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Share-Based Compensation | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
Share-Based Compensation | 11. Share-Based Compensation Equity Incentive Plan 2015 Equity Incentive Plan The Company granted options under its 2015 Equity Incentive Plan (the "2015 Plan"). The 2015 Plan allowed for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock unit awards and other stock awards, although only stock options were awarded under the 2015 Plan. Awards could be made to officers, directors, employees, non-employee directors, and consultants of the Company. In connection with the Board of Directors’ and stockholders’ approval of the 2020 Plan, the 2015 Plan was terminated as to future awards and any options then outstanding under the 2015 Plan remained outstanding and effective. As of December 31, 2022, there were an aggregate of 1,344,048 shares of common stock issuable upon the exercise of outstanding options issued under the 2015 Plan. 2020 Performance Incentive Plan The Company’s 2020 Performance Incentive Plan (the "2020 Plan") which was adopted by the Company’s board of directors in June 2020 and approved by the Company’s stockholders in July 2020, became effective upon the consummation of the IPO in July 2020. The 2020 Plan allows for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, stock bonuses, restricted stock, stock units and other forms of awards including cash awards to its officers, directors, employees, consultants and advisors. As of December 31, 2022, a total of 5,945,002 shares of the Company’s common stock were authorized for issuance with respect to awards granted under the 2020 Plan (this number of shares gives effect to the annual increases in the 2020 Plan share limit, as described in the next sentence). The share limit will automatically increase on the first trading day in January of each year by an amount equal to the lesser of (1) 5% of the total number of outstanding shares of the Company’s common stock on the last trading day in December in the prior year, or (2) such lesser number as determined by the Company’s board of directors. Any shares subject to awards granted under the 2020 Plan or the 2015 Plan that are not paid, delivered or exercised before they expire or are canceled or terminated, or otherwise fail to vest, as well as shares used to pay the purchase or exercise price of such awards or related tax withholding obligations, will become available for new award grants under the 2020 Plan. A total of 1,775,102 shares was available for issuance under the 2020 Plan as of December 31, 2022. The following table summarizes the stock option activity during the year ended December 31, 2022 (in thousands, except number of shares, exercise prices and contractual term):
|  | Number of shares |  |  | Weighted-average exercise price |  |  | Weighted-average remaining contractual term (in years) |  |  | Aggregate Intrinsic Value |
Outstanding at December 31, 2021 |  |  | 4,204,686 |  |  | $ | 19.19 |  |  |  | 8.2 |  |  |  |
Granted |  |  | 2,327,820 |  |  |  | 12.61 |  |  |  |  |  |  |
Exercised |  |  | (383,120 | ) |  |  | 3.62 |  |  |  |  |  |  |
Forfeited |  |  | (630,111 | ) |  |  | 21.99 |  |  |  |  |  |  |
Outstanding at December 31, 2022 |  |  | 5,519,275 |  |  | $ | 17.17 |  |  |  | 8.1 |  |  | $ | 2,915 |
Exercisable at December 31, 2022 |  |  | 2,337,753 |  |  | $ | 17.49 |  |  |  | 7.4 |  |  | $ | 1,957 |
Vested and expected to vest at December 31, 2022 |  |  | 5,519,275 |  |  | $ | 17.17 |  |  |  | 8.1 |  |  | $ | 2,915 |
The aggregate intrinsic value represents the difference between the exercise price of stock options and the quoted closing market price of the Company’s common stock on the applicable date for all in-the-money stock options. Additional information related to the Company’s stock options is summarized below (in thousands, except per share amounts):
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Weighted-average grant-date fair value of stock option grants per share |  | $ | 8.60 |  |  | $ | 30.87 |
Intrinsic value of options exercised |  | $ | 4,268 |  |  | $ | 9,991 |
The following table summarizes the restricted stock unit activity during the year ended December 31, 2022:
|  | Number of shares |  |  | Weighted-average grant date fair value per share |  |  | Weighted- average remaining contractual term (in years) |
Outstanding at December 31, 2021 |  |  | — |  |  | $ | — |  |  |  |
Granted |  |  | 389,388 |  |  |  | 12.62 |  |  |  |
Forfeited |  |  | (32,660 | ) |  |  | 12.15 |  |  |  |
Vested |  |  | — |  |  |  | — |  |  |  |
Outstanding at December 31, 2022 |  |  | 356,728 |  |  | $ | 12.66 |  |  |  | 1.7 |
Employee Stock Purchase Plan The Company’s 2020 Employee Stock Purchase Plan (the "ESPP"), which was adopted by the Company’s board of directors in June 2020 and approved by the Company’s stockholders in July 2020, became effective upon the consummation of the IPO. A total of 952,524 shares of the Company’s common stock were authorized for issuance under the ESPP. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations. The ESPP provides for six-month offering periods, and at the end of each offering period, employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the last trading day of the offering period. During 2022, 61,754 shares were issued under the ESPP resulting in aggregate cash proceeds of $0.4 million. There were no ESPP purchases in 2021. As of December 31, 2022, 890,770 shares remained available for issuance under the ESPP (after giving effect to share purchases made under the ESPP through and including the ESPP offering period that ended on November 30, 2022). Liability for Early Exercise of Restricted Stock Options Certain individuals were granted the ability to early exercise their stock options. The shares of common stock issued from the early exercise of unvested stock options are restricted and continue to vest in accordance with the original vesting schedule. The Company has the option to repurchase any unvested shares at the original purchase price upon any voluntary or involuntary termination. The shares purchased by the employees and non-employees pursuant to the early exercise of stock options are not deemed, for accounting purposes, to be outstanding until those shares vest. The cash received in exchange for exercised and unvested shares related to stock options granted is recorded as a liability for the early exercise of stock options on the accompanying balance sheets and will be transferred into common stock and additional paid-in capital as the shares vest. Shares subject to repurchase by the Company were 508 shares and 16,181 shares, as of December 31, 2022 and 2021, respectively, and in each case the related liability recorded under other accrued and other current liabilities in the condensed balance sheets was insignificant. Common Stock Reserved for Future Issuance As of December 31, 2022, the Company had reserved the following shares of common stock for future issuance:
|  | December 31, 2022 |
Common stock options and restricted stock units granted and outstanding |  |  | 5,876,003 |
Reserved for future equity award grants |  |  | 1,775,102 |
Reserved for future ESPP issuances |  |  | 890,770 |
|  |  | 8,541,875 |
Share-Based Compensation Expense Share-based compensation expense for the years ended December 31, 2022 and 2021 were as follows (in thousands):
|  | Year Ended December 31, |
|  | 2022 |  |  | 2021 |
Research and development |  | $ | 7,326 |  |  | $ | 6,719 |
General and administrative |  |  | 9,530 |  |  |  | 7,742 |
Total share-based compensation expense |  | $ | 16,856 |  |  | $ | 14,461 |
The total unrecognized compensation cost related to stock options was $34.2 million, which is expected to be recognized over a weighted-average remaining service period of 2.5 years as of December 31, 2022. The total unrecognized compensation cost related to restricted stock units was $3.7 million, which is expected to be recognized over a weighted-average remaining service period of 3.2 years as of December 31, 2022. As of December 31, 2022, there was $0.1 million of unrecognized compensation cost related to ESPP, which is expected to be recognized over a weighted-average remaining service period of .4 years. Fair Value Disclosures The fair value of stock options was estimated on the date of grant using the Black-Scholes option pricing model with the following range of assumptions:
|  | Year Ended December 31,
|  | 2022 |  | 2021
Options |  |  |  |
Common stock fair value |  | $5.99 - $18.44 |  | $15.35 - $54.89
Risk-free interest rate |  | 1.6% - 4.2% |  | 0.6% - 1.4%
Expected volatility |  | 75.7% - 78.9% |  | 77.3% - 79.9%
Expected term (in years) |  | 5.5 - 6.1 |  | 5.5 - 6.1
Expected dividend yield |  | — |  | —
ESPP |  |  |  |
Risk-free interest rate |  | 1.6% - 4.7% |  | —
Expected volatility |  | 63.8% - 151.9% |  | —
Expected term (in years) |  | 0.5 |  | —
Expected dividend yield |  | — |  | —
The Company recognizes compensation costs related to stock options granted to employees and nonemployees based on the estimated fair value of the awards on the date of grant, net of forfeitures. The Company generally recognizes grant-date fair value of stock options granted to employees and non-employee service providers on a straight-line basis over the requisite service period, which is generally the vesting term of the respective awards. The Company determines the fair value of stock options with a service and performance condition, or performance-based options, based on the fair value of the Company’s common stock on the date of grant. The Company accounts for the impact of forfeitures as they occur. For purposes of calculating share-based compensation, the Company estimates the fair value of stock options issued using a Black-Scholes option-pricing model. The determination of the fair value of share-based payment awards utilizing the Black-Scholes option-pricing model is affected by the Company’s stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. Expected term. The Company opted to use the “simplified method” for estimating the expected term of employee options, whereby the expected term equals the average of the vesting term and the original contractual term of the option (generally 10 years). Expected volatility. Due to the Company’s limited operating history and a lack of company specific historical and implied volatility data, the Company based its estimate of expected volatility on the historical volatilities of the common stock of comparable publicly traded biopharmaceutical companies over a period equal to the expected term of the stock option grants. The comparable companies were chosen based on their similar size, stage in the life cycle, and financial leverage to the Company. Risk-free interest rate. The risk-free rate assumption is based on the U.S. Treasury instruments with maturities similar to the expected term of the stock options. Expected dividend yield. The Company has no t issued any dividends and do no t expect to issue dividends over the life of the options, as a result the estimated dividend yield is zero.

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