On July 2, 2014, the stockholders of the Company approved the 2014 Stock Option and Incentive Plan (the “2014 Plan”), which became effective immediately prior to the completion of the Company’s IPO. The 2014 Plan provides for the grant of restricted stock awards, restricted stock units, incentive stock options and non-statutory stock options. The 2014 Plan replaced the Company’s 2011 Stock Option and Grant Plan (the “2011 Plan”). The Company no longer grants stock options or other awards under its 2011 Plan, but any stock options outstanding under the 2011 Plan remain outstanding and effective in accordance with their terms.

The 2014 Plan provides for an annual increase, to be added on the first day of each fiscal year, by up to 4% of the Company’s outstanding shares of common stock as of the last day of the prior year. On January 1, 2022, 2,357,482 shares of common stock, representing 4% of the Company’s outstanding shares of common stock as of December 31, 2021, were added to the 2014 Plan.

On December 15, 2016, the Board of Directors of the Company (the “Board”) approved the 2016 Inducement Equity Plan (as amended and restated, the “2016 Plan”). The 2016 Plan provides for the grant of equity awards to individuals who have not previously been an employee or a non-employee director of the Company to induce them to accept employment and to provide them with a proprietary interest in the Company. On September 20, 2018, the Board amended the 2016 Plan to increase the total number of shares reserved for issuance by 1,200,000 shares.

Terms of equity grants, including vesting requirements, are determined by the Board or the Compensation Committee of the Board, subject to the provisions of the applicable plan. Stock options granted by the Company that are not performance-based are considered time-based because they vest based on the continued service of the grantee with the Company during a specified period following grant. These awards, when granted to employees, generally vest ratably over four years, with 25% vesting at the one-year anniversary. All stock option awards expire 10 years after the date of grant.

As of September 30, 2022, the total number of shares underlying outstanding awards under all equity plans was 9,088,581 and the total number of shares available for future issuance under all equity plans was 7,223,536 shares.

On June 16, 2022, the Company’s stockholders approved an amendment to the amended 2014 Employee Stock Purchase Plan (the “ESPP”), which had been previously approved by the Board, to add 300,000 shares of common stock to the ESPP.

The following table summarizes activity relating to time-based restricted stock units and performance restricted stock units:


	Shares
Outstanding as of December 31, 2021		1,256,098
Granted		569,410
Vested		(351,455	)
Forfeited		(84,796	)
Outstanding as of September 30, 2022		1,389,257

During the three months ended June 30, 2020, the Company granted 550,890 time-based restricted stock units to certain employees of the Company. These time-based restricted stock units vested over two years, with 25% vesting at the one-year anniversary of the grant date and 75% vesting at the two-year anniversary of the grant date, which was in April 2021 and April 2022, respectively. During the three months ended June 30, 2021, 113,941 of these time-based restricted stock units vested, with a fair value equal to $8.8 million. During the three months ended June 30, 2022, 291,505 of these time-based restricted stock units vested, with a fair value equal to $9.5 million.

During the three months ended December 31, 2021, the Company granted 268,119 time-based restricted stock units to certain employees of the Company. These time-based restricted stock units vest over four years, with 25% vesting at the one-year anniversary of the vesting start date, which was in September 2022; and the remaining 75% will vest ratably in quarterly increments over the remaining three years. During the three months ended September 30, 2022, 59,950 of these time-based restricted stock units vested, with a fair value equal to $2.3 million.

During the three months ended March 31, 2022 and 2021, and the three months ended September 30, 2021, no time-based restricted stock units vested.

During the nine months ended September 30, 2022 and 2021, the Company granted no time-based restricted stock units.

During the three months ended September 30, 2022 and 2021, the Company granted 57,480 and 47,040 performance restricted stock units, respectively, to its employees and consultants. During the nine months ended September 30, 2022 and 2021, the Company granted 569,410 and 420,161 performance restricted stock units, respectively, to its employees and consultants. The performance restricted stock units granted during the nine months ended September 30, 2022 are related to the achievement of certain clinical and regulatory development milestones related to product candidates and commercial milestones.

Recognition of stock-based compensation expense associated with performance restricted stock units commences when the performance condition is considered probable of achievement, using management’s best estimates, which consider the inherent risk and uncertainty regarding the future outcomes of the milestones.

During the three months ended June 30, 2021, one milestone for outstanding performance restricted stock units was achieved, and the fair value of the performance restricted stock units that vested upon achievement was $6.1 million. 39% of the performance restricted stock units that were granted during the year ended December 31, 2020 included this milestone as a vesting condition. No performance restricted stock units vested during the nine months ended September 30, 2022 and the three months ended March 31, 2021 and September 30, 2021.

During the three months ended September 30, 2021, the Company considered probable the achievement of a specific clinical milestone which was the criteria for vesting of certain performance restricted stock units but which had not been met as of September 30, 2021. Therefore, $12.6 million of stock-based compensation expense was recognized related to these awards for the three months ended September 30, 2021. Performance restricted stock units with this milestone were granted during the years ended December 31, 2020 and 2019.

As of September 30, 2022, for performance-based restricted stock units that were outstanding, the achievement of the milestones that had not been met was considered not probable, and therefore no expense has been recognized related to these awards during the nine months ended September 30, 2022.

At September 30, 2022, 179,676 time-based restricted stock units were both outstanding and unvested, and the total unrecognized stock-based compensation expense related to these awards was $5.5 million.

At September 30, 2022, 1,209,581 performance restricted stock units were both outstanding and unvested, and the total unrecognized stock-based compensation expense related to these awards was $69.5 million.

The following table summarizes activity related to time-based and performance-based stock options:


	Shares			Weighted Average Exercise Price		Weighted Average Remaining Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2021		7,283,439		$	84.17		6.74	$	16,590
Granted		1,008,027		$	39.59
Exercised		(149,083	)	$	6.73
Forfeited		(443,059	)	$	94.18
Outstanding as of September 30, 2022		7,699,324		$	79.26		6.53	$	8,606
Exercisable as of September 30, 2022		4,953,687		$	85.77		5.39	$	6,584

At September 30, 2022, the Company had unrecognized stock-based compensation expense related to its unvested time-based stock option awards of $70.5 million, which is expected to be recognized over the remaining weighted average vesting period of 2.73 years.

The intrinsic value of stock options exercised during the nine months ended September 30, 2022 and 2021 was $4.4 million and $8.0 million, respectively.

Recognition of stock-based compensation expense associated with performance-based stock options commences when the performance condition is considered probable of achievement, using management’s best estimates, which consider the inherent risk and uncertainty regarding the future outcomes of the milestones.

As of September 30, 2022 and 2021, for performance-based stock option grants that were outstanding, the achievement of the milestones that had not been met was considered not probable, and therefore no expense has been recognized related to these awards during the nine months ended September 30, 2022 and 2021, respectively.

During the three months ended March 31, 2021, in connection with the hiring of its chief executive officer, the Company granted to its chief executive officer 650,000 stock options to purchase shares of common stock that contain performance-based vesting criteria, such that the shares underlying such stock options which will vest upon the achievement of certain regulatory and commercial milestones.

During the nine months ended September 30, 2022, and the three months ended June 30, 2021 and September 30, 2021, the Company granted no stock options to employees to purchase shares of common stock that contain performance-based vesting criteria.

During the nine months ended September 30, 2022 and 2021, no milestones were achieved under performance-based stock options granted to employees.

As of September 30, 2022, 681,451 performance-based stock options were both outstanding and unvested, the total unrecognized stock-based compensation expense related to these awards was $11.8 million and the timing of recognition of this stock-based compensation expense is subject to judgment of the Company as to when the performance conditions are considered probable of being achieved.

The following table summarizes stock-based compensation expense recognized during the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands)
Research and development	$	5,964	$	17,864	$	21,037	$	40,598
Selling, general and administrative		7,205		16,478		25,321		43,383
	$	13,169	$	34,342	$	46,358	$	83,981

The following table summarizes stock-based compensation expense by award type recognized during the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(in thousands)
Stock options	$	11,992	$	19,516	$	40,659	$	60,740
Restricted stock units		730		14,563		4,982		22,538
Employee stock purchase plan		447		263		717		703
	$	13,169	$	34,342	$	46,358	$	83,981

The weighted average grant date fair value per share of stock options granted under the Company’s stock option plans during the nine months ended September 30, 2022 and 2021 was $25.96 and $53.42, respectively.