Stock-based Compensation

6 Months Ended

Jun. 30, 2020

Disclosure Text Block

Stock-based Compensation

11. Stock-based compensation

2015 Stock Option and Incentive Plan

In 2015, the Company’s board of directors and stockholders approved the 2015 Stock Option and Incentive Plan (the 2015 Plan), which replaced the Company’s 2011 Stock Option and Grant Plan, as amended (the 2011 Plan). The 2015 Plan includes incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, performance share awards and cash-based awards. The Company initially reserved a total of 1,460,084 shares of common stock for the issuance of awards under the 2015 Plan. The 2015 Plan provides that the number of shares reserved and available for issuance under the 2015 Plan will be cumulatively increased on January 1 of each calendar year by 4% of the number of shares of common stock issued and outstanding on the immediately preceding December 31 or such lesser amount as specified by the compensation committee of the board of directors. For the calendar year beginning January 1, 2020, the number of shares reserved for issuance under the 2015 Plan was increased by 1,970,888 shares. In addition, the total number of shares reserved for issuance is subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. As of June 30, 2020, there were 2,453,214 shares available for future grant under the 2015 Plan.

Stock options

The following table summarizes the stock option activity for the six months ended June 30, 2020:

		Weighted-Average
	Shares		Exercise Price
Outstanding at December 31, 2019	5,795,710	$	58.82
Granted	1,296,203		58.40
Exercised	(208,510)		18.93
Canceled	(222,413)		77.27
Outstanding at June 30, 2020	6,660,990	$	59.37
Exercisable at June 30, 2020	3,136,170	$	46.60

As of June 30, 2020, the total unrecognized compensation expense related to unvested stock option awards was $138.8 million, which is expected to be recognized over a weighted-average period of approximately 2.84 years.

Restricted stock units

The following table summarizes the restricted stock units activity for the six months ended June 30, 2020:

		Weighted-Average
		Grant Date
	Shares	Fair Value
Unvested shares at December 31, 2019	419,755	$	82.50
Granted	853,895		56.46
Vested	(76,606)		85.95
Forfeited	(45,633)		69.62
Unvested shares at June 30, 2020	1,151,411	$	63.47

As of June 30, 2020, the total unrecognized compensation expense related to unvested restricted stock units was $65.6 million, which is expected to be recognize over a weighted-average period of approximately 3.41 years.

2020 Inducement Plan

In March 2020, the Company’s board of directors adopted the 2020 Inducement Plan (the Inducement Plan), pursuant to which the Company may grant, subject to the terms of the Inducement Plan and Nasdaq rules, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock units, and other stock-based awards. The Company initially reserved a total of 1,000,000 shares of common stock for the issuance of awards under the Inducement Plan. The number of shares reserved and available for issuance under the Inducement Plan can be increased at any time with the approval of the Company’s board of directors. The Inducement Plan permits the board of directors or a committee thereof to use the stock-based awards available under the Inducement Plan to attract key employees for the growth of the Company. As of June 30, 2020, there were 68,726 shares issued under the Inducement Plan.

2015 Employee Stock Purchase Plan

In 2015, the Company’s board of directors and stockholders approved the 2015 Employee Stock Purchase Plan (the 2015 ESPP), which became effective upon the closing of the Company’s initial public offering in May 2015. The Company initially reserved a total of 243,347 shares of common stock for issuance under the 2015 ESPP. The 2015 ESPP provides that the number of shares reserved and available for issuance under the 2015 ESPP will be cumulatively increased on January 1 of each calendar year by 1% of the number of shares of common stock issued and outstanding on the immediately preceding December 31 or such lesser amount as specified by the compensation committee of the board of directors. For the calendar year beginning January 1, 2020, the number of shares reserved for issuance under the 2015 ESPP was increased by 492,722 shares. The Company issued 17,018 and 10,718 shares under the 2015 ESPP during the six months ended June 30, 2020 and 2019, respectively.

Stock-based compensation expense

The Company recognized stock-based compensation expense totaling $19.5 million and $36.4 million for the three and six months ended June 30, 2020, respectively. Stock-based compensation expense by award type included within the unaudited condensed consolidated statements of operations and comprehensive loss was as follows (in thousands):

	Three Months Ended				Six Months Ended
		June 30,				June 30,
		2020		2019		2020		2019
Stock options	$	14,629	$	12,016	$	28,344	$	21,595
Restricted stock units		4,844		1,544		7,998		2,168
Employee stock purchase plan		202		106		359		198
Subtotal		19,675		13,666		36,701		23,961
Capitalized stock-based compensation costs		(147)		—		(314)		—
Stock-based compensation expense included in total cost and operating expenses	$	19,528	$	13,666	$	36,387	$	23,961

Stock-based compensation expense by classification within the unaudited condensed consolidated statements of operations and comprehensive loss is as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Research and development	$	8,709	$	7,503	$	16,507	$	13,293
Selling, general and administrative		10,819		6,163		19,880		10,668
Total		19,528		13,666		36,387		23,961