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Stock-Based Compensation
 9 Months Ended
Sep. 30, 2020
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
Summary of Plans— Upon completion of the Merger with Arsanis on March 13, 2019, X4’s 2015 Employee, Director and Consultant Equity Incentive Plan, as amended (the “2015 Plan”), Arsanis’ 2017 Equity Incentive Plan (the “2017 Plan”) and Arsanis’ 2017 Employee Stock Purchase Plan (the “2017 ESPP”) were assumed by the Company. In June 2019, the Company adopted the 2019 Inducement Equity Incentive Plan (the “Inducement Plan” and collectively with the 2015 Plan, 2017 Plan and 2017 ESPP, the “Plans”). These plans are administered by the Board of Directors or by a committee of the Board of Directors. The exercise prices, vesting and other restrictions are determined at the discretion of the Board of Directors, or its committee if so delegated, except that the exercise price per share of stock options may not be less than 100% of the fair market value of the share of common stock on the date of grant and the term of the stock option may not be greater than ten years. Incentive stock options granted to employees and restricted stock awards granted to employees, officers, members of the board of directors, advisors, and consultants of the Company typically vest over four years. Non-statutory options granted to employees, officers, members of the board of directors, advisors, and consultants of the Company typically vest over three or four years. Shares that are expired, terminated, surrendered or canceled under the Plans without having been fully exercised will be available for future awards. In addition, shares of common stock that are tendered to the Company by a participant to exercise an award are added to the number of shares of common stock available for the grant of awards.
2015 Employee, Director and Consultant Equity Incentive Plan— In 2015, the Board of Directors and shareholders of the Company adopted the 2015 Plan, which provides for the Company to grant incentive stock options or nonqualified stock options, restricted stock awards and other stock-based awards to employees, directors and consultants of the Company. The total number of shares of common stock that may be issued under the 2015 Plan is 969,340 shares. Shares that are expired, forfeited, canceled or otherwise terminated without having been fully exercised will be available for future grant under the 2015 Plan. As of November 2, 2020, there were a de minimis number shares available for issuance under the 2015 Plan.
2017 Equity Incentive Plan— Under the 2017 Plan, the Company may grant incentive stock options, non-qualified options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. Incentive stock options may be granted only to the Company’s employees, including officers and directors who are also employees. Awards other than incentive stock options may be granted to employees, officers, members of the board of directors, advisors and consultants of the Company. On June 10, 2020, the Company's stockholders approved the amendment and restatement of the 2017 Plan (the “Amended and Restated 2017 Plan”). The amendments increased the number of shares of common stock reserved for issuance under the 2017 Plan by an additional 474,465 shares (subject to adjustment for certain corporate events) and amended the “evergreen” provision of the 2017 Plan to provide for an automatic increase in the share reserve on the first day of each year, beginning on January 1, 2021 and ending on January 1, 2027, by an amount equal to the lesser of (a) 4% of the Company's outstanding shares on such date and (b) a number of shares determined by the Board of Directors. As of November 2, 2020, approximately 30,000 shares were available for future issuance under the Amended and Restated 2017 Plan.
2017 Employee Stock Purchase Plan— The 2017 ESPP provides participating employees with the opportunity to purchase shares of the Company’s common stock at defined purchase prices over six-month offering periods. For the nine months ended September 30, 2020, 10,057 shares of common stock were issued under the 2017 ESPP.
2019 Inducement Equity Incentive Plan— On June 17, 2019, the Board of Directors approved the adoption of the Inducement Plan, which is used exclusively for the grant of equity awards to individuals who were not previously employees of the Company (or following a bona fide period of non-employment), as an inducement material to such individual’s entering into employment with the Company, pursuant to Nasdaq Listing Rule 5635(c)(4). The Board of Directors approved amendments to the Inducement Plan in December 2019 and October 2020, increasing the total number of shares of common stock that may be issued under the Inducement Plan to 650,000 shares. Shares that are expired, forfeited, canceled or otherwise terminated without having been fully exercised will be available for future grant under the Inducement Plan. In addition, shares of common stock that are tendered to the Company by a participant to exercise an award are added to the number of shares of common stock available for future grants. As of November 2, 2020, approximately 290,000 shares were available for future issuance under the Inducement Plan.
Stock Option Valuation— The following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted to employees, directors and non- employees:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2020201920202019
Risk-free interest rate0.4 %1.6 %0.6 %2.0 %
Expected term (in years)6.16.06.06.0
Expected volatility95.1 %84.5 %94.9 %88.0 %
Expected dividend yield0 %0 %0 %0 %

Stock Options
The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2020:
Number of
Shares		Weighted
Average
Exercise
Price		Weighted
Average
Contractual
Term (Years)		Aggregate
Intrinsic
Value
Outstanding as of December 31, 20191,297,029 $17.05 8.4$1,286 
Granted498,662 9.13 
Exercised(17,689)7.25 
Forfeited(164,978)21.68 
Outstanding as of September 30, 20201,613,024 $14.24 8.2$— 
Exercisable as of September 30, 2020682,632 $18.23 7.0$— 
Vested and expected to vest as of September 30, 20201,404,246 $14.43 8.1$— 
 
The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock. The aggregate intrinsic value of stock options exercised during the nine months ended September 30, 2020 and 2019 was $43 thousand and $184 thousand, respectively. The weighted average grant-date fair value per share of stock options granted during the nine months ended September 30, 2020 and 2019 was $6.93 and $11.33, respectively.

Restricted Stock Units— The following table summarizes the Company's restricted stock unit activity for the nine months ended September 30, 2020
Number of
Shares
Unvested as of December 31, 2019101,773 
Granted681,081 
Vested(131,574)
Forfeited(39,291)
Unvested as of September 30, 2020611,989 

During the nine months ended September 30, 2020, the Company granted 678,581 performance based restricted stock units, which vest in part based on the Company's achievement of operational milestones and over time thereafter for the subsequent two years as the grantee continues to provide services to the Company. As of September 30, 2020, two out of the four performance criteria had been met. The Company believes that the achievement of the remaining operational milestones is
probable and, accordingly, stock-based compensation expense has been recognized for the awards using the accelerated attribution model based on the fair value of the awards as of the date of grant and management's best estimate of the date each operational milestone will be achieved. The Company will update its estimates related to the probability and timing of achievement of the operational milestones each period until the award either vests or is forfeited.
Stock-Based Compensation— As of September 30, 2020, total unrecognized compensation expense related to unvested stock options and restricted stock units was $9.1 million, which is expected to be recognized over a weighted average period of 2.3 years.
Stock-based compensation expense was classified in the consolidated statements of operations as follows:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2020201920202019
Research and development expense$1,006 $301 $1,711 $599 
General and administrative expense1,238 390 2,319 787 
Total stock-based compensation$2,244 $691 4,030 1,386