Equity-based compensation expense is classified in the consolidated statements of operations and comprehensive loss as follows:


	Year Ended December 31,
	2022		2021		2020
	(In thousands)
Research and development	$	56,279	$	26,712	$	10,202
General and administrative		35,121		20,297		9,701
Total	$	91,400	$	47,009	$	19,903

In April 2016, the Company adopted the Amended and Restated 2015 Stock Option and Incentive Plan (the “2015 Plan”). The 2015 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and other stock-based awards. Recipients of incentive stock options and non-qualified stock options are eligible to purchase shares of the Company’s common stock at an exercise price equal to the fair value of such stock on the grant date.

Effective July 1, 2022, the Company adopted a retirement policy for equity awards granted to all employees other than the Company’s CEO (the “Policy”) and in December 2022, the Policy was amended to include the Company's CEO (the “Amended Policy”) upon approval by the Company's board of directors. No other changes were made to the Policy in the amendment. The Amended Policy applies to all equity awards granted after the date of adoption to employees who meet certain retirement eligibility criteria set forth in the Amended Policy (the “Retirees”). Pursuant to the terms of the Amended Policy, upon a Retiree’s eligible retirement: (i) all stock options held by the Retiree will continue to vest following the Retiree’s retirement date according to the original vesting schedule of the option until fully vested and all vested stock options held by such Retiree will remain exercisable until the earlier of the five-year anniversary of the Retiree’s retirement date or the original expiration date of the option, (ii) all unvested time-based RSUs held by the Retiree will vest in full on the Retiree’s retirement date and (iii) all unvested performance-based awards held by the Retiree will remain outstanding following the Retiree’s retirement date and the Retiree will remain eligible to earn a pro-rated portion of such performance-based awards at the end of the performance period based on actual performance during the performance period.

As of December 31, 2022, there were 3,541,302 shares available for future issuance under the 2015 Plan. The number of shares reserved for issuance under the 2015 Plan shall be cumulatively increased by four percent of the number of shares of stock issued and outstanding on the immediately preceding December 31 or such lesser number of shares of stock as determined by the board of directors.

RSUs are measured at fair value based on the quoted price of the Company’s common stock.

The following table summarizes the Company’s RSU activity for the year ended December 31, 2022:


	Number of Shares			Weighted Average Grant Date Fair Value per Share
Unvested restricted stock units as of December 31, 2021		453,026		$	71.03
Granted		1,736,844			70.90
Vested		(147,674	)		70.87
Cancelled		(100,817	)		75.42
Unvested restricted stock units as of December 31, 2022		1,941,379		$	70.70

In March 2022, the Company granted 794,424 RSUs with a service condition to employees as part of their annual grant, which vest over a period of three years. The weighted average grant date fair value of these RSUs was $79.85 and the vesting start date for these RSUs was January 1, 2022.

Also in March 2022, 55,144 RSUs were granted to senior executives as part of their annual grant. These RSUs have the potential to vest after a period of 3 years, with a vesting start date of January 1, 2022, and the number of shares to be delivered will depend on the Company's Total Shareholder Return (“TSR”), a market condition, over that period relative to a defined group of biotechnology companies. The grant date fair value for these RSUs, calculated using a Monte Carlo valuation model, was $126.49. The following assumptions were used to determine the grant date fair value: risk free interest rate: 1.44%; expected dividend yield: 0.0%; expected volatility: 82.53%; expected term (in years): 2.84.

The Company also granted 66,296 performance-based RSUs in March 2022 to certain non-executive employees that would vest upon obtaining certain scientific milestones. There were two separate tranches, each attached to a different set of milestones. The milestone related to the first tranche, made up of 21,878 RSUs, is deemed to be probable of achievement as of December 31, 2022; the Company recorded $1.7 million in expense related to this tranche in 2022 and these RSUs vested in the first quarter of 2023 upon achievement of the milestone. The remaining performance milestones were considered not probable of achievement as of December 31, 2022 and, therefore, no related stock-based compensation was recorded during the period then ending.

The weighted-average grant date fair value of RSUs granted for the years ended December 31, 2022, 2021 and 2020 was $70.90, $73.81 and $21.70, respectively. The total fair value of RSUs vested (measured on the date of vesting) for the years ended December 31, 2022, 2021 and 2020 was $10.4 million, $14.1 million and $2.8 million, respectively.

As of December 31, 2022, there was $99.3 million of unrecognized equity-based compensation expense related to RSUs that are expected to vest. These costs are expected to be recognized over a weighted average remaining vesting period of 2.1 years.

The weighted average grant date fair value of options, estimated as of the grant date using the Black-Scholes option pricing model, was $57.23, $54.09 and $9.07 per option for options granted during the years ended December 31, 2022, 2021 and 2020, respectively. The total intrinsic value (the amount by which the fair market value exceeded the exercise price) of stock options exercised during the years ended December 31, 2022, 2021 and 2020 was $42.8 million, $262.0 million, and $20.3 million, respectively. Weighted average assumptions used to apply this pricing model were as follows:


	Year Ended December 31,
	2022			2021			2020
Risk-free interest rate		1.9	%		1.0	%		0.8	%
Expected life of options	5.9 years			6.0 years			6.0 years
Expected volatility of underlying stock		76.2	%		72.9	%		67.8	%
Expected dividend yield		0.0	%		0.0	%		0.0	%

Risk-free Interest Rate. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant with maturities approximately equal to the option’s expected term.

Expected Dividend Yield. The expected dividend yield assumption is based on the fact that the Company has never paid cash dividends and has no present intention to pay cash dividends.

Expected Volatility. The expected volatility was derived from a blend of the Company’s historical volatility and an average of the historical stock volatilities of several peer companies within the Company’s industry, both over a period equivalent to the expected term of the stock option grants.

Expected Term. The expected term represents the period that stock option awards are expected to be outstanding. For option grants that are considered to be “plain vanilla,” the Company determines the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options. The Company uses the simplified method because it does not have sufficient historical option exercise data to provide a reasonable basis upon which to estimate the expected term.

Stock options granted under the 2015 Plan generally vest 25% on the first anniversary of the original vesting date, with the balance vesting monthly over the remaining three years, unless they contain specific performance-based vesting provisions. The maximum term of stock options granted under the 2015 Plan is ten years.

The Company uses the market closing price of its common stock as reported on the Nasdaq Global Select Market to determine the fair value of the shares of common stock underlying stock options. The following is a summary of stock option activity for the year ended December 31, 2022:


	Number of Options			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
						(In years)		(In thousands)
Outstanding at December 31, 2021		6,305,156		$	43.57
Granted		391,910			86.08
Exercised		(883,954	)		16.42
Forfeited		(341,437	)		61.72
Outstanding at December 31, 2022		5,471,675		$	49.86		7.37	$	53,736
Exercisable at December 31, 2022		3,216,725		$	36.90		6.81	$	40,938

As of December 31, 2022, there was $93.1 million of unrecognized compensation cost related to stock options that have not yet vested. These costs are expected to be recognized over a weighted average remaining vesting period of 2.3 years.

In May 2016, the Company adopted the 2016 Employee Stock Purchase Plan (the “2016 Plan”). The 2016 Plan allows eligible employees to purchase shares of the Company’s common stock on the last day of each predetermined six-month offering period at 85% of the lower of the fair market value per share at the beginning or end of the applicable offering period. The 2016 Plan provides for six-month offering periods beginning in January and July of each year.

As of December 31, 2022, there were 1,219,584 shares available for future issuance under the 2016 Plan. The number of shares reserved for issuance under the 2016 Plan shall be cumulatively increased by the lesser of a) one percent of the number of shares of common stock issued and outstanding on the immediately preceding December 31, b) 500,000 shares of common stock, or c) such lesser number of shares of common stock as determined by the board of directors.

During the years ended December 31, 2022, 2021, and 2020, the Company issued 77,618, 30,897, and 101,911 shares of common stock under the 2016 Plan, respectively. The weighted-average purchase prices of shares issued under the 2016 Plan were $34.15, $65.51 and $15.28 per share for the years ended December 31, 2022, 2021, and 2020, respectively.

The fair value of the awards issued under the 2016 Plan to employees was estimated at the beginning of the offering period using a Black-Scholes option-pricing model with the following assumptions:


	Year Ended December 31,
	2022			2021			2020
Risk-free interest rate	0.22%-2.52%			0.05%-0.09%			0.17%-1.6%
Expected term (in years)	0.5 years			0.5 years			0.5 years
Expected volatility of underlying stock	63.6%-95.3%			77.5%-109.2%			53.4%-98.3%
Expected dividend yield		0.0	%		0.0	%		0.0	%