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Stock-based Compensation
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Stock-based Compensation Stock-based Compensation
Employee Stock Purchase Plan
In May 2017, the Company’s stockholders approved the 2016 Employee Stock Purchase Plan (the 2016 ESPP). The 2016 ESPP is structured as a qualified employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended, and is not subject to the provisions of the Employee Retirement Income Security Act of 1974. The Company reserved 800,000 shares of common stock for issuance under the 2016 ESPP. The 2016 ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 10% of their eligible compensation, subject to any plan limitations. The 2016 ESPP provides for six-month offering periods ending on May 31 and November 30 of each year. At the end of each offering period, employees are able to purchase shares at 85% of the fair market value of the Company’s common stock on the last day of the offering period. During the year ended December 31, 2023, employees purchased 81,541 shares of common stock under the 2016 ESPP for net proceeds to the Company of approximately $0.5 million.
Employee Stock Incentive Plans
In October 2013, the Company implemented the 2013 Equity Incentive Plan (2013 Plan). The 2013 Plan provides for the grant of stock options and other stock-based awards, as well as cash-based performance awards. In May 2023, the 2013 Plan was terminated, and no further awards may be issued under the plan. If an option granted under the 2013 Plan expires or terminates for any reason without having been fully exercised, if any shares of restricted stock are forfeited, or if any award terminates, expires or is settled without all or a portion of the shares of common stock covered by the award being issued, such shares will become available for issuance under the 2023 Equity Incentive Plan (2023 Plan). As of December 31, 2023, under the 2013 Plan, there were options to purchase an aggregate of 11,805,515 shares of common stock outstanding at a weighted average exercise price of $15.45 per share. As of December 31, 2023, there were 854,114 unvested restricted stock units (RSUs) outstanding under the 2013 Plan.
The 2023 Plan was effective as of stockholder approval in May 2023. The 2023 Plan provides for grants of stock options and other stock-based awards, as well as cash-based performance awards. Initially, the maximum number of shares of the Company’s common stock that may be issued under the 2023 Plan will not exceed 4,850,000 shares. If an option expires or terminates for any reason without having been fully exercised, if any shares of restricted stock are forfeited, or if any award terminates, expires or is settled without all or a portion of the shares of common stock covered by the award being issued, such shares are available for the grant of additional awards. However, any shares that are withheld (or delivered) to pay withholding taxes or to pay the exercise price of an option are not available for the grant of additional awards. As of December 31, 2023, under the 2023 Plan, there were options to purchase an aggregate of 418,122 shares of common stock outstanding at a weighted
average exercise price of $5.31 per share. As of December 31, 2023, there were 51,500 unvested RSUs outstanding under the 2023 Plan.
The following stock-based compensation amounts were recognized for the periods indicated (in thousands):
Year Ended December 31,
202320222021
Research and development$9,190 $10,094 $11,337 
Selling, general and administrative9,183 10,344 11,789 
Total stock-based compensation expense$18,373 $20,438 $23,126 
Employee Stock Options
The Company accounts for stock-based compensation to employees and non-employee directors in accordance with ASC Topic 718, Compensation – Stock Compensation. The Company estimates the fair value of stock option awards using the Black-Scholes option pricing model on the date of grant using the assumptions in the table below. Stock options granted to employees generally vest over four years and have a term of ten years. Stock-based compensation expense for stock options is recognized as expense over the requisite service period, which is the vesting period. As the Company has not paid dividends since inception, nor does it expect to pay any dividends for the foreseeable future, the expected dividend yield assumption is zero. The expected volatility is based on the historical stock volatility of the Company’s own common stock over a period equal to the expected term of the options. The risk-free rate of the stock options is based on the U.S. Treasury rate in effect at the time of grant for the expected term of the stock options. The Company used the simplified method to calculate expected term during 2021. Beginning in 2022, the computation of expected term was determined based on the historical experience with similar awards, giving consideration to the contractual terms of the share-based awards, vesting schedules and expectations of future employee behavior. In addition, the Company estimates the expected forfeiture rate and only recognizes expense for those shares expected to vest. The Company estimates the forfeiture rate based on historical experience and its expectations regarding future pre-vesting termination behavior of employees. The Company reviews its estimate of the expected forfeiture rate annually, and stock-based compensation expense is adjusted accordingly.
Year Ended December 31,
202320222021
Expected dividend yield0%0%0%
Expected volatility
76% -96%
88% - 92%
86% - 87%
Risk-free interest rate
3.5% - 4.8%
1.4% - 4.0%
0.6% - 1.6%
Expected term5.88 years5.95 years
6.25 years
The following table summarizes stock option activity for 2023:
Shares
Weighted-Average
Exercise Price
Weighted-Average
Remaining
Contractual Term
(Years)
Aggregate Intrinsic Value
(in thousands)
Outstanding, December 31, 2022
10,098,929 $18.58 6.5
Granted3,367,777 4.97 
Exercised(34,608)3.73 
Forfeited(365,942)9.49 
Expired(842,519)19.12 
Outstanding, December 31, 2023
12,223,637 $15.11 6.7$16,974 
As of December 31, 2023:
Exercisable7,892,753 $18.92 5.6$4,509 
Vested and expected to vest11,346,207 $15.59 6.5$14,692 
During 2023, 2022 and 2021 the Company issued 34,608, 120,900 and 332,767 shares of common stock, respectively, in conjunction with stock option exercises. The Company received cash proceeds from the exercise of stock options of approximately $0.1 million, $0.2 million and $5.8 million during 2023, 2022 and 2021, respectively.
The weighted-average grant-date fair value of options granted during 2023, 2022 and 2021 was $3.83, $6.84 and $15.20 per share, respectively. The total intrinsic value of options exercised during 2023, 2022 and 2021 was approximately $0.1 million, $0.6 million and $3.3 million, respectively. The total fair value of stock options which vested during 2023, 2022 and 2021 was $16.4 million, $19.6 million and $20.2 million, respectively. As of December 31, 2023, the total unrecognized compensation expense related to non-vested stock options, net of related forfeiture estimates, was $19.5 million, which the Company expects to recognize over a weighted-average period of approximately 1.2 years.
Restricted Stock Units
The Company awards RSUs to employees. RSUs are valued based on the closing price of the Company’s common stock on the date of the grant. The fair value of RSUs is recognized and amortized on a straight-line basis over the requisite service period of the award.
The following table summarizes RSU activity for 2023:
Shares
Weighted-Average
Grant Date Fair Value
Outstanding, December 31, 2022415,084 $8.83 
Granted707,635 4.88 
Vested(135,396)8.32 
Forfeited or expired(81,709)7.17 
Outstanding, December 31, 2023905,614 $5.97 
At December 31, 2023, there was $2.3 million of total unrecognized compensation cost related to unvested RSUs, which the Company expects to recognize over a remaining weighted-average period of 1.2 years.