Stock-Based Compensation

12 Months Ended

Dec. 31, 2022

Stock-Based Compensation

Stock-Based Compensation

10. Stock-Based Compensation

The Company’s results of operations include expenses relating to stock-based awards as follows (in thousands):

	Year Ended December 31,
	2022		2021		2020
Research and development	$	1,039	$	2,161	$	2,791
General and administrative		1,653		2,071		2,956
Total	$	2,692	$	4,232	$	5,747

Valuation Assumptions

The Company estimated the fair value of employee stock options using the Black-Scholes valuation model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value of employee stock options were estimated using the following assumptions for the years ended December 31, 2022, 2021 and 2020:

	Year Ended December 31,
	2022		2021		2020
Risk-free interest rate	3.0	%	0.9	%	0.5	%
Expected volatility	83.8	%	86.7	%	82.7	%
Expected term (in years)	5.5		6.0		6.0
Expected dividend yield	0	%	0	%	0	%

Risk-free Interest Rate: The Company based the risk-free interest rate over the expected term of the options based on the constant maturity rate of U.S. Treasury securities with similar maturities as of the date of the grant.

Volatility: The Company uses an average historical stock price volatility of a peer group of publicly traded companies to be representative of its expected future stock price volatility. For purposes of identifying these peer companies, the Company considers the industry, stage of development, size and financial leverage of potential comparable companies. For each grant, the Company measures historical volatility over a period equivalent to the

expected term. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

Expected Term: The Company uses the simplified method prescribed in the ASC 718, Compensation—Stock Compensation, to calculate the expected term of options granted to employees and directors.

Expected Dividends: The Company has not paid and does not anticipate paying any dividends in the near future.

At December 31, 2022, 2021 and 2020, the unrecognized compensation expense associated with respect to options granted to employees was $3.9 million, $5.9 million and $10.4 million, respectively, and is expected to be recognized on a straight-line basis over 2.44, 2.69, and 2.78 years, respectively.