Stock-based Compensation

9 Months Ended

Sep. 30, 2021

Disclosure Text Block

Stock-based Compensation

10. Stock-based compensation

2015 Stock Option and Incentive Plan

In 2015, the Company’s board of directors and stockholders approved the 2015 Stock Option and Incentive Plan (the 2015 Plan), which replaced the Company’s 2011 Stock Option and Grant Plan, as amended (the 2011 Plan). The 2015 Plan includes incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, performance share awards and cash-based awards. The Company initially reserved a total of 1,460,084 shares of common stock for the issuance of awards under the 2015 Plan. The 2015 Plan provides that the number of shares reserved and available for issuance under the 2015 Plan will be cumulatively increased on January 1 of each calendar year by 4% of the number of shares of common stock issued and outstanding on the immediately preceding December 31 or such lesser amount as specified by the compensation committee of the board of directors. For the calendar year beginning January 1, 2021, the number of shares reserved for issuance under the 2015 Plan was increased by 2,311,741 shares. In addition, the total number of shares reserved for issuance is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. As of September 30, 2021, there were 2,999,706 shares available for future grant under the 2015 Plan.

2020 Inducement Plan

In March 2020, the Company’s board of directors adopted the 2020 Inducement Plan (the Inducement Plan), pursuant to which the Company may grant, subject to the terms of the Inducement Plan and Nasdaq rules, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units, and other stock-based awards. The Company initially reserved a total of 1,000,000 shares of common stock for the issuance of awards under the Inducement Plan. The number of shares reserved and available for issuance under the Inducement Plan can be increased at any time with the approval of the Company’s board of directors. The Inducement Plan permits the board of directors or a committee thereof to use the stock-based awards available under the Inducement Plan to attract key employees for the growth of the Company. As of September 30, 2021, there were 399,263 shares available for future grant under the Inducement Plan.

Stock options

The following table summarizes the stock option activity for the nine months ended September 30, 2021:

		Weighted-Average
	Shares		Exercise Price
Outstanding at December 31, 2020	6,030,639	$	61.28
Granted	1,006,635		98.10
Exercised	(703,398)		44.16
Canceled	(375,402)		79.21
Outstanding at September 30, 2021	5,958,474	$	68.39
Exercisable at September 30, 2021	3,474,564	$	59.44

As of September 30, 2021, the total unrecognized compensation expense related to unvested stock option awards was $106.6 million, which is expected to be recognized over a weighted-average period of approximately 2.48 years.

Restricted stock units

The following table summarizes the restricted stock units activity for the nine months ended September 30, 2021:

		Weighted-Average
	Shares	Grant Date Fair Value
Unvested shares at December 31, 2020	1,171,686	$	65.37
Granted	842,477		98.67
Vested	(295,461)		65.22
Forfeited	(181,524)		76.87
Unvested shares at September 30, 2021	1,537,178	$	82.29

As of September 30, 2021, the total unrecognized compensation expense related to unvested restricted stock units was $105.5 million, which is expected to be recognize over a weighted-average period of approximately 2.87 years.

2015 Employee Stock Purchase Plan

In 2015, the Company’s board of directors and stockholders approved the 2015 Employee Stock Purchase Plan (the 2015 ESPP), which became effective upon the closing of the Company’s initial public offering in May 2015. The Company initially reserved a total of 243,347 shares of common stock for issuance under the 2015 ESPP. The 2015 ESPP provides that the number of shares reserved and available for issuance under the 2015 ESPP will be cumulatively increased on January 1 of each calendar year by 1% of the number of shares of common stock issued and outstanding on the immediately preceding December 31 or such lesser amount as specified by the compensation committee of the board of directors. For the calendar year beginning January 1, 2021, the number of shares reserved for issuance under the 2015 ESPP was increased by 577,935 shares.

Stock-based compensation expense

The Company recognized stock-based compensation expense totaling $24.0 million and $68.9 million for the three and nine months ended September 30, 2021, respectively, and $19.6 million and $56.0 million for the three and nine months ended September 30, 2020, respectively. Stock-based compensation expense by award type included within the unaudited condensed consolidated statements of operations and comprehensive income (loss) was as follows (in thousands):

	Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2021		2020		2021		2020
Stock options	$	14,842	$	14,419	$	43,949	$	42,764
Restricted stock units		9,165		5,164		25,229		13,162
Employee stock purchase plan		317		306		880		664
Subtotal		24,324		19,889		70,058		56,590
Capitalized stock-based compensation costs		(366)		(254)		(1,109)		(568)
Stock-based compensation expense included in total cost and operating expenses	$	23,958	$	19,635	$	68,949	$	56,022

Stock-based compensation expense by classification within the unaudited condensed consolidated statements of operations and comprehensive income (loss) is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Research and development	$	10,250	$	8,634	$	29,682	$	25,141
Selling, general and administrative		13,708		11,001		39,267		30,881
Total	$	23,958	$	19,635	$	68,949	$	56,022