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Stock-Based Compensation
9 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock Based Compensation
In June 2023, our Board of Directors (the Board) and stockholders approved the 2023 Equity Incentive Plan (the 2023 Plan), which became effective as of June 14, 2023, and superseded the 2013 Equity Incentive Plan (the 2013 Plan). No additional awards may be granted under the 2013 Plan.
The 2023 Plan reserve consists of 3,000,000 shares and the remaining available shares from the 2013 Plan as of the effective date of the 2023 Plan. In addition, any shares of common stock covered by awards granted under the 2013 Plan that terminate on or after June 14, 2023 by expiration, forfeiture, cancellation, or other means without the issuance of such shares will be added to the 2023 Plan reserve. The 2023 Plan does not include a provision for an automatic increase in shares, also known as an evergreen provision.
As of September 30, 2024, the total number of shares of common stock available for issuance under the 2023 Plan is 18,617,423, which includes shares of common stock that were available for issuance under the 2013 Plan as of the
effective date of the 2023 Plan. As of September 30, 2024, a total of 2,510,949 options have been granted under the 2023 Plan.
In November 2013, the Board and our stockholders approved the ESPP, which became effective as of December 5, 2013. As of September 30, 2024, the total number of shares of common stock available for issuance under the ESPP is 987,344. Unless otherwise determined by the Board, beginning on January 1, 2014, and continuing until January 1, 2023, the total number of shares of common stock available for issuance under the ESPP automatically increased annually on January 1 by the lesser of (i) 1% of the total number of issued and outstanding shares of common stock as of December 31 of the immediately preceding year, or (ii) 621,814 shares of common stock. The automatic increase has expired, and the number of shares of common stock available for issuance under the ESPP was not increased on January 1, 2024. As of September 30, 2024, we have issued a total of 787,474 shares of common stock under the ESPP.
During the nine months ended September 30, 2024, the Company awarded 1,026,220 RSUs under the 2023 Plan to certain employees and non-employee directors. The standard vesting of these awards is generally in three equal annual installments and is contingent on an employee’s continued service to the Company. The fair value of these awards is determined based on the intrinsic value of the stock on the date of grant and will be recognized as stock-based compensation expense over the requisite service period. As of September 30, 2024, a total of 1,112,887 RSUs have been granted under the 2023 Plan.
The Company extended vesting periods and expiration dates of equity awards for employees who retired in April 2024. There was a $3.1 million incremental expense as a result of the extension of the expiration dates, and there was a $1.2 million expense as a result of the extension of the vesting periods.
Total employee, director and non-employee stock-based compensation expense recognized for the three and nine months ended September 30, 2024 and 2023 are as follows (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024202320242023
General and administrative $5,158 $4,487 $18,326 $13,234 
Research and development 7,180 8,409 22,623 25,824 
$12,338 $12,896 $40,949 $39,058 
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024202320242023
Stock options$6,760 $6,314 $24,578 $20,139 
ESPP206 307 623 970 
RSUs5,372 6,275 15,748 17,949 
$12,338 $12,896 $40,949 $39,058 
The following table summarizes option activity under our stock plans and related information:
Number of
Shares Subject
to Outstanding
Options
Weighted
Average
Exercise
Price
(Per
Share)
Weighted
Average
Remaining
Contractual
Term
(in years)
Aggregate
Intrinsic
Value
(in thousands)
Balance at December 31, 202311,142,986$29.60 6.03$9,977 
Options granted2,297,551$22.21 
Options forfeited(614,922)$32.36 
Options exercised(222,149)$11.76 
Balance at September 30, 202412,603,466$28.44 5.96$6,942 
Exercisable8,522,788$29.56 4.62$6,550 
We calculate the intrinsic value as the difference between the exercise price of the options and the closing price of common stock of $20.11 per share as of September 30, 2024.
The weighted-average fair value of options granted during the nine-month periods ended September 30, 2024 and 2023 were $22.21 and $30.07 per share, respectively. There were 2,068,582 options granted during the nine-month period ended September 30, 2023. We estimated the fair value of each equity award, including stock options and shares issued under our ESPP, using the Black-Scholes option-pricing model based on the date of grant of such stock option or ESPP share issuance date, with the following weighted average assumptions for the three and nine months ended September 30, 2024 and 2023:
OptionsOptions
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024202320242023
Expected term (years)5.86.16.46.1
Expected volatility50.8 %50.0 %50.1 %50.5 %
Risk-free interest rate4.15 %4.43 %4.18 %4.18 %
Expected dividend yield— %— %— %— %
ESPPESPP
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024202320242023
Expected term (years)
0.5 - 2.0
0.5 - 2.0
0.5 - 2.0
0.5 -2.0
Expected volatility
43.0% - 44.6%
38.2% - 55.7%
43.0% - 44.6%
38.2% - 55.7%
Risk-free interest rate
4.71% - 5.40%
0.13% - 5.39%
4.71% - 5.40%
0.13% - 5.39%
Expected dividend yield— %— %— %— %
As of September 30, 2024, the unamortized compensation expense related to unvested stock options was $50.4 million. The remaining unamortized compensation expense will be recognized over the next 2.5 years. As of September 30, 2024, the unamortized compensation expense under our ESPP was $1.0 million. The remaining unamortized expense will be recognized over the next 1.2 years.
The following table summarizes the RSU activity for the nine-month period ended September 30, 2024:
Restricted
Stock
Units
Weighted
Average Grant
Date Fair Value
(Per unit)
Unvested RSUs at December 31, 20231,490,040$30.66 
Granted1,026,22022.31 
Vested(595,399)31.49 
Forfeited(167,097)28.89 
Unvested RSUs at September 30, 20241,753,764$25.57 
As of September 30, 2024, the unamortized compensation expense related to unvested RSUs was $31.6 million. The remaining unamortized expense will be recognized over the next 1.9 years.