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Stock-Based Compensation | 6 Months Ended
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Jun. 30, 2024
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | 8. Stock-Based Compensation Equity Incentive Plans In February 2019, the Company adopted its 2019 Equity Incentive Plan (the “2019 Plan”). In October 2021, the 2019 Plan was terminated as to new awards upon the Company’s adoption of the 2021 Equity Incentive Plan (the “2021 Plan”), which became effective on October 19, 2021. The 2021 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units and performance awards to employees, directors or consultants of the Company. The number of common shares available for issuance under the 2021 Plan is 5,612,000 shares of common stock plus any common shares subject to stock options, restricted stock units or similar awards granted under the 2019 Plan that expire, are forfeited or otherwise terminate without having been exercised in full, are tendered to or withheld by the Company for payment of an exercise price or for tax withholding obligations or are forfeited to or repurchased by the Company due to failure to vest, with the maximum number of common shares to be added to the 2021 Plan equal to 4,978,561 common shares. Additionally, shares available for issuance under the 2021 Plan automatically increase on the first day of each fiscal year, beginning with the Company’s 2023 fiscal year, equal to the lesser of 5,102,000 common shares, 5% of the outstanding common shares on the last day of the immediately preceding fiscal year, or such number of common shares determined by the board of directors. On January 1, 2024, the number of shares of common stock that may be issued under the 2021 Plan was automatically increased by 2,962,617 shares. Options granted under the 2019 Plan and 2021 Plan (collectively, the “Plans”) generally vest over a period of between one and four years and expire ten years from grant date. As of June 30, 2024 and December 31, 2023, the Company had 11,980,790 and 9,018,173 shares, respectively, authorized for issuance under the Plans, and 2,731,595 and 317,001 shares, respectively, remained available for grant under the 2021 Plan. Total stock-based compensation expense related to share-based awards was comprised of the following (in thousands):
|  | Three months ended |  |  | Six months ended |
|  | June 30, |  |  | June 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Research and development |  | $ | 2,574 |  |  | $ | 4,117 |  |  | $ | 5,434 |  |  | $ | 7,331 |
General and administrative |  |  | 3,197 |  |  |  | 3,751 |  |  |  | 6,880 |  |  |  | 7,104 |
Total stock-based compensation expense |  | $ | 5,771 |  |  | $ | 7,868 |  |  | $ | 12,314 |  |  | $ | 14,435 |
Stock-based compensation expense by type of share-based award (in thousands):
|  | Three months ended |  |  | Six months ended |
|  | June 30, |  |  | June 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Stock options |  | $ | 4,885 |  |  | $ | 6,735 |  |  | $ | 10,362 |  |  | $ | 12,239 |
Restricted stock awards |  |  | 10 |  |  |  | 28 |  |  |  | 37 |  |  |  | 55 |
Restricted stock units |  |  | 850 |  |  |  | 1,047 |  |  |  | 1,863 |  |  |  | 2,046 |
Employee Stock Purchase Plan |  |  | 26 |  |  |  | 58 |  |  |  | 52 |  |  |  | 95 |
Total stock-based compensation expense |  | $ | 5,771 |  |  | $ | 7,868 |  |  | $ | 12,314 |  |  | $ | 14,435 |
Stock Options The following table summarizes stock option activity for the six months ended June 30, 2024:
|  |  |  |  |  |  |  | Weighted |  |  |  |
|  |  |  |  | Weighted |  |  | Average |  |  |  |
|  |  |  |  | Average |  |  | Remaining |  |  | Aggregate |
|  | Number |  |  | Exercise |  |  | Contractual |  |  | Intrinsic |
|  | of Shares |  |  | Price |  |  | Term |  |  | Value |
Outstanding as of December 31, 2023 |  |  | 10,338,724 |  |  | $ | 14.42 |  |  |  | 8.24 |  |  | $ | 1,737 |
Granted |  |  | 2,044,500 |  |  |  | 3.08 |  |  |  |  |  |  |
Exercised |  |  | (127,996 | ) |  |  | 0.92 |  |  |  |  |  |  |
Forfeited and cancelled |  |  | (1,462,027 | ) |  |  | 17.18 |  |  |  |  |  |  |
Outstanding as of June 30, 2024 |  |  | 10,793,201 |  |  | $ | 12.05 |  |  |  | 7.88 |  |  | $ | 1,142 |
Vested and expected to vest as of June 30, 2024 |  |  | 10,793,201 |  |  | $ | 12.05 |  |  |  | 7.88 |  |  | $ | 1,142 |
Exercisable as of June 30, 2024 |  |  | 4,962,290 |  |  | $ | 12.86 |  |  |  | 6.60 |  |  | $ | 821 |
The weighted average grant date fair value of stock options granted during the six months ended June 30, 2024 and 2023 was $2.50 and $22.38 per share, respectively. The intrinsic value of a stock option is the difference between the market price of the common stock at measurement date and the exercise price of the option. The total intrinsic value of stock options exercised during the six months ended June 30, 2024 and 2023 was $0.5 million and $15.3 million, respectively. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. The following assumptions were used in the Black-Scholes option pricing model to estimate the fair value of stock options granted to employees under the Company’s Plans during the periods presented:
|  | Six months ended |
|  | June 30, |
|  | 2024 |  |  | 2023 |
Risk-free interest rate |  | 3.9% - 4.7% |  |  | 3.4% - 4.8% |
Expected volatility |  | 99.7% - 102.6% |  |  | 68.4% - 73.5% |
Expected term (in years) |  | 5.5 - 10.0 |  |  | 0.4 - 10.0 |
Expected dividend yield |  |  | — |  |  |  | — |
During the six months ended June 30, 2023, the Company recorded incremental stock-based compensation expense of approximately $0.1 million pertaining to the modification of stock options in connection with the termination of one employee. The modifications during the six months ended June 30, 2023 provided for an acceleration of unvested options, resulting in a change in compensation expense that was immediately recognized. As of June 30, 2024, unrecognized stock-based compensation was $39.0 million which is expected to be recognized over the weighted average period of 2.3 years. Restricted Stock Awards The Company grants restricted stock awards pursuant to the Plans and satisfies such grants through the issuance of new shares. Restricted stock awards generally vest over a period of three years. Upon the termination of service of a restricted stockholder, the Company has the option to repurchase any unvested shares and based on this, restricted stock awards are not included in outstanding common stock until fully vested. During the six months ended June 30, 2024 and 2023, the Company did no t repurchase any unvested shares. The following table summarizes restricted stock award activity for the six months ended June 30, 2024:
|  |  |  |  | Weighted |
|  |  |  |  | Average |
|  |  |  |  | Grant Date |
|  | Number |  |  | Fair Value |
|  | of Shares |  |  | Per Share |
Unvested balance as of December 31, 2023 |  |  | 13,236 |  |  | $ | 3.45 |
Vested |  |  | (13,236 | ) |  |  | 3.45 |
Unvested balance as of June 30, 2024 |  |  | — |  |  | $ | — |
The Company records a liability for unvested restricted stock awards subject to repurchase and reduces the liability as the underlying shares vest. The liability was $0 as of June 30, 2024 and immaterial as of June 30, 2023. The total fair value of restricted stock awards vested during the six months ended June 30, 2024 and 2023 was immaterial. As of June 30, 2024, all stock-based compensation expense pertaining to restricted stock awards was recognized. Restricted Stock Units The Company grants restricted stock units pursuant to the Plans and satisfies such grants through the issuance of new shares as they vest. Restricted stock units generally vest over a period of four years. The following table summarizes restricted stock unit activity for the six months ended June 30, 2024:
|  |  |  |  | Weighted |
|  |  |  |  | Average |
|  |  |  |  | Grant Date |
|  | Number |  |  | Fair Value |
|  | of Shares |  |  | Per Share |
Unvested Balance as of December 31, 2023 |  |  | 530,726 |  |  | $ | 21.11 |
Granted |  |  | — |  |  | $ | — |
Vested |  |  | (51,558 | ) |  | $ | 31.46 |
Forfeited |  |  | (34,450 | ) |  | $ | 28.65 |
Unvested balance as of June 30, 2024 |  |  | 444,718 |  |  | $ | 19.33 |
As of June 30, 2024, there was approximately $6.2 million of unrecognized stock-based compensation cost pertaining to restricted stock units that will be recognized over a weighted average period of 1.8 years. Employee Stock Purchase Plan In October 2021, the board of directors and stockholders approved the 2021 Employee Stock Purchase Plan (“ESPP”) which became effective on October 19, 2021. The maximum number of shares of common stock that will be made available for sale under the ESPP is equal to 510,000 shares of common stock. In addition, the number of shares of common stock available for issuance under the ESPP will be increased on the first day of each fiscal year, beginning with fiscal year 2023, in an amount equal to the lesser of 1,020,000 shares of common stock, 1% of the outstanding shares of common stock on the last day of the immediately preceding fiscal year or such number of common shares determined by the board of directors. On January 1, 2024, the number of shares of common stock that are available for sale under the ESPP was automatically increased by 592,523 shares. Participating employees purchase stock under the ESPP at a price equal to the lower of 85% of the closing price on the applicable offering commencement date or 85% of the closing price on the applicable offering termination date. The ESPP provides for two offering periods of six months’ duration with purchase periods terminating on either May 15 or November 15. Contributions under the ESPP are limited to a maximum of 15% of an employee’s eligible compensation and a maximum of 3,000 shares per year. During the six months ended June 30, 2024 and 2023, 56,903 and 9,765 s hares, respectively, were issued under the ESPP at average share prices of $2.01 and $21.91, respectively.

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