Equity Incentive Plans

9 Months Ended

Sep. 30, 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 September 30, 2022, an aggregate of 5,189,165 shares of common stock were available for issuance under the 2019 Plan. As of September 30, 2022 and December 31, 2021, 11,810,964 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 nine months ended September 30, 2022, 157,858 shares were issued pursuant to the ESPP. As of September 30, 2022, an aggregate of 2,450,855 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 September 30, 2022 and December 31, 2021, 2,614,198 and 2,875,330 shares of common stock, respectively, were subject to outstanding options under the 2017 Plan. As of September 30, 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 uses its own volatility to the extent it has sufficient trading history, and for awards in which sufficient trading history is not available, a peer group is used. 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 nine months ended September 30, 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	4,447,720	$	11.50
Options exercised	(269,103)	$	6.40
Options forfeited/cancelled	(823,901)	$	15.77
Outstanding as of September 30, 2022	12,789,376	$	11.89	7.6	$	19,765
Options vested and expected to vest as of September 30, 2022	12,789,376	$	11.89	7.6	$	19,765
Options exercisable as of September 30, 2022	6,115,757	$	12.17	6.4	$	14,169

The aggregate intrinsic value in the above table is calculated as the difference between fair value of the Company’s common stock price on September 30, 2022 and the exercise price of the stock options. The aggregate intrinsic value of stock options exercised during nine months ended September 30, 2022 and 2021 was $1.5 million and $0.7 million, respectively.

The weighted-average grant date fair value per share for the stock option grants during the nine months ended September 30, 2022 and 2021 was $8.27 and $6.85, respectively.

The aggregate fair value of stock options that vested during the nine months ended September 30, 2022 and 2021 was $26.1 million and $17.3 million, respectively.

Restricted Stock

The summary of the Company’s restricted stock activity during the nine months ended September 30, 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	(1,087,210)	7.72
Forfeited	(190,222)	10.67
Nonvested at September 30, 2022	1,856,688	$	10.04

At September 30, 2022, the total unrecognized compensation related to unvested restricted stock awards granted was $10.1 million, which the Company expects to recognize over a weighted-average period of approximately 0.9 years.

Stock-Based Compensation Expense

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


	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Research and development	$	5,595	$	4,349	$	17,800	$	14,435
General and administrative	4,527		3,238		13,304		9,914
Total stock-based compensation expense	$	10,122	$	7,587	$	31,104	$	24,349

As of September 30, 2022, the total unrecognized compensation related to unvested stock option awards granted was $46.1 million, which the Company expects to recognize over a weighted-average period of approximately 2.1 years.

As of September 30, 2022, the total unrecognized compensation expense related to the ESPP was $1.6 million, which the Company expects to recognize over a weighted-average period of approximately 0.9 years.