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Stockholders' Equity
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Stockholders' Equity Stockholders’ Equity
Preferred Stock
The Company has 10.0 million shares of preferred stock authorized, which may be issued at the discretion of the Company’s board of directors. The board of directors may issue shares of preferred stock in one or more series and may fix the number, rights, preferences, privileges and restrictions on such shares. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and sinking fund terms. As of December 31, 2023, the Company does not have any shares of preferred stock issued or outstanding.
Common Stock
Public Offering of Common Stock
In January 2021, the Company sold 5.3 million shares of its common stock through an underwritten public offering at a price to the public of $27.00 per share for aggregate net proceeds to the Company of $134.6 million, after deducting underwriting discounts and commissions and other offering expenses paid by the Company. The offering closed on January 8, 2021.
As of December 31, 2023 and 2022, the Company had 82.9 million and 81.9 million shares of common stock outstanding, respectively.
The Company had reserved the following shares of common stock for issuance as follows (in thousands):
December 31,
20232022
Common stock options & RSUs outstanding13,612 14,215 
Reserve balance for Sales Agreement10,937 10,937 
Common stock available for grant9,189 5,661 
ESPP shares available for purchase540 264 
401(k) matching plan65 192 
Total34,343 31,269 
Open Market Sale Agreement
In June 2020, the Company entered into the Sales Agreement with Jefferies pursuant to which the Company could sell, from time to time, through or to Jefferies, up to an aggregate of $150.0 million of the Company’s common stock. In June 2023, the Company entered into the Amended Sales Agreement. In connection with the Amendment, the Company filed a new shelf registration statement on Form S-3 which the SEC declared effective in August 2023. The Amended Sales Agreement provides for the issuance and sales of shares of the Company's common stock having an aggregate offering price of up to $100.0 million through or to Jefferies. As of December 31, 2023, up to $100.0 million of the Company's common stock remained available to be sold under the Amended Sales Agreement, subject to conditions specified in the Amended Sales Agreement.
Equity Incentive Plan
In 2018, the Company adopted the 2018 Plan for eligible employees, officers, directors, advisors and consultants, which provides for the grant of incentive and non-statutory stock options, restricted stock awards and stock appreciation rights. The terms of the stock option agreements, including vesting requirements, are determined by the board of directors, subject to the provisions of the 2018 Plan. Options granted by the Company generally vest within four years and are exercisable from the grant date until ten years after the date of grant. Vesting of certain employee options may be accelerated in the event of a change in control of the Company. Pursuant to the terms of the 2018 Plan, the number of shares reserved and available to issue will automatically increase on January 1st of each year in an amount equal to 4% of the total number of shares of common stock outstanding on the
December 31st immediately preceding calendar year, unless the board of directors elects to forego or reduce such increase. As of December 31, 2023, 22.8 million shares of common stock had been authorized for issuance under the 2018 Plan and the Company's 2008 Equity Incentive Plan which expired in 2018.
Stock options are governed by stock option agreements between the Company and recipients of stock options. The exercise price of each option may not be less than 100% of the fair market value of the common stock subject to the option on the date the option is granted. A 10% or greater stockholder may not be granted an incentive stock option unless the exercise price of such option is at least 110% of the fair value of the common stock on the date of grant and the option is not exercisable after the expiration of five years from the grant date. Options become exercisable and expire as determined by the Company's Compensation Committee, or the Committee, of the Board of Directors, or the Board, provided that the term of incentive stock options may not exceed ten years from the date of grant for options granted to those other than 10% stockholders.
2019 Employee Stock Purchase Plan
In 2019, the Company adopted the ESPP. The Company reserved 1.0 million shares of common stock pursuant to purchase rights granted to the Company’s employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase on January 1 of each calendar year by the lesser of (1) 1% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, (2) 1.0 million shares or (3) a number determined by the Company’s board of directors that is less than (1) and (2). Under the ESPP, eligible employees are granted the right to purchase shares of the Company’s common stock through payroll deductions that cannot exceed 15% of each employee’s salary. The ESPP provides for a 24-month offering period, which includes four six-month purchase periods. At the end of each purchase period, eligible employees are permitted to purchase shares of common stock at the lower of 85% of fair market value at the beginning of the offering period or fair market value at the end of the purchase period. The ESPP is considered a compensatory plan. As of December 31, 2023, 1.3 million shares of common stock had been purchased under the ESPP.
Restricted Stock Units
During the year ended December 31, 2023, the Company granted 1.0 million RSUs covering an equal number of shares of the Company's common stock to employees with a weighted-average grant date fair value of $4.36 per RSU. The fair value of RSUs is determined on the date of grant based on the market price of the Company's common stock as of that date. The fair value of the RSUs is recognized as an expense ratably over the vesting period of four years. As of December 31, 2023, no shares underlying the RSUs had vested or been released and 0.4 million shares had been forfeited .
Stock Option Activity
Repricing Program
On October 17, 2023, the Committee approved an option repricing program, or the repricing program, which was effective on November 6, 2023, or the Effective Date. The repricing program generally applies to options to purchase shares of the Company’s common stock that: (i) were granted under the Company’s equity incentive plans; (ii) as of the Effective Date, are held by the Company’s then-current employees (subject to the retention requirements below); and (iii) have an exercise price per share greater than $5.00. Such options are referred to as the Eligible Options. The Eligible Options include options held by certain of the Company's executive officers. Options held by nonemployee members of the Board are not eligible for the repricing program.
As of the Effective Date, the Eligible Options were immediately repriced such that the exercise price per share for such options was reduced to the closing price of the Company’s common stock on the Effective Date, subject to certain retention requirements outlined below. The closing price of the Company’s common stock was $0.84 and became the reduced exercise price for the Eligible Options. If an employee exercises Eligible Options in advance of the end of the retention period as described below, the employee will be required to pay a premium exercise price equal to the original exercise price per share of the Eligible Options. The Eligible Options that were previously incentive stock options were amended to become nonstatutory stock options on or following the Effective Date. There were no changes to the number of shares underlying the Eligible Options or to the vesting schedules or expiration dates of the Eligible Options.
In order to exercise the Eligible Options at the reduced exercise price, holders of the Eligible Options are required to remain in service with the Company through the end of the relevant retention period. The retention period begins on the Effective Date and ends on the earliest of the following: (i) the date 12 months (or, in the case
of the Eligible Options held by the Company's Chief Executive Officer that are unvested as of the Effective Date, 18 months) following the Effective Date; (ii) a Change in Control (as defined in the applicable equity incentive plan) if the Eligible Options are not assumed or continued by the successor or acquiror entity (or its parent company) in such Change in Control or substituted for a similar award of the successor or acquiror entity (or its parent company); and (iii) the optionholder’s termination of Continuous Service (as defined in the applicable equity incentive plan) (a) due to such individual’s death or disability, (b) by the Company (or successor entity in a Change in Control) other than for Cause (as defined in the applicable equity incentive plan) or (c) due to such optionholder’s resignation on or following a Change in Control under certain circumstances.
As of the Effective Date, the total number of shares underlying all Eligible Options was 6.9 million shares. The effect of the repricing resulted in total incremental stock-based compensation expense of $2.1 million, $1.9 million of which will be recognized on a straight-line basis through the end of each of the applicable retention periods, while the remaining $0.2 million will be recognized on a straight-line basis over the original vesting period for those options that vest after the end of each applicable retention period. The incremental stock-based compensation expense was calculated using the lattice option-pricing model.
For the year ended December 31, 2023, the Company recognized incremental stock-based compensation expense totaling $0.3 million associated with the repricing program, which is included in general and administrative and research and development expense on the consolidated statement of operations.
A summary of the activity under the 2008 Plan and the 2018 Plan is as follows:
Outstanding OptionsWeighted
Average
Remaining
Contractual Life
(In Years)
Aggregate
Intrinsic
Value
(In Thousands)
Number of
Options
(In Thousands)
Weighted
Average
Exercise
Price
Balances at December 31, 202214,215 $14.74 6.89$1,749 
Options granted5,662 3.95 
Options exercised(351)1.90 
Options forfeited(3,275)10.89 
Options expired(3,261)13.30 
Balances at December 31, 202312,990 $11.73 6.92$42 
Vested and expected to vest at December 31, 202312,457 $11.92 6.84$37 
Exercisable at December 31, 20237,803 $14.15 5.62$— 
The aggregate intrinsic values of options outstanding, vested and expected to vest, and exercisable were calculated as the difference between the exercise price of the options and the estimated fair value of the Company’s common stock. The weighted average exercise prices and aggregate intrinsic values of the Eligible Options in the above table are based on the original exercise prices due to the applicable retention periods.
Stock-Based Compensation Expense
Stock-based compensation expense for awards was calculated based on awards previously granted to employees, directors and nonemployees that are ultimately expected to vest and has been reduced for estimated forfeitures.
Stock-based compensation expense was allocated as follows (in thousands):
Year Ended December 31,
202320222021
Research and development$14,258 $17,875 $14,271 
General and administrative14,461 14,508 11,971 
Total stock-based compensation expense$28,719 $32,383 $26,242 
Stock-based compensation expense included expense related to the ESPP of $2.6 million, $2.9 million and $1.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Valuation Assumptions
The Company uses the Black-Scholes option-pricing model to estimate the fair value of stock options at the grant date. The Black-Scholes option-pricing model requires the Company to make certain estimates and assumptions, including assumptions related to the expected price volatility of the Company’s stock, the period during which the options will be outstanding, the rate of return on risk-free investments and the expected dividend yield for the Company’s stock.
The expected volatility is based on the historical volatility of the Company's stock and the stock of similar entities within the Company’s industry over periods commensurate with the Company’s expected term assumption. The expected term of stock option grants represents the weighted-average period the options are expected to remain outstanding and is based on the “simplified” method where the expected term is the midpoint between the vesting date and the end of the contractual term for each option. The Company bases the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term. In reference to the expected dividend yield assumption, the Company has not historically paid, and does not expect for the foreseeable future to pay, a dividend.
The weighted average grant-date fair value of stock options granted during the years ended December 31, 2023, 2022 and 2021 was $2.87, $8.63 and $18.57 per share, respectively. The intrinsic value of stock options exercised was $1.0 million, $3.2 million and $34.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. Due to the Company’s net operating losses, the Company did not realize any tax benefits from stock-based payment arrangements for the years ended December 31, 2023, 2022 and 2021.
The fair value of stock option awards granted to employees and directors was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted average valuation assumptions:
Year Ended December 31,
202320222021
Volatility84 %78 %72 %
Expected term (years)5.895.935.98
Risk-free interest rate4.16 %2.52 %0.95 %
Expected dividend yield— — — 
As of December 31, 2023, total compensation cost not yet recognized related to unvested stock options granted to employees and directors was $24.6 million, which is expected to be recognized over a weighted-average period of 1.8 years.
The fair value of the rights granted to employees under the ESPP was estimated at the date of offer using a Black-Scholes option-pricing model with the following weighted average valuation assumptions:
Year Ended December 31,
202320222021
Volatility102 %110 %72 %
Expected term (years)1.521.631.27
Risk-free interest rate4.64 %3.76 %0.27 %
Expected dividend yield— — —