XML 50 R18.htm IDEA: XBRL DOCUMENT v3.20.1
Stock-based Compensation
 3 Months Ended
Mar. 31, 2020
Share-based Payment Arrangement [Abstract]  
Stock-based Compensation Stock-based Compensation
The Company recorded stock-based compensation expense related to stock options and shares issued under the Company's 2017 Employee Stock Purchase Plan (2017 Plan) in the following expense categories of its accompanying consolidated statements of operations for the three months ended March 31, 2020 and 2019:
Three Months Ended March 31,
 20202019
Cost of product sales$54  $21  
Research and development257  243  
General and administrative2,149  2,158  
$2,460  $2,422  
In addition, stock-based compensation expense of $38 and $1 was charged to inventory and prepaid expenses and other assets, respectively, during the three months ended March 31, 2020, which represents the total stock-
based compensation expense incurred related to employees involved in the manufacturing process of finished goods and samples during the period.
Stock Options
The Company issues stock-based awards pursuant to its 2010 Stock Incentive Plan. Effective as of October 12, 2017, the Company's 2010 Stock Incentive Plan was amended and restated (A&R Plan).The Company has issued service-based and performance-based stock options that generally have a contractual life of up to 10 years and may be exercisable in cash or as otherwise determined by the Company's board of directors or committee thereof. Vesting generally occurs over a period of not greater than four years. Performance-based options may vest upon the achievement of certain milestones in connection with the Company's development programs. Additionally, the Company has issued stock options in excess of the fair market value of Common Stock on the issuance date that were only exercisable upon a change in control or upon or after an initial public offering. As of March 31, 2020, all of the performance conditions related to performance-based stock options issued by the Company have been achieved.
The following table summarizes the activity related to stock option grants to employees and nonemployees for the three months ended March 31, 2020:
 SharesWeighted
average
exercise price
per share		Weighted
average
remaining
contractual life
Outstanding at December 31, 20197,399,217  $9.81  6.37
Granted1,146,258  5.65  
Exercised—  —  
Expired—  —   
Forfeited(172,435) 10.57
Outstanding at March 31, 20208,373,040  $9.22  6.59
Exercisable at March 31, 20204,844,852  $9.41  4.90
Vested and expected to vest at March 31, 20208,373,040  $9.22  6.59
During the three months ended March 31, 2020, stock options to purchase 1,146,258 shares of Common Stock were granted to employees and generally vest over four years. The stock options had an estimated weighted average grant date fair value of $3.44. During the three months ended March 31, 2019, stock options to purchase 1,686,800 shares of Common Stock were granted to employees that generally vest over four years. The stock options had an estimated weighted average grant date fair value of $4.67.
Included in the table above are 90,000 of options granted outside the A&R Plan. The grants were made pursuant to the NASDAQ inducement grant exception in accordance with NASDAQ Listing Rule 5635(c)(4).
The grant date fair value of each stock option grant was estimated at the time of grant using the Black-Scholes option-pricing model using the following weighted average assumptions:
Three Months Ended March 31,
20202019
Risk free interest rate0.75 %2.57 %
Expected term (in years)6.086.08
Expected volatility68.34 %67.14 %
Annual dividend yield0.00 %0.00 %
Fair value of common stock$5.65  $7.49  
At March 31, 2020, the unrecognized compensation cost related to unvested stock options expected to vest was $19,423. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 2.5 years.
Restricted Stock Units
The Company has issued service-based and performance-based restricted stock units (RSUs). Vesting generally occurs over a period not greater than four years. Vesting of the performance-based RSUs is subject to the achievement of certain milestones in connection with the Company's development programs.
The following table summarizes the activity related to RSUs granted to employees for the three months ended March 31, 2020:
 Shares
Balance at December 31, 2019—  
Granted1,290,203  
Vested and settled—  
Expired/ forfeited/ canceled(2,217) 
Balance at March 31, 20201,287,986  
Expected to vest at March 31, 20201,287,986  
In March 2020, the Company granted 1,290,203 RSUs at a grant date fair value of $5.41, of which 718,150 were service-based RSUs and 572,053 were performance-based RSUs. As of March 31, 2020, the milestones associated with the performance based-RSUs are not probable of achievement, and accordingly, no stock based compensation expense has been recognized to date for these awards. At March 31, 2020, the unrecognized compensation cost related to unvested service-based RSUs expected to vest was $3,806, to be recognized over an estimated weighted-average amortization period of 4.0 years. The unrecognized compensation cost related to unvested performance-based RSUs was $3,095, which will be recognized commencing in the period in which the performance condition is deemed probable of achievement over the remaining service period.
Included in the table above are 60,000 of RSUs granted outside the A&R Plan. The grants were made pursuant to the NASDAQ inducement grant exception in accordance with NASDAQ Listing Rule 5635(c)(4).
2017 Employee Stock Purchase Plan
Under the 2017 Plan, shares of Common Stock may be purchased by eligible employees who elect to participate in the 2017 Plan at 85% of the lower of the fair market value of Common Stock on the first or last day of designated offering periods. The Company recognized stock-based compensation expense of $150 and $114 during the three months ended March 31, 2020 and 2019, respectively, related to the 2017 Plan.
The Company calculated the fair value of each option grant and the shares issued under the 2017 Plan on the respective dates of grant using the following weighted average assumptions:
Three Months Ended March 31,
20202019
Risk free interest rate1.57 %2.51 %
Expected term (in years)0.50.5
Expected volatility79.59 %82.20 %
Annual dividend yield0.00 %0.00 %