Stockholders' Equity

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Stockholders' Equity

9.Stockholders’ Equity

Stock Option and Incentive Plans

Under the Company’s current 2018 Stock Option and Incentive Plan (the “2018 Plan”), the number of shares of the Company’s common stock that were reserved and available for issuance is 2,778,000, plus the number of shares of common stock that were available for issuance under the Company’s previous equity plans. The shares of common stock underlying any awards under the 2018 Plan and previous equity plans (together, the “Plans”) that are forfeited, canceled or otherwise terminated (other than by exercise) shall be added back to the shares of stock available for issuance under the 2018 Plan. At March 31, 2024, 1,511,335 shares were available for future grants under the 2018 Plan.

Stock Issued for Earnout Payment

In March 2024, the Company issued 2,770 shares of its common stock to former securityholders of FlexBiosys to satisfy the contingent consideration obligation established under the Equity Purchase Agreement (the "FlexBiosys Agreement") which the Company entered into as part of the acquisition of FlexBiosys in April 2023. See Note 3, “Acquisitions”, in this report for additional information on the acquisition of FlexBiosys and the contingent consideration. The shares represent 20% of the earnout consideration earned in the First Earnout Year (as defined in the FlexBiosys Agreement).

Stock-Based Compensation

The following table presents stock-based compensation expense in the Company’s condensed consolidated statements of comprehensive (loss) income:

	Three Months Ended March 31,
	2024		2023
	(Amounts in thousands)
Cost of goods sold	$	604	$	591
Research and development		944		787
Selling, general and administrative		7,228		5,876
Total stock-based compensation	$	8,776	$	7,254

Stock Options

Information regarding option activity for the three months ended March 31, 2024 under the Plans is summarized below:

	Shares			Weighted average exercise price		Weighted- Average Remaining Contractual Term (in Years)		Aggregate Intrinsic Value (in Thousands)
Options outstanding at December 31, 2023		649,130		$	85.97
Granted		39,528		$	192.80
Exercised		(13,708	)	$	68.95
Forfeited/expired/cancelled		(10,970	)	$	77.70
Options outstanding at March 31, 2024		663,980		$	92.81
Options exercisable at March 31, 2024		400,302		$	71.62
Vested and expected to vest at March 31, 2024(1)		650,402		$	92.21		5.67	$	61,471

(1)Represents the number of vested options as of March 31, 2024 plus the number of unvested options expected to vest as of March 31, 2024 based on the unvested outstanding options at March 31, 2024 adjusted for estimated forfeiture rates of 8% for awards granted to non-executive level employees and 3% for awards granted to executive level employees.

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing price of the common stock on March 28, 2024, the last business day of the first quarter of 2024, of $183.92 per share and the exercise price of each in-the-money option) that would have been received by the option holders had all option holders exercised their options on March 31, 2024. The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2024 and 2023 was $1.7 million and $0.2 million, respectively.

The weighted average grant date fair value of options granted during the three months ended March 31, 2024 and 2023 was $97.61 and $89.25, respectively.

Stock Units

The fair value of stock units is calculated using the closing price of the Company’s common stock on the date of grant. The Company recognizes expense on awards with service-based vesting over the employee’s requisite service period on a straight-line basis. The Company recognizes expense on performance-based awards over the vesting period based on the probability that the performance metrics will be achieved. Information regarding stock unit activity, which includes activity for restricted stock units and performance stock units, for the three months ended March 31, 2024 under the Plans is summarized below:

	Shares			Weighted Average Grant Date Fair Value
Unvested at December 31, 2023		474,320		$	155.59
Awarded		152,483		$	192.59
Vested		(98,246	)	$	148.67
Forfeited/cancelled		(20,968	)	$	186.59
Unvested at March 31, 2024		507,589		$	166.78
Vested and expected to vest at March 31, 2024(1)		444,179		$	165.03

(1)Represents the number of vested stock units as of March 31, 2024 plus the number of unvested stock units expected to vest as of March 31, 2024 based on the unvested outstanding stock units at March 31, 2024 adjusted for estimated forfeiture rates of 8% for awards granted to non-executive level employees and 3% for awards granted to executive level employees.

The aggregate intrinsic value of stock units vested during the three months ended March 31, 2024 and 2023 was $19.0 million and $24.3 million, respectively.

The weighted average grant date fair value of stock units granted during the three months ended March 31, 2024 and 2023 was $192.59 and $180.05, respectively.

As of March 31, 2024, there was $85.7 million of total unrecognized compensation cost related to unvested share-based awards. This cost is expected to be recognized over a weighted average remaining requisite service period of 2.96 years. The Company expects 2,294,896 unvested options and stock units to vest over the next five years.