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Stock Incentive Plans and Stock-Based Compensation
 9 Months Ended
Sep. 30, 2020
Share-based Payment Arrangement [Abstract]  
Stock Incentive Plans and Stock-Based Compensation Stock Incentive Plans and Stock-Based Compensation
Stock Incentive Plans
Activity under the Company’s stock plans for the nine months ended September 30, 2020 is set forth below:
   Weighted-Average 
 
Shares
Available for
Grant
Stock Options
Outstanding
Exercise
Price
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic
Value
(in thousands)
Balance as of December 31, 2019863,127 2,637,966 $13.30 
Additional options authorized856,545 — — 
Granted(577,120)577,120 $38.93 
Exercised— (332,065)$2.08 
Forfeited/Canceled84,322 (84,322)$27.02 
Balance as of September 30, 20201,226,874 2,798,699 $19.50 8.57$89,406 
Exercisable at September 30, 2020 (1)
635,351 $4.11 7.08$30,076 
(1)Vested and exercisable options. Additionally, outstanding unvested options to purchase an aggregate of 82,624 shares of common stock with a weighted-average exercise price of $2.39 per share may be exercised prior to vesting as of September 30, 2020 under early-exercise provisions. In the event of such exercise, the shares obtained upon exercise would be restricted and subject to forfeiture prior to vesting. No such early exercises have occurred as of September 30, 2020.
Employee Stock Purchase Plan
The ESPP provides for certain automatic increases in the number of shares of common stock reserved for issuance, which resulted in an additional 171,309 shares becoming available under the ESPP effective January 1, 2020. On February 28, 2020 and August 31, 2020 the Company issued 39,987 and 41,467 shares, respectively, of its common stock pursuant to scheduled purchases under the ESPP. As of September 30, 2020, 501,790 shares remained available for issuance under the ESPP.
Determining Fair Value - Summary of Assumptions
The Company uses the Black-Scholes option pricing model to estimate the fair value of each option grant on the date of grant or any other measurement date. The following table sets forth the assumptions used to determine the fair value of stock options:
 Nine Months Ended
September 30,
20202019
Average expected term (years)66
Expected stock price volatility
59.15% - 63.82%
56.74% - 59.60%
Risk-free interest rate
0.28% - 1.76%
1.61% - 2.47%
Dividend yield—%—%
The following table sets forth assumptions used to determine the fair value of the purchase rights issued under the ESPP:
 Nine Months Ended
September 30,
20202019
Average expected term (years)1.2Not applicable
Expected stock price volatility
56.80% - 100.49%
Not applicable
Risk-free interest rate
0.12% - 0.95%
Not applicable
Dividend yield—%Not applicable
The fair value of the Company’s common stock is also an assumption used to determine the fair value of stock options and purchase rights under the ESPP. Prior to the IPO, our common stock was not publicly traded, therefore the Company estimated the fair value of its common stock. Following the IPO, the fair value of the Company’s common stock is the closing selling price per share of its common stock as reported on the Nasdaq Global Market on the date of grant or other relevant determination date.
Stock-Based Compensation Expense
Stock-based compensation expense related to stock options and the ESPP is included in the statements of operations and comprehensive (loss) income as follows (in thousands):
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2020201920202019
Cost of sales$268 $13 $674 $35 
Research and development370 23 835 70 
Selling, general and administrative1,480 193 3,839 431 
Total stock-based compensation expense$2,118 $229 $5,348 $536 
For the nine months ended September 30, 2020 and 2019, the weighted-average grant date fair value of options granted was $22.07 and $3.77 per option, respectively, and the weighted-average grant date fair value of the purchase rights granted under the ESPP was $17.43 and nil per share, respectively. As of September 30, 2020, the total unrecognized compensation cost related to stock options and the ESPP was $25,118,000 and $965,000, respectively, which is expected to be recognized on a straight-line basis over a weighted-average period of 2.9 years and 1.2 years, respectively. The total unrecognized compensation costs will be adjusted for forfeitures in future periods as they occur.