Stock-based compensation

9 Months Ended

Sep. 30, 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 September 30, 2021, the total number of shares of common stock available for issuance under the 2013 Plan was approximately 2.5 million.

Stock-based compensation expense

The Company recognized stock-based compensation expense totaling $28.3 million and $101.9 million for the three and nine months ended September 30, 2021, respectively. The Company recognized stock-based compensation expense totaling $38.8 million and $123.6 million for the three and nine months ended September 30, 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 September 30,		For the nine months ended September 30,
	2021	2020	2021	2020
Stock options	13,688	22,723	51,671	73,236
Restricted stock units	10,335	11,935	33,601	37,931
Employee stock purchase plan and other	4,315	4,160	16,591	12,473
	28,338	38,818	101,863	123,640

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 September 30,				For the nine months ended September 30,
	2021		2020		2021		2020
Research and development	$	13,688	$	18,837	$	49,324	$	58,204
Selling, general and administrative	14,650		19,981		52,539		65,436
	$	28,338	$	38,818	$	101,863	$	123,640

Stock-based compensation of $0.1 million and $0.8 million was capitalized into inventory for the three and nine months ended September 30, 2021, respectively. Stock-based compensation of $0.3 million and $0.4 million was capitalized into inventory for the three and nine months ended September 30, 2020, respectively. As of September 30, 2021, the Company had approximately $179.1 million of unrecognized stock-based compensation expense, which is expected to be recognized over a weighted-average period of approximately 2.1 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. 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 and nine months ended September 30, 2021, respectively, the Company recognized $3.1 million and $27.1 million in expense related to this program, which includes $1.6 million and $13.6 million in stock compensation expense related to the anticipated grants of stock. During the third quarter of 2021, the Company granted 0.1 million unrestricted stock awards, related to the retention program, to those employees impacted by the orderly wind down of the Company's operations in Europe.

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	1,188	$	27.85
Exercised	(219)	$	6.82
Canceled, forfeited, or expired	(1,557)	$	104.89
Outstanding at September 30, 2021	5,674	$	92.68
Exercisable at September 30, 2021	3,527	$	111.09
Vested and expected to vest at September 30, 2021	5,373	$	92.68

During the nine months ended September 30, 2021, 0.2 million stock options were exercised, resulting in total proceeds to the Company of $1.5 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	3,268	$	26.81
Vested	(501)	$	114.58
Forfeited	(724)	$	60.33
Unvested balance at September 30, 2021	3,538	$	39.43

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. In June 2021, the Company amended the 2013 ESPP to include an additional 1.4 million shares of the Company’s common stock available to participating employees. During the nine months ended September 30, 2021 and 2020, respectively, 0.1 million shares and less than 0.1 million shares of common stock were issued under the 2013 ESPP.