v3.22.4
Stockholders’ Equity and Stock-Based Compensation
 12 Months Ended
Dec. 31, 2022
Equity [Abstract]  
Stockholders’ Equity and Stock-Based Compensation Stockholders’ Equity and Stock-Based Compensation
Common Stock
The Company is currently authorized to issue up to 400 million shares of $0.0001 par value common stock. All issued shares of common stock are entitled to vote on a 1 share/1 vote basis.
Preferred Stock
The Company is currently authorized to issue up to 10 million shares of $0.0001 par value preferred stock. No preferred stock has been issued to date.
Sale of Common Stock    
Follow-on Public Offerings
On January 12, 2021, the Company completed an underwritten public offering of 33.4 million shares of common stock, including 4.4 million shares of common stock sold pursuant to the underwriters’ exercise in full of their option to purchase additional shares. The price to the public in the offering was $3.05 per share and the underwriters purchased the shares from the Company pursuant to the underwriting agreement at a price of $2.87 per share. The gross proceeds were approximately $101.8 million before deducting underwriting discounts and commissions and other offering expenses of $0.3 million.
On January 25, 2021, the Company completed an underwritten public offering of 38.3 million shares of common stock, including 5.0 million shares of common stock sold pursuant to the underwriters’ exercise in full of their option to purchase additional shares. The price to the public in the offering was $6.00 per share and the underwriters purchased the shares from the Company pursuant to the underwriting agreement at a price of $5.64 per share. The gross proceeds to us were approximately $230.0 million before deducting underwriting discounts and commissions and other offering expenses of $0.4 million.
Shelf Registration Statements; Ladenburg and Cowen At-the-Market Facilities
In August 2020, the Company filed a shelf registration statement on Form S-3 with the SEC covering the offering, issuance and sale of up to $125 million of the Company’s securities, including up to $40 million of common stock pursuant to an At Market Issuance Sales Agreement, with Ladenburg Thalmann & Co. Inc. acting as sales agent (the “Ladenburg ATM”). In January 2021, the Company sold 6.3 million shares of common stock under the ATM at an average share price of $2.68, and received gross proceeds of approximately $16.9 million before deducting offering costs of $0.4 million. The Company terminated the Ladenburg ATM in March 2021.
On January 19, 2021, the Company filed an automatic shelf registration statement on Form S-3 with the SEC. On March 23, 2021, the Company entered into a Sales Agreement with Cowen and Company, LLC (“Cowen”) which provides for the sale, in the Company’s sole discretion, of shares of common stock having an aggregate offering price of up to $350.0 million through or to Cowen, acting as sales agent or principal, which was amended on March 9, 2023 to decrease the maximum aggregate offering price to $200.0 million for sales made on and after the date of the amendment (the “Cowen ATM”). The Company agreed to pay Cowen a commission of up to 3.0% of the aggregate gross proceeds from each sale of shares, reimburse legal fees and disbursements and provide Cowen with customary indemnification and contribution rights. In August and September 2021, the Company sold 2.3 million shares of common stock under the Cowen ATM at an average share price of $6.15 per share, and received gross proceeds of approximately $13.9 million before deducting offering costs of $0.6 million. In August 2022, the Company sold approximately 6.6 million shares of common stock under the Cowen ATM at an average share price of $3.46 per share, and received gross proceeds of approximately $23.1 million before deducting offering costs of $0.6 million.
In January and February 2023, the Company sold approximately 9.5 million shares of common stock under the Cowen ATM at an average share price of $1.60 per share, and received gross proceeds of approximately $15.2 million before deducting offering costs of $0.4 million.
Stock Warrants
A summary of the Company’s warrant activity for the year ended December 31, 2022 was as follows:
Shares of Stock under WarrantsWeighted-
Average
Exercise
Price		Weighted-
Average
Remaining
Contractual
Term		Aggregate
Intrinsic
Value
Outstanding at January 1, 2021
15,174,000 $2.34 3.76$26,841,000 
Granted— — — 
Exercised(10,794,000)0.88 58,191,000 
Canceled(24,000)3.29 — 
Outstanding at December 31, 2021
4,356,000 $5.96 1.76$785,000 
Granted— — — 
Exercised— — — 
Canceled— — — 
Outstanding at December 31, 2022
4,356,000 $5.96 0.76$273,000 
2018 Equity Incentive Plan
In August 2018, the Company’s board of directors (the “Board”) and its stockholders adopted the 2018 Equity Incentive Plan (the “2018 Plan”), as a successor to and continuation of the Company’s 2006 Equity Incentive Plan (the “2006 Plan”). Under the 2018 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then its employees, directors and consultants, including employees and consultants of its affiliates. The Company has initially reserved 1.5 million shares of common stock for issuance under the 2018 Plan, which is the sum of (1) 1.0 million new shares, plus (2) the number of shares that remained available for issuance under the 2006 Plan at the time the 2018 Plan became effective, and (3) any shares subject to outstanding stock options or other stock awards that were granted under the 2006 Plan that would have otherwise returned to the 2006 Plan. In addition, the number of shares of common stock reserved for issuance under the 2018 Plan will automatically increase on January 1 of each calendar year, starting on January 1, 2019 through January 1, 2028, 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 calendar month before the date of each automatic increase, or a lesser number of shares determined by the Board. As of December 31, 2022, 8.6 million shares of common stock were authorized for future grants under the 2018 Plan.
2020 Inducement Plan
In August 2020, the Company’s Board adopted the 2020 Inducement Plan, which was further amended by the Board on October 6, 2021, and November 21, 2022. Under the 2020 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units and other awards to individuals who are then its employees, directors and consultants, including employees and consultants of its affiliates. The Company initially reserved 2.1 million shares of common stock for issuance under the 2020 Plan. An additional 1.0 million of shares of common stock were reserved for issuance under the Inducement Plan on each of October 6, 2021 and November 21, 2022 for a total of 4.1 million shares pursuant to amendments approved by the Board. As of December 31, 2022, there were approximately 2.1 million shares of common stock authorized for future grants under the 2020 Plan.
Stock Options
A summary of the Company’s stock option activity is as follows:   
Shares of Stock under Stock Options
Weighted-
Average
Exercise
Price 
Weighted-
Average
Remaining
Contractual
Term  
Aggregate
Intrinsic
Value  
Outstanding at January 1, 2022
12,765,000$4.97 8.9$7,891,000 
Granted16,148,0002.12 
Exercised(467,000)0.74 580,000 
Canceled(4,424,000)4.18 
Outstanding at December 31, 2022
24,022,0003.288.52,068,000 
Vested and exercisable at December 31, 2022
7,791,000$3.79 7.5$1,513,000 
The weighted-average grant date fair value of stock option grants during the years ended December 31, 2022 and 2021 was $1.35 and $4.35, respectively. The total intrinsic value of the stock options exercised during the years ended December 31, 2022 and 2021 were $0.6 million and $2.5 million, respectively. The contractual term of stock options granted to employees
was 10 years, which is also the maximum contractual term permitted for stock options (and stock appreciation rights) issued under the 2018 Plan. Stock options generally vest or become exercisable monthly over a four-year period.
Restricted Stock
Restricted Stock
A restricted stock award in the amount of 5.0 million shares with a grant date fair value of $5.20 a share was granted as part of the acquisition of BioDiscovery. One-third of the Restricted Shares was scheduled to vest on October 18, 2022 and one-twelfth of the Restricted Shares was scheduled to vest every three months following October 18, 2022, subject to continuous service of the key employee. The fair value of the restricted stock award was based on the market value of common stock as of the date of grant and was amortized to stock-based compensation expense over the service period.
On October 4, 2022, the restricted stock award was modified due to the change in employment status of the key employee from full time to emeritus. As a result of the modification, the restricted stock award vested in full on October 4, 2022. The award was revalued on the modification date, resulting in a modified grant date fair value of $2.04 a share ($15.8 million less than the initial grant date fair value of the award). The fair value of the modified restricted stock award was based on the market value of common stock as of the modification date.
Restricted Stock Units and Performance Stock Units
The Company issues restricted stock units (RSU) and performance stock units (PSU). The Company grants restricted stock pursuant to the 2018 Plan and satisfy such grants through the issuance of new shares. RSUs are share awards that, upon vesting, will deliver to the holder shares of our common stock. RSUs generally vest over a two-year period with equal vesting annually. We issue PSUs for which the number of shares issuable at the end of a four-year performance period is based on our performance relative to specified revenue targets and continued employment through the vesting period.
Restricted stock activity was as follows:
Stock UnitsWeighted- Average Grant Date Fair Value per Share
Outstanding at January 1, 2022
361,000$4.74 
Granted——
Released(265,000)4.74
Forfeited—— 
Outstanding at December 31, 2022
96,000$4.74
The total intrinsic value of the RSUs that vested was $1.3 million during fiscal 2022, determined as of the date of vesting. The weighted average remaining contractual term for the RSUs is 0.4 years as of December 31, 2022.
Performance stock activity was as follows:
Stock UnitsWeighted- Average Grant Date Fair Value per Share
Outstanding at January 1, 2022
290,000$4.74 
Granted——
Released——
Forfeited——
Outstanding at December 31, 2022
290,000$4.74
The weighted average remaining contractual term for the PSUs is 2.4 years as of December 31, 2022
Stock-Based Compensation Expense
The Company recognized stock-based compensation expense for the years ended December 31, 2022 and 2021 was as follows: 
Years Ended December 31,
20222021
Research and development$13,402,000 $3,531,000 
General and administrative9,015,000 6,188,000 
Total stock-based compensation expense$22,417,000 $9,719,000 
The weighted-average assumptions used in the Black-Scholes-Merton option pricing model to determine the fair value of the employee stock option grants were as follows:
Years Ended December 31,
20222021
Risk-free interest rate2.4%1.1%
Expected volatility68.0%76.2%
Expected term (in years)5.86.0
Expected dividend yield0.0%0.0%
Risk-free interest rate. The risk-free rate assumption is based on the U.S. Treasury instruments, the terms of which were consistent with the expected term of the Company’s stock options.
Expected volatility. Due to the Company’s limited operating history and lack of company-specific historical or implied volatility as a private company, the expected volatility assumption was determined by examining the historical volatilities of a group of industry peers whose share prices are publicly available.
Expected term. The expected term of stock options represents the weighted-average period the stock options are expected to be outstanding. The Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded. As a result, the Company uses the simplified method for estimating the expected term as provided by the Securities and Exchange Commission. The simplified method calculates the expected term as the average of the time-to-vesting and the contractual life of the options.
Expected dividend yield. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has not paid and does not intend to pay dividends.
Forfeitures. The Company reduces stock-based compensation expense for actual forfeitures during the period.
Unrecognized Stock-Based Compensation Expense
As of December 31, 2022, the unrecognized compensation expense for all non-vested share-based awards was $31.8 million and is expected to be recognized as expense over a weighted-average period of 2.7 years.
Employee Stock Purchase Plan
In August 2018, the Board and the Company’s stockholders adopted the 2018 Employee Stock Purchase Plan (the “ESPP”). A total of 0.2 million shares of common stock were initially reserved for issuance under the ESPP. In addition, the number shares of common stock reserved for issuance under the ESPP will automatically increase on January 1 of each calendar year, beginning on January 1, 2019, through January 1, 2028, by the lesser of (1) 1% of the total number of shares of the Company’s common stock outstanding on the last day of the calendar month before the date of the automatic increase, (2) 220,000 shares, or (3) a lesser number of shares as determined by the Board. As of December 31, 2022, 0.1 million shares of common stock were authorized for future grants under the ESPP.
Executive Option Grants and RSUs
On February 15, 2023, the compensation committee of the Company’s board of directors granted various executive officers stock options to purchase an aggregate of 3.3 million shares of common stock at an exercise price of $1.63 per share, and RSUs amounting to 0.7 million shares of common stock at a grant date fair value of $1.63 per share, in each case with an effective grant date and vesting commencement date of February 15, 2023 (the “Grant Date”). These stock option grants and RSUs were issued from the 2018 Plan. The shares subject to the option shall vest monthly over 48 months beginning on the one-month anniversary of the Grant Date, such that the option shall be fully vested and exercisable on the four-year anniversary of the Grant Date. The RSUs shall vest monthly over 48 months beginning one year after the Grant Date, and the balance of the shares
vest in a series of three successive equal annual installments measured from the first anniversary of the Grant Date, such that the option shall be fully vested and exercisable on the four-year anniversary of the Grant Date.