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Stock Based Compensation
 3 Months Ended
Mar. 31, 2020
Share-based Payment Arrangement [Abstract]  
Stock Based Compensation Stock-Based Compensation
On June 11, 2019, the Company held its 2019 Annual Meeting of Stockholders (the “Annual Meeting”). At the Annual Meeting, the Company’s stockholders approved the Company’s 2019 Equity Incentive Plan (the “2019 Plan”) and the Company’s 2019 Employee Stock Purchase Plan (the “2019 ESPP,” and together with the 2019 Plan, the “Plans”). The 2019 Plan is the successor to the Private Millendo 2012 Stock Plan and the OvaScience 2012 Stock Incentive Plan (each, as amended, the “Prior Plans”) and allows the Company to grant stock options, restricted stock unit awards and other awards at levels determined appropriate by the Company’s Board of Directors (the “Board”) or the Compensation Committee of the Board. No additional awards will be granted under either of the Prior Plans. The 2019 ESPP enables employees to purchase shares of the Company’s common stock through offerings of rights to purchase the Company’s common stock to all eligible employees. The Plans were adopted by the Board on April 29, 2019, subject to approval by the Company’s stockholders, and became effective with such stockholder approval on June 11, 2019. Outstanding awards under the Prior Plans continue to be subject to the terms and conditions of the Prior Plans.
The aggregate number of shares of the Company's common stock initially reserved for issuance under the 2019 Plan was 2,919,872 shares, which is the sum of (i) 534,320 shares, (ii) the number of unallocated shares remaining available for grant under the Prior Plans as of the effective date of the 2019 Plan, and (iii) the Prior Plans' Returning Shares (as defined below), as such shares become available from time to time. The number of shares of the Company's common stock reserved for issuance under the 2019 Plan will automatically increase on January 1 of each year, for a period of ten years, from January 1, 2020 continuing through January 1, 2029, by 4% of the total number of shares of the Company's common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Board.
The term “Prior Plan's Returning Shares” refers to the following shares of the Company's common stock subject to any outstanding stock award granted under either of the Prior Plans: shares of common stock subject to awards that (i) expire or terminate for any reason prior to exercise or settlement; (ii) are forfeited because of the failure to meet a contingency or condition required to vest such shares or otherwise return to the Company; (iii) are reacquired, withheld (or not issued) to satisfy a tax withholding obligation in connection with an award or to satisfy the purchase price or exercise price of a stock award. The foregoing includes shares subject to outstanding awards under the OvaScience 2011 Stock Incentive Plan that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right.
The following shares of the Company's common stock under the 2019 Plan (collectively, the “2019 Plan Returning Shares”) will also become available again for issuance under the 2019 Plan: (i) any shares subject to a stock award that are not issued because such stock award expires or otherwise terminates without all of the shares covered by such stock award having been issued, (ii) any shares subject to a stock award that are not issued because such stock award is settled in cash; (iii) any shares issued pursuant to a stock award that are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required for the vesting of such shares; and (iv) any shares reacquired by the Company in satisfaction of tax withholding obligations on a stock award or as consideration for the exercise or purchase price of a stock award.
The aggregate number of shares of the Company's common stock that may be issued under the 2019 ESPP is 133,580 shares, plus the number of shares of the Company's common stock that are automatically added on January 1st of each year, for a period of up to ten years, from January 1, 2020 continuing through January 1, 2029, by the lesser of (i) 1% of the total number
of shares of the Company's capital stock outstanding on December 31 of the preceding calendar year, or (ii) 133,580 shares of the Company's common stock, unless a lesser number of shares is determined by the Board. Pursuant to the terms of the 2019 Employee Stock Purchase Plan, an additional 133,580 shares were added to the number of available shares effective January 1, 2020.
The Company measures employee and nonemployee stock-based awards at grant date fair value and records compensation expense on a straight-line basis over the vesting period of the award.
The Company recorded stock-based compensation expense in the following expense categories of its accompanying consolidated statements of operations and comprehensive loss for the three months ended March 31, 2020 and 2019, respectively (amounts in thousands):
Three Months Ended
March 31,
20202019
Research and development
$300  $423  
General and administrative780  516  
Total
$1,080  $939  
Stock options
Options issued may have a contractual life of up to 10 years and may be exercisable in cash or as otherwise determined by the Board. Vesting generally occurs over a period of not greater than four years.
The following table summarizes the activity related to stock option grants to employees and nonemployees for the three months ended March 31, 2020:
Shares
Weighted
average
exercise price
per share		Weighted-average
remaining
contractual
life (years)
Outstanding at December 31, 20192,498,606  $17.18  7.7
Granted857,875  7.72  
Forfeited(15,749) 14.65  
Outstanding at March 31, 20203,340,732  $14.76  8.0
Vested and exercisable at March 31, 20201,230,674  $23.08  5.8
Vested and expected to vest at March 31, 20203,340,732  $14.76  8.0
As of March 31, 2020, the unrecognized compensation cost related to 2,110,058 unvested stock options expected to vest was $12.5 million. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 3.0 years. There were no options exercised during the three months ended March 31, 2020. The aggregate intrinsic value of options outstanding and options exercisable as of March 31, 2020 was $0.6 million and $0.6 million, respectively. The options granted during the three months ended March 31, 2020 had an estimated weighted-average grant date fair value of $5.21. There were 705,133 options granted during the three months ended March 31, 2019 at an estimated weighted-average fair value of $6.45. The grant date fair value of each option grant was estimated during the three months ended March 31, 2020 and 2019 using the following assumptions within the Black-Scholes option-pricing model:
Three Months Ended
March 31, 2020		Three Months Ended
March 31, 2019
Expected term (in years)6.086.05
Expected volatility78 %80 %
Risk-free interest rate1.36 %2.55 %
Expected dividend yield0 %0 %
At the time of the Alizé acquisition, Alizé had 6,219 nonemployee (BSA) warrants and 5,360 employee (BSPCE) warrants outstanding, which have weighted-average exercise prices of €80.06 and €83.40, respectively. As of March 31, 2020, all BSA and BSPCE warrants were vested. During the three months ended March 31, 2020, 910 BSPCE warrants were exercised
resulting in the issuance of 12,307 shares of the Company’s common stock. In addition, during the three months ended March 31, 2020, a total of 1,836 BSA and BSPCE warrants were forfeited. As of March 31, 2020, there were an aggregate of 58,415 shares of common stock issuable upon the exercise of the BSA and BSPCE warrants with a weighted-average exercise price of $7.02 per share. These instruments are included in the equity attributable to noncontrolling interests.