms and conditions of the 2010 Plan will continue to govern any outstanding awards thereunder. The 2010 Plan provided for the grant of incentive stock options, non-statutory stock options, RSUs, RSAs, PSUs, PBOs, stock appreciation rights, and stock purchase rights to our employees, non-employee directors and consultants. The 2019 Plan provides for the grant of stock options, including incentive stock options and non-qualified stock options, stock appreciation rights, RSAs, RSUs, PSUs, PBOs, other stock or cash based awards and dividend equivalents to eligible employees and consultants of the Company or any parent or subsidiary, as well as members of the Board. The number of shares of our common stock that were initially available for issuance under the 2019 Plan is equal to the sum of (i) 7,897,144 shares, and (ii) any shares subject to awards granted under the 2010 Plan that were outstanding as of April 22, 2019 and thereafter terminate, expire, lapse or are forfeited. In June 2019, 8.1 million shares authorized for issuance under the 2019 Plan were registered under the Securities Act. In April 2023, the Board approved an amendment to the 2019 Plan (the “2019 Amended Plan”) which became effective upon stockholders' approval at the 2023 Annual Meeting. The 2019 Amended Plan included the (i) increase in the number of shares available by 8,000,000 shares, such that an aggregate of 15,897,144 shares are reserved for issuance under the 2019 Amended Plan and any shares subject to awards granted under the 2010 Plan, and (ii) increase in the number of shares that may be granted as incentive stock options under the 2019 Amended Plan such that an aggregate of 22,000,000 shares of common stock may be granted as incentive stock options under the 2019 Amended Plan. As of December 31, 2024, total shares remaining available for issuance under the 2019 Plan and 2024 Inducement Plan were 3,937,070 s hares. Employee Stock Purchase Plan In April 2023, the Board approved an employee stock purchase plan (as may be amended from time to time, the “ESPP”) which became effective upon approval at the 2023 Annual Meeting. The ESPP allows eligible employees of the Company to purchase shares of our common stock through payroll deductions. Offering periods are generally over a 24-month period and begin in May and November of each year. The per share purchase price will be the lower of 85% of the closing trading price per share of our common stock on the first trading date of an offering period in which a participant is enrolled or 85% of the closing trading price per share on the purchase date. Participant purchases are limited to a maximum of $25,000 of fair value of our stock per calendar year. The Company is authorized to grant up to 2,000,000 shares of common stock under the ESPP. The first offering period of the ESPP commenced in December 2023. For the year ended December 31, 2024, 263,157 shares of our common stock were purchased under the ESPP. As of December 31, 2024, 1,736,843 shares of common stock were available for future issuance under the ESPP. We recognized $0.3 million of stock-based compensation expenses related to the ESPP for the year ended December 31, 2024. As of December 31, 2024, the total unrecognized stock-based compensation expense, net of expected forfeitures, related to the ESPP was $0.6 million and is expected to be recognized over the remaining offering period. Stock Options Stock options granted to employees generally have a maximum term of ten years and vest over four years from the date of grant, of which 25% vest at the end of one year, and 75% vest monthly over the remaining three years. We may grant options with different vesting terms from time to time. In January 2024, the Board approved the grants of stock options with a vesting term over three years from the date of grant, of which 33% vest at the end of one year, and 67% vest monthly over the remaining two years. Unless an employee's termination of service is due to disability or death, upon termination of service, any unexercised vested options will be forfeited at the end of three months or the expiration of the option, whichever is earlier. Restricted Stock Units (“RSUs”) We also grant employees RSUs, which generally vest over either a three-year period with 33% of the shares subject to the RSUs vesting on each yearly anniversary of the vesting commencement date or over a four-year period with 25% of the shares subject to the RSU vesting on each yearly anniversary of the vesting commencement date, in each case contingent upon such employee’s continued service on such vesting date. RSUs are generally subject to forfeiture if employment terminates prior to the release of vesting restrictions. We may grant RSUs with different vesting terms from time to time. Performance-contingent Restricted Stock Units (“PSUs”) and Performance Based Options (“PBOs”) In prior years, the compensation committee of the Board approved grants of PBOs and PSUs to our executives, and solely in respect of non-executive employees, delegated to our CEO the authority to approve grants of PSUs. The PSUs and PBOs vest based upon both the successful achievement of certain corporate operating milestones in specified timelines and continued employment through the applicable vesting date. When the performance goals are deemed to be probable of achievement for these types of awards, recognition of stock-based compensation expense commences. Once the number of shares eligible to vest is determined, those shares vest in two equal installments with 50% vesting upon achievement, as determined by the compensation committee of the Board, and the remaining 50% vesting on the first anniversary of achievement, in each case, subject to the recipient’s continued service through the applicable vesting date. If the performance goals are achieved at the threshold level, the number of shares eligible to vest in respect of the PSUs and PBOs would be equal to half the number of PSUs granted and one-quarter the number of shares underlying the PBOs granted. If the performance goals are achieved at the target level, the number of shares eligible to vest in respect of the PSUs and PBOs would be equal to the number of PSUs granted and half of the shares underlying the PBOs granted. If the performance goals are achieved at the superior level, the number of shares eligible to vest in respect of the PSUs would be equal to two times the number of PSUs granted and equal to the number of PBOs granted. The number of shares issuable upon achievement of the performance goals at the levels between the threshold and target levels for the PSUs and PBOs or between the target level and superior levels for the PSUs would be determined using linear interpolation. Achievement below the threshold level would result in no shares being eligible to vest in respect of the PSUs and PBOs. No PSUs and PBOs were granted in 2024 and 2023. In 2022, we awarded PSUs (“2022 PSUs”) and PBOs (“2022 PBOs”), each of which commence vesting based upon the achievement of various weighted performance go als, including finance and corporate strategy, performance enzymes and biotherapeutics deliverables, research plans, and organizational development. In the first quarter of 2023, the compensation committee of the Board determined that the 2022 PSUs and 2022 PBOs performance goals had been achieved at 85.0% and 42.5% of the target level, respectively, and recognized stock-based compensation expenses accordingly. Accordingly, 50% of the shares underlying the 2022 PSUs and PBOs vested in the first quarter of 2023 and 50% of the shares underlying the 2022 PSUs and PBOs vested in the first quarter of 2024, in each case, subject to the recipient’s continued service on each vesting date. Stock-Based Compensation Expense Stock-based compensation expense is included in the consolidated statements of operations as follows (in thousands):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Costs of product revenue | $ | 429 |  |  | $ | 354 |  |  | $ | 452 |
Research and development | 2,928 |  |  | 2,631 |  |  | 3,907 |
Selling, general and administrative | 9,730 |  |  | 6,986 |  |  | 10,172 |
Total | $ | 13,087 |  |  | $ | 9,971 |  |  | $ | 14,531 |
The following table presents total stock-based compensation expense by security type included in the consolidated statements of operations (in thousands):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Stock options | $ | 6,423 |  |  | $ | 3,962 |  |  | $ | 4,167 |
RSUs and RSAs | 4,717 |  |  | 4,447 |  | 4,807
PSUs | 247 |  |  | 1,649 |  |  | 3,268 |
PBOs | 1,357 |  |  | $ | (112) |  |  | 2,289
ESPP | 343 |  |  | 25 |  |  | — |
Total | $ | 13,087 |  |  | $ | 9,971 |  |  | $ | 14,531 |
During the fourth quarter of 2024, we entered into Separation and Consulting Agreements with Sri Ryali, our former Chief Financial Officer, and two other former executives. Under these agreements, the outstanding unvested options and awards for each of the three former executives will continue to vest through the end of their consultancy period, which concludes on February 28, 2025. This modification resulted in a reduction of stock-based compensation expense of $0.4 million recognized in selling, general and administrative expenses during the year ended December 31, 2024. On June 29, 2024, we entered into an Advisory Services Agreement with a former executive of the Company. Pursuant to the advisory agreement, the exercise period for the former executive’s vested stock options and performance-based options was also extended. This modification resulted in a stock-based compensation expense of $2.0 million recognized in selling, general and administrative expenses during the year ended December 31, 2024. In connection with the retirement of John Nicols, our former President and Chief Executive Officer, in August 2022, and the Transition and Separation Agreement between Mr. Nicols and the Company, certain supplementary modifications were made to Mr. Nicols' vested and unvested stock option and PBOs awards including voluntary forfeiture of certain unvested stock option and PBOs awards and the extension of the post-termination exercise period of certain vested stock option and PBOs awards. During the year ended December 31, 2022, we recorded a one-time, non-cash incremental compensation expense of $1.0 million, net of the required reversal of previously recognized stock-based compensation expenses attributed to unvested shares, in selling, general and administrative expenses related to these stock option award modifications. Grant Award Activities: Stock Option Awards We estimated the fair value of stock options using the Black-Scholes-Merton option-pricing model based on the date of grant. The following summarizes the weighted-average assumptions used to estimate the fair value of employee stock options granted:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Expected life (years) | 5.9 |  | 5.8 |  | 5.7
Volatility | 73.3 | % |  | 66.2 | % |  | 62.1 | %
Risk-free interest rate | 3.9 | % |  | 4.0 | % |  | 3.1 | %
Expected dividend yield | 0.0 | % |  | 0.0 | % |  | 0.0 | %
The following summarizes the weighted-average assumptions used to estimate the fair value of 20,000 and 50,000 shares of stock options granted to non-employees for services valued at $44 thousand and $0.1 million during the years ended December 31, 2024 and 2023, respectively:
| Year Ended December 31,
| 2024 |  | 2023
Expected life (years) | 5.8 |  | 5.8
Volatility | 74.7 | % |  | 70.1 | %
Risk-free interest rate | 4.4 | % |  | 4.7 | %
Expected dividend yield | 0.0 | % |  | 0.0 | %
The weighted average grant date fair value per share of non-employee stock options granted respectively in 2024 and 2023 was $2.19 and $1.05, respectively. The following tables summarize s stock option activities:
| Number of Shares |  | Weighted Average Exercise Price Per Share
| (In Thousands) |  |
Outstanding at December 31, 2021 | 2,935 |  |  | $ | 8.90 |
Granted | 2,000 |  |  | $ | 8.90 |
Exercised | (410) |  |  | $ | 2.33 |
Forfeited/Expired | (275) |  |  | $ | 19.01 |
Outstanding at December 31, 2022 | 4,250 |  |  | $ | 8.88 |
Granted | 2,046 |  |  | $ | 5.23 |
Exercised | (283) |  |  | $ | 1.97 |
Forfeited/Expired | (839) |  |  | $ | 12.08 |
Outstanding at December 31, 2023 | 5,174 |  |  | $ | 7.31 |
Granted | 4,837 |  |  | $ | 3.08 |
Exercised | (399) |  |  | $ | 3.24 |
Forfeited/Expired | (484) |  |  | $ | 8.75 |
Outstanding at December 31, 2024 | 9,128 |  |  | $ | 5.17 |
| Number of Shares |  | Weighted Average Exercise Price Per Share |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value
| (In Thousands) |  |  |  | (In Years) |  | (In Thousands)
Outstanding at December 31, 2024 | 9,128 |  |  | $ | 5.17 |  |  | 6.3 |  | $ | 8,497 |
Exercisable at December 31, 2024 | 2,840 |  |  | $ | 8.05 |  |  | 4.5 |  | $ | 402 |
Vested and expected to vest at December 31, 2024 | 8,508 |  |  | $ | 5.27 |  |  | 6.2 |  | $ | 7,724 |
The weighted average grant date fair value per share of employee stock options granted in 2024, 2023, and 2022 were $2.05, $3.31 and $4.99, respectively. The total intrinsic value of options exercised in 2024, 2023, and 2022 were $0.6 million, $0.7 million and $3.1 million, respectively. As of December 31, 2024, the re was $11.3 million of unrecognized stock-based compensation, net of expected forfeitures, related to unvested stock options, which we expect to recognize over a weighted average period of 2.3 years. Restricted Stock Awards (“RSAs”) The following table summarizes RSA activities:
| Number of Shares |  | Weighted Average Grant Date Fair Value Per Share
| (In Thousands) |  |
Non-vested balance at December 31, 2021 | 80 |  |  | $ | 17.53 |
Granted | 159 |  |  | $ | 7.53 |
Vested | (58) |  |  | $ | 18.42 |
Non-vested balance at December 31, 2022 | 181 |  |  | $ | 8.45 |
Granted | 277 |  |  | $ | 2.89 |
Vested | (133) |  |  | $ | 9.04 |
Non-vested balance at December 31, 2023 | 325 |  |  | $ | 3.48 |
Granted | 211 |  |  | $ | 3.32 |
Vested | (302) |  |  | $ | 3.31 |
Non-vested balance at December 31, 2024 | 234 |  |  | $ | 3.56 |
The total fair value, as of the vesting date, of RSAs vested in fiscal years 2024, 2023 and 2022 were $1.0 million, $0.4 million and $0.5 million respectively. As of December 31, 2024, there was $0.4 million of unrecognized stock-based compensation cost related to non-vested RSAs, which we expect to recognize over a weighted average period of 0.5 years. Restricted Stock Units (“RSUs”) The following table summarizes RSU activities:
| Number of Shares |  | Weighted Average Grant Date Fair Value Per Share
| (In Thousands) |  |
Non-vested balance at December 31, 2021 | 232 |  |  | $ | 21.83 |
Granted | 518 |  |  | $ | 17.46 |
Vested | (106) |  |  | $ | 21.21 |
Forfeited/Expired | (126) |  |  | $ | 19.55 |
Non-vested balance at December 31, 2022 | 518 |  |  | $ | 18.15 |
Granted | 1,049 |  |  | $ | 5.24 |
Vested | (204) |  |  | $ | 18.42 |
Forfeited/Expired | (343) |  |  | $ | 9.71 |
Non-vested balance at December 31, 2023 | 1,020 |  |  | $ | 7.66 |
Granted | 1,530 |  |  | $ | 3.08 |
Vested | (383) |  |  | $ | 8.96 |
Forfeited/Expired | (157) |  |  | $ | 4.66 |
Non-vested balance at December 31, 2024 | 2,010 |  |  | $ | 4.16 |
The total fair value, as of the vesting date, of RSUs vested in fiscal years 2024, 2023 and 2022 were $1.1 million, $1.1 million and $1.8 million respectively. As of December 31, 2024, there was $4.2 million of unrecognized stock-based compensation cost related to non-vested RSUs, which we expect to recognize over a weighted average period of 1.8 years. Performance-Contingent Restricted Stock Units (“PSUs”) The following table summarizes PSU activities:
| Number of Shares |  | Weighted Average Grant Date Fair Value Per Share
| (In Thousands) |  |
Non-vested balance at December 31, 2021 | 128 |  |  | $ | 21.24 |
Granted | 686 |  |  | $ | 9.55 |
Vested | (107) |  |  | $ | 20.52 |
Forfeited/Expired | (40) |  |  | $ | 19.93 |
Non-vested balance at December 31, 2022 | 667 |  |  | $ | 9.41 |
Vested | (315) |  |  | $ | 11.02 |
Forfeited/Expired | (75) |  |  | $ | 12.49 |
Other | 15 |  |  | $ | 25.05 |
Non-vested balance at December 31, 2023 | 292 |  |  | $ | 7.69 |
Vested | (248) |  |  | $ | 7.69 |
Forfeited/Expired | (44) |  |  | $ | 7.69 |
Non-vested balance at December 31, 2024 | — |  |  | $ | — |
The total fair value, as of the vesting date, of PSUs vested in the years ended December 31, 2024, 2023, and 2022 were $0.9 million, $1.6 million, and $2.1 million, respectively. As of December 31, 2024, there was nil of unrecognized stock-based compensation cost related to non-vested PSUs. Performance Based Options (“PBOs”) We estimated the fair value of PBOs using the Black-Scholes-Merton option-pricing model based on the date of grant. No PBOs were granted to employees for their services during the year ended December 31, 2024. The following summarize the weighted-average assumptions used to estimate the fair value of PBOs granted:
| Year Ended December 31,
| 2022
Expected life (years) | 5.6
Volatility | 54.9 | %
Risk-free interest rate | 1.8 | %
Expected dividend yield | 0.0 | %
The following tables summarizes PBOs activities:
| Number of Shares |  | Weighted Average Grant Date Fair Value Per Share
| (In Thousands) |  |
Outstanding at December 31, 2021 | 1,840 |  |  | $ | 4.11 |
Granted | 733 |  |  | $ | 9.89 |
Forfeited/Expired | (747) |  |  | $ | 8.29 |
Outstanding at December 31, 2022 | 1,826 |  |  | $ | 4.70 |
Forfeited/Expired | (178) |  |  | $ | 9.73 |
Outstanding at December 31, 2023 | 1,648 |  |  | $ | 5.64 |
Forfeited/Expired | (73) |  |  | $ | 10.23 |
Outstanding at December 31, 2024 | 1,575 |  |  | $ | 5.43 |
| Number of Shares |  | Weighted Average Exercise Price Per Share |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value
| (In Thousands) |  |  |  | (In Years) |  | (In Thousands)
Exercisable at December 31, 2024 | 1,575 |  |  | $ | 10.62 |  |  | 3.4 |  | $ | 114 |
Vested and expected to vest at December 31, 2024 | 1,575 |  |  | $ | 10.62 |  |  | 3.4 |  | $ | 114 |
The total fair value of e xercised PBOs for 2024, 2023 and 2022, was nil. As of December 31, 2024, there was nil of unrecognized stock-based compensation cost related to non-vested PBOs. Employee Stock Purchase Plan (“ESPP”) The fair value of shares to be issued under the ESPP is computed using the Black-Scholes-Merton option pricing model at the commencement of the offering period. The following summarizes the weighted-average assumptions used to estimate the fair value of ESPP for the initial offering period:
| Year Ended December 31,
| 2024 |  | 2023
Expected life (years) | 1.2 |  | 0.4
Volatility | 89.4 | % |  | 89.6 | %
Risk-free interest rate | 4.6 | % |  | 5.3 | %
Expected dividend yield | 0.0 | % |  | 0.0 | %

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