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Equity Incentive Plans, Equity Inducement Plans, Employee Stock Purchase Plan and Stock-Based Compensation | 3 Months Ended
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Mar. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Equity Incentive Plans, Equity Inducement Plans, Employee Stock Purchase Plan and Stock-Based Compensation | . Equity Incentive Plans, Equity Inducement Plans, Employee Stock Purchase Plan and Stock-Based Compensation 2004 Equity Incentive Plan, 2018 Equity Incentive Plan, 2021 Equity Inducement Plan, and Amended and Restated 2021 Equity Inducement Plan In September 2018, the Company adopted the 2018 Equit y Incentive Plan (“2018 Plan”), which became effective on September 25, 2018. As a result, the Company will not grant any additional awards under the 2004 Equity Incentive Plan (“2004 Plan”). The terms of the 2004 Plan and applicable award agreements will continue to govern any outstanding awards thereunder. In addition to the shares of common stock reserved for future issuance under the 2004 Plan that were added to the 2018 Plan upon its effective date, the Company initially reserved 2,300,000 shares of common stock for issuance under the 2018 Plan. In addition, the number of shares of common stock reserved for issuance under the 2018 Plan will automatically increase on the first day of January for a period of up to ten years, commencing on January 1, 2019, in an amount equal to 5% of the total number of shares of the Company’s capital stock outstanding on the last day of the preceding year (rounded to the nearest whole share), or a lesser number of shares determined by the Company’s board of directors. As a result, common stock reserved for issuance under the 2018 Plan was increased by 2,874,977 shares on January 1, 2023. In August 2021, the Company adopted the 2021 Equity Inducement Plan (“2021 Plan”), which became effective on August 4, 2021. Upon its effective date, the Company initially reserved 750,000 shares of common stock for issuance pursuant to non-qualified stock options and restricted stock units (“RSUs”) under the 2021 Plan. In accordance with Rule 5635(c)(4) of the Nasdaq listing rules, equity awards under the 2021 Plan may only be made to an employee if he or she is granted such equity awards in connection with his or her commencement of employment with the Company and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary. In addition, awards under the 2021 Plan may only be made to employees who have not previously been an employee or member of the Board (or any parent or subsidiary of the Company) or following a bona fide period of non-employment of the employee by the Company (or a parent or subsidiary of the Company). At all times the Company will reserve and keep available a sufficient number of shares as will be required to satisfy the requirements of all outstanding awards granted under the 2021 Plan. In August 2022, the Company amended and restated the 2021 Plan (the “Amended and Restated 2021 Plan”) and reserved an additional 750,000 shares of common stock available for issuance under the Amended and Restated 2021 Plan to be granted by the Company to certain employees as a material inducement to their acceptance of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). Additionally, in February 2023, the Company amended and restated the 2021 Plan and reserved an additional 500,000 shares of common stock available for issuance under the Amended and Restated 2021 Plan to be granted by the Company to certain employees as a material inducement to their acceptance of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). The total number of shares reserved for issuance pursuant to the Amended and Restated 2021 Plan is 2,000,000 shares. As of March 31, 2023, the Company had a total of 1,705,910 shares available for grant under the 2018 Plan and the 2021 Plan. The following table summarizes option activity under the Company’s 2004 Plan, 2018 Plan and 2021 Plan:
|  | Shares |  |  | Weighted- Average Exercise Price |
Stock options outstanding at December 31, 2022 |  |  | 7,310,611 |  |  | $ | 12.68 |
Granted |  |  | 1,118,000 |  |  |  | 5.78 |
Exercised |  |  | (53,060 | ) |  |  | 5.92 |
Canceled and forfeited |  |  | (38,952 | ) |  |  | 12.35 |
Stock options outstanding at March 31, 2023 |  |  | 8,336,599 |  |  |  | 11.80 |
Stock options exercisable at March 31, 2023 |  |  | 5,386,257 |  |  | $ | 13.04 |
Restricted Stock Units During the three months ended March 31, 2023, the Company granted 2,223,725 shares of restricted common stock units (“RSUs”) to certain employees. These RSUs vest annually and will become fully vested over four years. A summary of the status and activity of non-vested RSUs during the three months ended March 31, 2023 is as follows:
|  | Number of shares |  |  | Weighted Average Grant-Date Fair Value |
Non-vested December 31, 2022 |  |  | 3,958,478 |  |  | $ | 11.70 |
Granted |  |  | 2,223,725 |  |  |  | 5.82 |
Vested and released |  |  | (801,769 | ) |  |  | 12.93 |
Canceled and forfeited |  |  | (25,834 | ) |  |  | 13.54 |
Non-vested March 31, 2023 |  |  | 5,354,600 |  |  | $ | 9.07 |
2018 Employee Stock Purchase Plan In September 2018, the Company adopted the 201 8 Employee Stock Purchase Plan (“ESPP”), which became effective on September 26, 2018, in order to enable eligible employees to purchase shares of the Company’s common stock. The Company initially reserved 230,000 shares of common stock for sale under the ESPP. The aggregate number of shares reserved for sale under the ESPP will automatically increase on the first day of January for a period of up to ten years, commencing on January 1, 2019, in an amount equal to 1% of the total number of shares of the Company’s capital stock outstanding on the last day of the preceding year (rounded to the nearest whole share), or a lesser number of shares determined by the Company’s board of directors. As a result, common stock reserved for issuance under the ESPP was increased by 574,995 shares on January 1, 2023. The aggregate number of shares issued over the term of the Company’s ESPP, subject to stock-splits, recapitalizations or similar events, may not exceed 2,300,000 shares of the Company’s common stock. As of March 31, 20 23, 983,316 shares had been purchased and 1,201,930 shares were available for future issuance under the ESPP. Stock-Based Compensation Expense The Company believes that the fair value of the stock options, RSUs and ESPP shares is more reliably measurable than the fair value of services received. Total stock-based compensation expense recognized was as follows:
|  | Three Months Ended |
|  | March 31, |
|  | 2023 |  |  | 2022 |
|  | (in thousands) |
Research and development expense: |  | $ | 2,821 |  |  | $ | 2,613 |
General and administrative expense: |  |  | 3,200 |  |  |  | 4,361 |
Total |  | $ | 6,021 |  |  | $ | 6,974 |
As of March 31, 2023, unrecogni zed stock-based compensation expense related to the unvested stock options and RSUs granted was $18.0 million and $45.0 million, respectively. The remaining unrecognized compensation cost related to the unvested stock options and RSUs is expected to be recognized over a weighted-average period of 2.4 years and 2.9 years, respectively. As of March 31, 2023, there was $0.5 million of unrecognized stock-based compensation expense related to the ESPP. As of March 31, 2022, unrecognized stock-based compensation expense related to the unvested stock options and RSUs granted was $25.4 million and $47.4 million, respectively. The remaining unrecognized compensation cost related to the unvested stock options and RSUs is expected to be recognized over a weighted-average period of 2.6 years and 3.3 years, respectively. As of March 31, 2022, there is $0.4 million of unrecognized stock-based compensation expense related to the ESPP.

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