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Stock-based Compensation
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Stock-based Compensation Stock-based Compensation
Equity Incentive Plans
In 2019, our board of directors (the "Board") and stockholders approved the 2019 Incentive Award Plan (the "2019 Plan"). The 2019 Plan superseded and replaced in its entirety our 2010 Equity Incentive Plan (the “2010 Plan") which was effective in March 2010, and no further awards will be granted under the 2010 Plan; however, the terms and conditions of the 2010 Plan will continue to govern any outstanding awards thereunder.
The 2019 Plan provides for the grant of stock options, including incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock awards ("RSAs"), restricted stock units ("RSUs"), performance-contingent restricted stock units ("PSUs"), performance-based options ("PBOs"), other stock or cash-based awards and dividend equivalents to eligible employees and consultants of the Company or any parent or subsidiary, as well as members of the Board.
The number of shares of our common stock available for issuance under the 2019 Plan is equal to the sum of (i) 7,897,144 shares and (ii) any shares subject to awards granted under the 2010 Plan that were outstanding as of April 22, 2019 and thereafter terminate, expire, lapse or are forfeited; provided that no more than 14,000,000 shares may be issued upon the exercise of incentive stock options ("ISOs"). In June 2019, 8.1 million shares authorized for issuance under the 2019 Plan were registered under the Securities Act of 1933, as amended (the "Securities Act").
The 2010 Plan provided for the grant of incentive stock options, non-statutory stock options, RSUs, RSAs, PSUs, PBOs,
stock appreciation rights, and stock purchase rights to our employees, non-employee directors and consultants.
As of December 31, 2022, total shares remaining available for issuance under the 2019 Plan were 2.8 million shares.
Stock Options
The option exercise price for incentive stock options must be at least 100% of the fair value of our common stock on the date of grant and the option exercise price for non-statutory stock options is at least 85% of the fair value of our common stock on the date of grant, as determined by the Board. If, at the time of a grant, the optionee directly or by attribution owns stock possessing more than 10% of the total combined voting power of all of our outstanding capital stock, the exercise price for these options must be at least 110% of the fair value of the underlying common stock. Stock options granted to employees generally have a maximum term of ten years and vest over four years from the date of grant, of which 25% vest at the end of one year, and 75% vest monthly over the remaining three years. We may grant options with different vesting terms from time to time. Unless an employee's termination of service is due to disability or death, upon termination of service, any unexercised vested options will be forfeited at the end of three months or the expiration of the option, whichever is earlier.
Restricted Stock Units ("RSUs")
We also grant employees RSUs, which generally vest over either a three year period with 33% of the shares subject to the RSUs vesting on each yearly anniversary of the vesting commencement date or over a four-year period with 25% of the shares subject to the RSU vesting on each yearly anniversary of the vesting commencement date, in each case contingent upon such employee’s continued service on such vesting date. RSUs are generally subject to forfeiture if employment terminates prior to the release of vesting restrictions. We may grant RSUs with different vesting terms from time to time.
Performance-contingent Restricted Stock Units ("PSUs") and Performance Based Options ("PBOs")
The compensation committee of the Board, solely in respect of non-executive employees, delegated to our Chief Executive Officer the authority to approve grants of PSUs. The compensation committee of the Board also approves grants of PBOs and PSUs to our executives. The PSUs and PBOs vest based upon both the successful achievement of certain corporate operating milestones in specified timelines and continued employment through the applicable vesting date. When the performance goals are deemed to be probable of achievement for these types of awards, recognition of stock-based compensation expense commences. Once the number of shares eligible to vest is determined, those shares vest in two equal installments with 50% vesting upon achievement and the remaining 50% vesting on the first anniversary of achievement, in each case, subject to the recipient’s continued service through the applicable vesting date. If the performance goals are achieved at the threshold level, the number of shares eligible to vest in respect of the PSUs and PBOs would be equal to half the number of PSUs granted and one-quarter the number of shares underlying the PBOs granted. If the performance goals are achieved at the target level, the number of shares eligible to vest in respect of the PSUs and PBOs would be equal to the number of PSUs granted and half of the shares underlying the PBOs granted. If the performance goals are achieved at the superior level, the number of shares eligible to vest in respect of the PSUs would be equal to two times the number of PSUs granted and equal to the number of PBOs granted. The number of shares issuable upon achievement of the performance goals at the levels between the threshold and target levels for the PSUs and PBOs or between the target level and superior levels for the PSUs would be determined using linear interpolation. Achievement below the threshold level would result in no shares being eligible to vest in respect of the PSUs and PBOs.
In 2022, we awarded PSUs ("2022 PSUs") and PBOs ("2022 PBOs"), each of which commence vesting based upon the achievement of various weighted performance goals, including finance and corporate strategy, performance enzymes and biotherapeutics deliverables, research plans, and organizational development. As of December 31, 2022, we estimated that the 2022 PSUs and 2022 PBOs performance goals would be achieved at 85.0% and 42.5% of the target level, respectively, and recognized stock-based compensation expenses accordingly.
In 2021, we awarded PSUs ("2021 PSUs") and PBOs ("2021 PBOs"), each of which commence vesting based upon the achievement of various weighted performance goals, including total revenues, product revenue, performance enzymes pipeline advancements, biotherapeutics pipeline advancements, organization and infrastructure upgrades, and significant events that can be publicly announced. In the first quarter of 2022, we determined that the 2021 PSUs and 2021 PBOs performance goals had been achieved at 146% and 73% of the target level, respectively, and recognized stock-based compensation expenses accordingly. Accordingly, 50% of the shares underlying the 2021 PSUs and PBOs vested in the first quarter of 2022 and 50% of the shares underlying the 2021 PSUs and PBOs will vest in the first quarter of 2023, in each case, subject to the recipient’s continued service on each vesting date.
In 2020, we awarded PSUs ("2020 PSUs") and PBOs ("2020 PBOs"), each of which commenced vesting based upon the achievement of various weighted performance goals, including total revenues, performance enzyme segment gross margin, major new biotherapeutics publicity events, strategic performance enzyme and biotherapeutics deliverables, and strategic plan development. In the first quarter of 2021, we determined that the 2020 PSUs and 2020 PBOs performance goals had been achieved at 88% and 44% of the target level, respectively, and recognized stock-based compensation expenses accordingly. Accordingly, 50% of the shares underlying the 2020 PSUs and PBOs vested in the first quarter of 2021 and 50% of the shares underlying the 2020 PSUs and PBOs vested in the first quarter of 2022, in each case, subject to the recipient’s continued service on each vesting date.
Stock-Based Compensation Expense
Stock-based compensation expense is included in the consolidated statements of operations as follows (in thousands): 
 Year Ended December 31,
 202220212020
Costs of product revenue$452 $224 $104 
Research and development$3,907 $2,663 $1,843 
Selling, general and administrative10,172 8,706 5,781 
Total$14,531 $11,593 $7,728 
The following table presents total stock-based compensation expense by security type included in the consolidated statements of operations (in thousands):
 Year Ended December 31,
 202220212020
Stock options$4,167 $2,764 $2,381 
RSUs and RSAs4,807 2,7682,231
PSUs3,268 2,333 1,160 
PBOs2,289 3,7281,956
Total$14,531 $11,593 $7,728 
In connection with the retirement of John Nicols, our former President and Chief Executive Officer, in August 2022, and the Transition and Separation Agreement between Mr. Nicols and the Company, certain supplementary modifications were made to Mr. Nicols' vested and unvested stock option and PBOs awards including voluntary forfeiture of certain unvested stock option and PBOs awards and the extension of the post-termination exercise period of certain vested stock option and PBOs awards. During the year ended December 31, 2022, we recorded a one-time, non-cash incremental compensation expense of $1.0 million, net of the required reversal of previously recognized stock-based compensation expenses attributed to unvested shares, in selling, general and administrative expenses related to these stock option award modifications.
Grant Award Activities:
Stock Option Awards
We estimated the fair value of stock options using the Black-Scholes-Merton option-pricing model based on the date of grant. The following summarizes the weighted-average assumptions used to estimate the fair value of employee stock options granted:
 Year Ended December 31,
 202220212020
Expected life (years)5.75.65.3
Volatility62.1 %52.5 %50.4 %
Risk-free interest rate3.1 %0.8 %1.0 %
Expected dividend yield0.0 %0.0 %0.0 %
No stock options were granted to non-employees for services during year ended December 31, 2022. The following summarizes the weighted-average assumptions used to estimate the fair value of 9,000 and 76,000 shares of stock options granted to non-employees for services valued at $0.1 million and $0.4 million during the years ended December 31, 2021 and 2020 respectively:
 Year Ended December 31,
 20212020
Expected life (years)5.65.4
Volatility54.1 %51.6 %
Risk-free interest rate0.9 %0.4 %
Expected dividend yield0.0 %0.0 %
The weighted average grant date fair value per share of non-employee stock options granted respectively in 2021 and 2020 was $11.29 and $5.04.
The following tables summarizes stock option activities:
Number
of
Shares		Weighted Average
Exercise Price
Per Share
(In Thousands)
Outstanding at December 31, 20193,147 $6.31 
Granted496 $13.30 
Exercised(210)$6.30 
Forfeited/Expired(48)$16.71 
Outstanding at December 31, 20203,385 $7.19 
Granted286 $26.85 
Exercised(664)$6.96 
Forfeited/Expired(72)$17.99 
Outstanding at December 31, 20212,935 $8.90 
Granted2,000 $8.90 
Exercised(410)$2.33 
Forfeited/Expired(275)$19.01 
Outstanding at December 31, 20224,250 $8.88 
Number
of
Shares		Weighted Average
Exercise Price
Per Share		Weighted Average Remaining Contractual TermAggregate Intrinsic
Value
(In Thousands)(In Years)(In Thousands)
Outstanding at December 31, 20224,250 $8.88 6.2$1,556 
Exercisable at December 31, 20222,162 $8.26 3.1$1,556 
Vested and expected to vest at December 31, 20223,898 $8.91 5.9$1,556 
The weighted average grant date fair value per share of employee stock options granted in 2022, 2021 and 2020 were $4.99, $12.80 and $6.03, respectively. The total intrinsic value of options exercised in 2022, 2021 and 2020 were $3.1 million, $14.9 million and $1.8 million, respectively.
As of December 31, 2022, there was $8.1 million of unrecognized stock-based compensation, net of expected forfeitures, related to unvested stock options, which we expect to recognize over a weighted average period of 3.4 years.
Restricted Stock Awards ("RSAs")
The following table summarizes RSA activities:
Number
of
Shares		Weighted Average
Grant Date Fair Value
Per Share
(In Thousands)
Non-vested balance at December 31, 201935 $17.18 
Granted96 $11.44 
Vested(35)$17.18 
Non-vested balance at December 31, 202096 $11.44 
Granted46 $21.91 
Vested(62)$11.31 
Non-vested balance at December 31, 202180 $17.53 
Granted159 $7.53 
Vested(58)$18.42 
Non-vested balance at December 31, 2022181 $8.45 
The total fair value, as of the vesting date, of RSAs vested in fiscal years 2022, 2021 and 2020 were $0.5 million, $1.3 million and $0.4 million respectively.
As of December 31, 2022, there was $0.8 million of unrecognized stock-based compensation cost related to non-vested RSAs, which we expect to recognize over a weighted average period of 1.4 years.
Restricted Stock Units ("RSUs")
The following table summarizes RSU activities:
Number
of
Shares		Weighted Average
Grant Date Fair Value
Per Share
(In Thousands)
Non-vested balance at December 31, 2019201 $10.76 
Granted156 $14.22 
Vested(168)$10.05 
Forfeited/Expired(13)$15.16 
Non-vested balance at December 31, 2020176 $14.17 
Granted163 $26.59 
Vested(70)$13.57 
Forfeited/Expired(37)$21.89 
Non-vested balance at December 31, 2021232 $21.83 
Granted518 $17.46 
Vested(106)$21.21 
Forfeited/Expired(126)$19.55 
Non-vested balance at December 31, 2022518 $18.15 
The total fair value, as of the vesting date, of RSUs vested in fiscal years 2022, 2021 and 2020 were $1.8 million, $1.8 million and $2.1 million respectively.
As of December 31, 2022, there was $5.2 million of unrecognized stock-based compensation cost related to non-vested RSUs, which we expect to recognize over a weighted average period of 1.9 years.
Performance-Contingent Restricted Stock Units ("PSUs")
The following table summarizes PSU activities:
Number
of
Shares		Weighted Average
Grant Date Fair Value
Per Share
(In Thousands)
Non-vested balance at December 31, 2019120 $13.88 
Granted124 $13.59 
Vested(107)$11.28 
Forfeited/Expired(6)$21.80 
Non-vested balance at December 31, 2020131 $15.34 
Granted82 $26.16 
Vested(66)$16.14 
Forfeited/Expired(19)$19.38 
Non-vested balance at December 31, 2021128 $21.24 
Granted686 $9.55 
Vested(107)$20.52 
Forfeited/Expired(40)$19.93 
Non-vested balance at December 31, 2022667 $9.41 
The total fair value, as of the vesting date, of PSUs vested in the years ended December 31, 2022, 2021, and 2020 were $2.1 million, $1.3 million, and $1.3 million, respectively.
As of December 31, 2022, there was $2.2 million of unrecognized stock-based compensation cost related to non-vested PSUs, which we expect to recognize over a weighted average period of 0.7 years.
Performance Based Options ("PBOs")
We estimated the fair value of PBOs using the Black-Scholes-Merton option-pricing model based on the date of grant. The following summarize the weighted-average assumptions used to estimate the fair value of PBOs granted:
 Year Ended December 31,
202220212020
Expected life (years)5.65.55.3
Volatility54.9 %51.9 %49.9 %
Risk-free interest rate1.8 %0.7 %1.3 %
Expected dividend yield0.0 %0.0 %0.0 %
The following tables summarizes PBOs activities:
Number
of
Shares		Weighted Average
Grant Date Fair Value
Per Share
(In Thousands)
Outstanding at December 31, 20191,260 $4.75 
Granted689 $6.37 
Forfeited/Expired(389)$6.42 
Outstanding at December 31, 20201,560 $5.05 
Granted433 $12.23 
Exercised(35)$9.02 
Forfeited/Expired(118)$12.23 
Outstanding at December 31, 20211,840 $4.11 
Granted733 $9.89 
Forfeited/Expired(747)$8.29 
Outstanding at December 31, 20221,826 $4.70 

Number
of
Shares		Weighted Average
Exercise Price
Per Share		Weighted Average
Remaining
Contractual Term		Aggregate Intrinsic
Value
(In Thousands)(In Years)(In Thousands)
Exercisable at December 31, 20221,674 $11.09 5.4$40 
Vested and expected to vest at December 31, 20221,808 $11.85 5.7$40 
The total fair value of exercised PBOs for 2022, 2021 and 2020, was nil, $0.3 million and nil, respectively.
As of December 31, 2022, there was $0.4 million of unrecognized stock-based compensation cost related to non-vested PBOs, which we expect to recognize over a weighted average period of 1.0 years.