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Stock-Based Compensation
6 Months Ended
Jun. 30, 2022
Stock-Based Compensation  
Stock-Based Compensation

6. Stock-Based Compensation

Employee Equity Plans

The NextCure, Inc. 2015 Omnibus Incentive Plan (the “2015 Plan”) was adopted in December 2015 and provides for the grant of awards of stock options, restricted stock awards, unrestricted stock awards and restricted stock units to employees, consultants, and directors of the Company.

The NextCure, Inc. 2019 Omnibus Incentive Plan (the “2019 Plan”) became effective on May 8, 2019, the date on which the Company’s Registration Statement on Form S-1 filed in connection with the IPO was declared effective (the “Effective Date”). The Company’s board of directors (the “Board”) determined not to make additional awards under the 2015 Plan following the effectiveness of the 2019 Plan. The 2019 Plan provides for the grant of awards of stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units, unrestricted stock, dividend equivalent rights, other equity-based awards and cash bonus awards to the Company’s officers, employees, non-employee directors and other key persons (including consultants).

The number of shares of common stock reserved for issuance under the 2019 Plan is 2,900,000 plus the number of shares of stock related to awards outstanding under the 2015 Plan that subsequently terminate by expiration or forfeiture, cancellation or otherwise without the issuance of such shares. The number of shares reserved for issuance under the 2019 Plan automatically increase each January 1st during the term of the 2019 Plan by 4% of the number of

shares of the Company’s common stock outstanding on December 31st of the preceding calendar year or such lesser number of shares determined by the Board.

As of June 30, 2022, 2,534,766 shares were reserved for future grant under the 2019 Plan.

Stock options granted under the 2015 Plan and 2019 Plan (together, the “Plans”) to employees generally vest over four years and expire after ten years.

A summary of stock option activity for awards under the Plans is presented below:

Options Outstanding and Exercisable

Weighted

Weighted

Average

Aggregate

Average

Remaining

Intrinsic

Number of

Exercise

Contractual

Value(1)

    

Shares

    

Price

    

Life (Years)

    

(in thousands)

Outstanding as of December 31, 2021

4,545,794

$

14.15

8.1

$

2,860

Granted

 

1,704,850

$

5.39

 

 

Exercised

(50,420)

$

1.32

Forfeitures

(818,944)

$

13.76

Outstanding as of June 30, 2022

 

5,381,280

$

11.56

 

8.1

$

1,935

Exercisable as of June 30, 2022

 

2,444,111

$

12.84

 

7.0

$

1,870

(1)The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for the options that were in the money at June 30, 2022 and December 31, 2021.

The weighted average grant date fair value of stock options granted to employees for the six months ended June 30, 2022 was $3.72. The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2022 was $0.2 million. As of June 30, 2022, there was $19.7 million of total unrecognized compensation expense related to unvested options under the Plans that will be recognized over a weighted-average period of approximately 2.9 years.

The aggregate grant date fair value of stock options vested during the six months ended June 30, 2022 and 2021 was approximately $6.9 million and $10.3 million, respectively.

Stock-based compensation expense was classified on the statements of operations as follows for the three and six months ended June 30, 2022 and 2021:

Three Months Ended

Six Months Ended

June 30, 

June 30, 

(in thousands)

    

2022

    

2021

    

2022

    

2021

Research and development

$

728

$

1,056

$

1,496

$

2,014

General and administrative

 

1,514

 

1,731

 

3,374

 

3,281

Total stock-based compensation expense

$

2,242

$

2,787

$

4,870

$

5,295

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model using the assumptions in the following table for options issued during the period indicated:

Six Months Ended

June 30, 

    

2022

    

2021

Expected term

 

5.5 - 6.1

years 

5.5 - 6.1

years 

Expected volatility

 

79.7

%

79.7

%

Risk free interest rate

 

1.8 - 3.1

%

0.8 - 1.4

%

Expected dividend yield

 

%

%

Employee Stock Purchase Plan

The NextCure, Inc. 2019 Employee Stock Purchase Plan (the “ESPP”) was approved in May 2019 and provides for certain employees of the Company to purchase shares of Company stock at a discounted price. As of June 30, 2022, 23,891 shares of common stock had been issued pursuant to the ESPP and 766,789 shares were reserved for future issuance thereunder.