Stock-Based Compensation Plans

3 Months Ended

Mar. 31, 2023

Stock-Based Compensation Plans [Abstract]

Stock-Based Compensation Plans

8.    Stock-Based Compensation Plans

As of March 31, 2023, the Company has reserved 7,951,555 shares of common stock for issuance under the 2019 Equity Incentive Plan, or the 2019 Plan.

A summary of the shares available for issuance under the 2019 Plan is as follows:

	Number of Shares
Balances, December 31, 2022	2,209,072
Authorized	1,534,238
Allowance for Performance Stock Units for overperformance	(99,350)
Granted/Awarded	(591,251)
Cancelled	25,966
Balances, March 31, 2023	3,078,675

The exercise price of Incentive Stock Options, or ISOs, and Non-Statutory Stock Options, or NSOs, shall not be less than 100% and 85%, respectively, of the estimated fair value of the shares on the date of grant as determined by the Board of Directors. The exercise price of ISOs and NSOs granted to a 10% stockholder shall not be less than 110% of the estimated fair value of the shares on the date of grant as determined by the Board of Directors. To date, options have a term of ten years and generally vest over four years from the date of grant.

Stock option activity under the Company’s 2007 Stock Option Plan, 2015 Equity Incentive Plan and 2019 Plan is set forth below:

	Options Outstanding
	Number of	Weighted Average		Weighted Average ‎Remaining ‎Contractual Term		Aggregate Intrinsic
	Shares	Exercise Price		(Years)		Value
Balances, December 31, 2022	3,839,858	$	24.22		6.41	$	112,755
Options granted	—		—
Options exercised	(144,474)		7.69
Options cancelled	(5,531)		53.57
Balances, March 31, 2023	3,689,853	$	24.82		6.23	$	63,056
Vested and exercisable at March 31, 2023	2,888,982	$	20.17		5.65	$	60,800
Vested and expected to vest at March 31, 2023	3,689,853	$	24.82		6.23	$	63,056

The aggregate intrinsic value of options exercised during the three months ended March 31, 2023 was $6,482,000. The aggregate intrinsic value was calculated as the difference between the exercise prices of the underlying options and the estimated fair value of the common stock on the date of exercise.

Restricted Stock Units

Restricted stock units, or RSUs, are granted under the 2019 Plan and generally vest over four years in annual equal increments. A summary of RSUs activity for the three months ended March 31, 2023 is as follows:

	Number of ‎Restricted ‎Stock Units		Weighted Average ‎Grant Date ‎Fair Value
Balances, December 31, 2022		1,122,356	$	42.70
Awards granted		491,901		46.43
Awards vested		(207,995)		40.05
Awards canceled		(20,435)		43.14
Balances, March 31, 2023		1,385,827	$	44.42
Expected to vest at March 31, 2023		1,385,827	$	44.42

Performance Stock Units

Performance stock units, or PSUs, are granted under the 2019 Plan and generally vest over three years. A summary of PSUs activity for the three months ended March 31, 2023 is as follows:

	Number of Performance Stock Units		Weighted Average Grant Date Fair Value
Balances, December 31, 2022		207,468	$	77.12
Awards granted		99,350		69.40
Awards vested		—		—
Awards canceled		—		—
Balances, March 31, 2023		306,818	$	74.62
Expected to vest at March 31, 2023		306,818	$	74.62

The number of shares expected to vest as of March 31, 2023 reflects the performance and vesting of PSUs at 100% of the target value of shares granted.

2019 Employee Stock Purchase Plan

As of March 31, 2023, 266,170 shares of common stock have been issued to employees participating in the 2019 Employee Stock Purchase Plan, or the ESPP, and 1,556,245 shares were available for future issuance under the ESPP.

Stock-Based Compensation

In March 2023, the Company awarded an aggregate of 99,350 PSUs, assuming target performance. Up to one-third of the target award can be earned and vested at the end of the first and second annual measurement periods based on the total stockholder return, or TSR, of the Company’s common stock price relative to a group of peer companies, and up to 200% of the target award at the end of the three year performance measurement period. The fair value of the PSUs was estimated using the Monte Carlo simulation model and the following assumptions for the three months ended March 31, 2023: peer companies volatility of 62.3%, Company volatility of 61.2%, risk-free interest rate of 4.58%, correlation with index of 0.38, and dividend yield of 0%.

The following table summarizes the total stock-based compensation expense included in the condensed statements of operations and comprehensive loss for all periods presented (in thousands):

	Three Months Ended
	March 31,
	2023		2022
Cost of goods sold	$	390	$	221
Research and development expenses		1,632		1,069
Selling, general and administrative expenses		6,816		3,688
	$	8,838	$	4,978

As of March 31, 2023, there was total unrecognized compensation costs of $14,142,000 related to stock options expected to be recognized over a period of approximately 2.21 years, a total of $76,573,000 of unrecognized compensation costs related to unvested RSUs and PSUs expected to be recognized over a period of approximately 3.02 years and $144,000 of unrecognized compensation costs related to the ESPP, which the Company will recognize over 0.13 years.