Share-based compensation

12 Months Ended

Dec. 31, 2024

Share-based compensation

Share-based compensation

10. Share-based compensation

2020 Equity Incentive Plan

In September 2020, the Company adopted the 2020 Equity Incentive Plan, or the 2020 Plan, which supersedes all prior equity incentive plans. The number of shares of common stock reserved for issuance under the 2020 Plan will automatically increase on January 1 of each year, beginning on January 1, 2021 and continuing through and including January 1, 2030, by 4% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the Company’s board of directors. As of December 31, 2024, there were 1,698,331 shares available for issuance under the 2020 Plan. On January 1, 2025, the number of shares available for future issuance under the 2020 Plan increased by 2,578,433 shares.

Stock options under the 2020 Plan typically last ten years unless the board of directors decides otherwise. Vesting periods vary, typically ranging from one to four years for employees, officers, directors, and consultants. Some options may vest faster in case of a change in control, as defined in the 2020 Plan.

On October 2, 2023, the Morphimmune 2020 Equity Incentive Plan, or the Morphimmune Plan, was assumed by the Company in conjunction with the Merger (Note 7). There were 373,738 shares available for issuance under the Morphimmune Plan as of December 31, 2024.

2024 Inducement Plan

In October 2024, the Company adopted the 2024 Inducement Plan, or the 2024 Plan, to reserve 2,000,000 shares of the Company’s common stock to be used exclusively for grants of equity awards to individuals that were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company. The terms and conditions of the 2024 Plan are substantially similar to the Company’s 2020 Plan. As of December 31, 2024, there were 559,300 shares available for issuance under the 2024 Plan.

Stock options granted to Chief Executive Officer 

On June 28, 2023, Clay Siegall was granted 2,137,080 options to purchase shares of the Company’s common stock at an initial exercise price of $5.91 per share, or the Inducement Grant. The options vest over time during Dr. Siegall’s continued employment, which commenced on October 2, 2023, in connection with the closing of the Merger. 25% of the options granted vest after one year of employment with the Company, and the remaining 75% vest monthly over the 36 months immediately following the one-year anniversary. The Inducement Grant, the Morphimmune Plan, the 2024 Plan and the 2020 Plan are collectively referred to as the Plans.

2020 Employee Stock Purchase Plan

The Company also adopted the 2020 Employee Stock Purchase Plan, or the ESPP, in September 2020. Under the ESPP, employees meeting certain specific employment qualifications are eligible to participate and can purchase shares of common stock through payroll deductions. The purchase price is 85% of the lower of the fair market value of the stock at the commencement or end of the offering period. The ESPP permits eligible employees to purchase shares of common stock through payroll deductions for up to 15% of qualified compensation.

The maximum number of shares of common stock that may be issued under the ESPP will not exceed 125,000 shares of common stock, plus the number of shares of common stock that are automatically added on January 1 of each calendar year for a period of up to ten years, commencing on the first January 1 following the year in which an initial public offering, or IPO, occurs and ending on, and including, January 1, 2030, in an amount equal to the lesser of (i) 1% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, and (ii) 1,000,000 shares of common stock. As of December 31, 2024, there were 906,251 shares available under the ESPP. No shares of common stock have been issued under the ESPP as of December 31, 2024. On January 1, 2025, the number of shares available for future issuance under the ESPP increased by 644,608 shares.

Stock options

A summary of option activity under the Plans during the year ended December 31, 2024 is as follows:

				Weighted
		Weighted		average	Aggregate
		average		remaining	Intrinsic
	Number of	exercise price		contractual	Value
	shares	per share		term (years)	(in thousands)
Outstanding at December 31, 2023	7,978,291	$	6.15	8.62	$	45,360
Granted	6,616,169		14.66
Exercised	(769,382)		2.93
Forfeited	(1,443,809)		10.67
Expired	(390,488)		20.93
Outstanding at December 31, 2024	11,990,781	$	10.02	8.69	$	34,209
Exercisable at December 31, 2024	3,381,263	$	5.11	7.26	$	22,083

Aggregate intrinsic value in the above table is calculated as the difference between the exercise price of the options and the Company’s fair value of its common stock as of period end.

The weighted-average grant date fair value per share of stock options granted during the years ended December 31, 2024 and 2023 was $10.86 and $6.09, respectively. The aggregate intrinsic value for options exercised during the years ended December 31, 2024 and 2023 was $10.3 million and $5.9 million, respectively.

The weighted average assumptions used in the Black-Scholes option-pricing model for stock options granted were:

	Year Ended December 31,
	2024			2023
Expected volatility		88.4	%		92.1	%
Risk-free interest rate		4.0	%		4.6	%
Expected term (in years)		5.85			5.60
Expected dividend yield		—	%		—	%

Share-based compensation expense recorded in the consolidated statements of operations and comprehensive loss is as follows (in thousands):

	Year Ended December 31,
	2024		2023
Research and development	$	5,146	$	1,981
General and administrative		10,602		4,242
Total share-based compensation expense	$	15,748	$	6,223

Unrecognized compensation cost related to unvested options was $75.2 million as of December 31, 2024 and will be recognized over an estimated weighted-average period of 3.4 years.