Equity Incentive Plans

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

2019 Equity Incentive Plan

In January 2019, the Company’s board of directors and stockholders approved and adopted the 2019 Incentive Award Plan (the “2019 Plan”). The 2019 Plan became effective on February 6, 2019, the day prior to the effectiveness of the registration statement filed in connection with the IPO. Under the 2019 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock or cash-based awards to individuals who are then employees, officers, directors or consultants of the Company, and employees and consultants of the Company’s subsidiaries. A total of 5,750,000 shares of common stock were approved to be initially reserved for issuance under the 2019 Plan. The number of shares that remained available for issuance under the 2017 Plan (as defined below) as of the effective date of the 2019 Plan were, and shares subject to outstanding awards under the 2017 Plan as of the effective date of the 2019 Plan that are subsequently canceled, forfeited or repurchased by the Company will be, added to the shares reserved under the 2019 Plan. In addition, the number of shares of common stock available for issuance under the 2019 Plan will be automatically increased on the first day of each calendar year during the ten-year term of the 2019 Plan, beginning with January 1, 2020 and ending with January 1, 2029, by an amount equal to 5% of the outstanding number of shares of the Company’s common stock on December 31 of the preceding calendar year or such lesser amount as determined by the Company’s board of directors. As of March 31, 2022, an aggregate of 4,747,720 shares of common stock were available for issuance under the 2019 Plan. As of March 31, 2022 and December 31, 2021, 12,349,459 and 8,402,621 shares of common stock, respectively, were subject to outstanding awards under the 2019 Plan.

2019 Employee Stock Purchase Plan

In January 2019, the Company’s board of directors and stockholders approved and adopted the 2019 Employee Stock Purchase Plan (the “ESPP”). The ESPP became effective as of February 6, 2019, the day prior to the effectiveness of the registration statement filed in connection with the IPO. The ESPP permits participants to purchase common stock through payroll deductions of up to 20% of their eligible compensation. A total of 700,000 shares of common stock were approved to be initially reserved for issuance under the ESPP. In addition, the number of shares of common stock available for issuance under the ESPP will be automatically increased on the first day of each calendar year during the first ten-years of the term of the ESPP, beginning with January 1, 2020 and ending with January 1, 2029, by an amount equal to 1% of the outstanding number of shares of the Company’s common stock on December 31 of the preceding calendar year or such lesser amount as determined by the Company’s board of directors. During the three months ended March 31, 2022, 77,496 shares were issued pursuant to the ESPP. As of March 31, 2022, an aggregate of 2,531,217 shares of common stock were available for issuance under the ESPP.

2017 Equity Incentive Plan

The Company’s 2017 Equity Incentive Plan (the “2017 Plan”) permitted the granting of incentive stock options, non-statutory stock options, restricted stock, restricted stock units and other stock-based awards. Subsequent to the adoption of the 2019 Plan, no additional equity awards can be made under the 2017 Plan. As of March 31, 2022 and December 31, 2021, 2,818,333 and 2,875,330 shares of common stock, respectively, were subject to outstanding options under the 2017 Plan. As of March 31, 2022, no shares of restricted stock awards granted under the 2017 plan were unvested.

Stock Options

The fair value of each employee and non-employee stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company estimates its expected volatility based on the historical volatility of a publicly traded set of peer companies. Due to the lack of historical exercise history, the expected term of the Company’s stock options for employees has been determined utilizing the “simplified” method for awards. The expected term of stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term

of the award. Expected dividend yield is zero based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

The following table summarizes stock option activity during the three months ended March 31, 2022:


	Shares Subject to Options Outstanding			Weighted- Average
	Shares	Weighted- Average Exercise Price		Remaining Contractual Life (Years)	Aggregate Intrinsic Value
					(in thousands)
Outstanding as of December 31, 2021	9,434,660	$	12.24	7.4	$	15,822
Options granted	4,041,165	$	11.86
Options exercised	(39,525)	$	3.18
Options forfeited/cancelled	(114,608)	$	15.49
Outstanding as of March 31, 2022	13,321,692	$	12.13	7.9	$	7,047
Options vested and expected to vest as of March 31, 2022	13,321,692	$	12.13	7.9	$	7,047
Options exercisable as of March 31, 2022	5,549,308	$	12.40	6.5	$	6,670

The aggregate intrinsic value in the above table is calculated as the difference between fair value of the Company’s common stock price on March 31, 2022 and the exercise price of the stock options. The aggregate intrinsic value of stock options exercised during three months ended March 31, 2022 was $0.2 million and none as of March 31, 2021.

The weighted-average grant date fair value per share for the stock option grants during the three months ended March 31, 2022 and 2021 was $8.53 and $6.97, respectively.

The aggregate fair value of stock options that vested during the three months ended March 31, 2022 and 2021 was $10.4 million and $7.3 million, respectively.

Restricted Stock

The summary of the Company’s restricted stock activity during the three months ended March 31, 2022 is as follows:


	Number of Restricted Stock Units Outstanding	Weighted- Average Grant Date Fair Value
Nonvested at December 31, 2021	2,561,219	$	8.67
Granted	572,901	11.94
Vested	(684,252)	9.23
Forfeited	(34,664)	10.43
Nonvested at March 31, 2022	2,415,204	$	9.27

At March 31, 2022, the total unrecognized compensation related to unvested restricted stock awards granted was $18.0 million, which the Company expects to recognize over a weighted-average period of approximately 1.3 years.

Stock-Based Compensation Expense

Stock-based compensation expense has been reported in the Company’s condensed consolidated statements of operations as follows (in thousands):


	Three months ended March 31,
	2022		2021
Research and development	$	6,618	$	5,442
General and administrative	4,365		3,266
Total stock-based compensation expense	$	10,983	$	8,708

As of March 31, 2022, the total unrecognized compensation related to unvested stock option awards granted was $61.1 million, which the Company expects to recognize over a weighted-average period of approximately 2.5 years.

As of March 31, 2022, the total unrecognized compensation expense related to the ESPP was $2.1 million, which the Company expects to recognize over a weighted-average period of approximately 1.3 years.