Stock-based compensation

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

In January 2021 and 2020, the number of shares of common stock available for issuance under the 2013 Stock Option and Incentive Plan (“2013 Plan”) was increased by approximately 2.7 million and 2.2 million shares, respectively, as a result of the automatic increase provision of the 2013 Plan. As of March 31, 2021, the total number of shares of common stock available for issuance under the 2013 Plan was approximately 3.5 million.

Stock-based compensation expense

The Company recognized stock-based compensation expense totaling $42.5 million and $36.3 million for the three months ended March 31, 2021 and 2020, respectively. Stock-based compensation expense by award type included within the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands):


	For the three months ended March 31,
	2021		2020
Stock options	$	20,659	$	24,440
Restricted stock units	14,733		11,853
Employee stock purchase plan and other	7,082		—
	$	42,474	$	36,293

Stock-based compensation expense by classification included within the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands):


	For the three months ended March 31,
	2021		2020
Research and development	$	19,868	$	16,269
Selling, general and administrative	22,606		20,024
	$	42,474	$	36,293

Stock-based compensation of $0.3 million and less than $0.1 million was capitalized into inventory for the three months ended March 31, 2021 and 2020, respectively. During the three months ended March 31, 2021, capitalized stock-based compensation of less than $0.1 million was recognized within cost of royalty and other revenue when the related product was sold. As of March 31, 2021, the Company had approximately $252.4 million of unrecognized stock-based compensation expense, which is expected to be recognized over a weighted-average period of approximately 2.2 years.

Unrestricted stock awards

During the first quarter of 2021, the Company granted 0.4 million unrestricted stock awards to employees as part of its 2020 annual incentive program. In addition, the Company implemented a retention program designed to incentivize and retain employees through the separation of its severe genetic disease and oncology programs, which is intended to occur by the end of 2021. Under the retention program, employees are entitled to a one-time bonus payment, consisting of both a cash payment and unrestricted stock awards, with the condition that the employee remains employed at the end of 2021. For the three months ended March 31, 2021, the Company recognized $13.3 million in expense related to this program, which includes $6.7 million in stock compensation expense related to the anticipated grants of stock.

Stock option activity

The following table summarizes the stock option activity under the Company’s equity award plans:


	Shares (in thousands)	Weighted- average exercise price per share
Outstanding at December 31, 2020	6,262	$	105.02
Granted	671	$	29.17
Exercised	(207)	$	5.88
Canceled, forfeited, or expired	(268)	$	110.62
Outstanding at March 31, 2021	6,458	$	100.08
Exercisable at March 31, 2021	3,829	$	111.17
Vested and expected to vest at March 31, 2021	6,458	$	100.08

During the three months ended March 31, 2021, 0.2 million stock options were exercised, resulting in total proceeds to the Company of $1.2 million.

Restricted stock unit activity

The following table summarizes the restricted stock unit activity under the Company’s equity award plans:


	Shares (in thousands)	Weighted- average grant date fair value
Unvested balance at December 31, 2020	1,495	$	102.34
Granted	990	$	29.17
Vested	(294)	$	108.85
Forfeited	(118)	$	84.63
Unvested balance at March 31, 2021	2,073	$	67.48

Employee stock purchase plan

In June 2013, the Company adopted its 2013 Employee Stock Purchase Plan (“2013 ESPP”), which authorized the initial issuance of up to a total of 0.2 million shares of the Company’s common stock to participating employees. During each of the three months ended March 31, 2021 and 2020, less than 0.1 million shares of common stock were issued under the 2013 ESPP.