Stock-Based Compensation

6 Months Ended

Jun. 30, 2021

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

8. Stock-Based Compensation

We have three stock-based compensation plans – the Amended and Restated 2017 Inducement Equity Plan, or 2017 Inducement Plan, the Amended and Restated 2015 Stock Option and Incentive Plan, or 2015 Plan, and the 2012 Stock Option and Grant Plan, or 2012 Plan. As of June 30, 2021, there were 2,006,772 shares reserved under the 2017 Inducement Plan and 4,964,617 shares reserved under the 2015 Plan for the future issuance of equity awards. Upon adoption of the 2015 Plan in July 2015, no new awards or grants are permitted under the 2012 Plan. See Note 10 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2020, for additional information related to these stock-based compensation plans.

Stock Options

The following summarizes option activity under the 2017 Inducement Plan, 2015 Plan and 2012 Plan:

	Number of Options			Weighted- Average Exercise Price
Outstanding — December 31, 2020		3,327,330		$	42.07
Options granted		658,480			43.57
Options exercised		(76,338	)		19.82
Options canceled		(170,068	)		52.52
Outstanding — June 30, 2021		3,739,404		$	42.32

 

The fair values of stock options granted to employees were calculated using the following assumptions:

	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2020	2021	2020
Expected term (in years)	5.3-6.1	5.1-6.1	5.3-6.1	5.1-6.1
Volatility	68.1%-72.2%	71.0%-71.8%	68.1%-72.7%	69.6%-71.8%
Risk-free interest rate	1.0%-1.1%	0.4%	0.9%-1.1%	0.4%-1.8%
Dividend yield	—	—	—	—

Restricted Stock Units

The following table summarizes activity of restricted stock units, or RSUs, granted to employees with service-based vesting under the 2017 Inducement Plan and 2015 Plan and related information:

	Number of RSUs			Weighted- Average Grant Date Fair Value
Non-vested units — December 31, 2020		2,210,356		$	57.80
RSUs granted		1,409,417			44.28
RSUs vested		(379,635	)		55.06
RSUs forfeited		(302,565	)		53.34
Non-vested units — June 30, 2021		2,937,573		$	52.13

Market-Condition Awards Granted to Employees

Market-Condition RSU Awards

Beginning in June 2020, the Compensation Committee of our Board of Directors has granted awards of RSUs to certain of our senior management, including our executive officers, under the 2015 Plan, the vesting of which is contingent upon the achievement of three escalating stock price targets, which we refer to as the Market-Condition RSU Awards. Since June 1, 2020, certain awards have been forfeited in connection with employee terminations and new awards have been granted in connection with new appointments, respectively, with awards for up to an aggregate of 414,700 RSUs outstanding as of June 30, 2021. Upon the achievement of the respective stock price targets, 50% of the RSUs allotted to that tranche will vest, while the remaining 50% will vest on the first anniversary of the date the stock price target was achieved, subject to the employee’s continued employment or other service relationship with us through such vesting date. Under the terms of the awards, if the stock price targets are not achieved for all or some of the tranches on or before June 30, 2024, the unvested awards will be automatically terminated and forfeited. The compensation cost for the RSUs with a market condition is not reversed when the market condition is not satisfied. The target prices and vesting tranches are set forth in the table below:

Stock Price Targets		Number of Units Allowed
	$ 109.20		82,940
	$ 145.60		145,145
	$ 182.00		186,615

The grant date fair value of the Market-Condition RSU Awards was estimated using a Monte Carlo simulation model, which includes variables such as the expected volatility of the Company’s share price and interest rates to generate potential future outcomes. We recognize the related compensation expense on a straight-line basis over the applicable derived service periods, which are the estimated periods of time that would be required to satisfy the market conditions.

The following table summarizes the Market-Condition RSU Awards granted and forfeited during the six months ended June 30, 2021:

	Number of RSUs			Weighted- Average Grant Date Fair Value		Weighted- Average Remaining Vesting Period (years)		Aggregate Intrinsic Value
Non-vested market-condition awards — December 31, 2020		414,700		$	49.95		1.21
Granted		42,400			13.80		2.23
Forfeited		(42,400	)		49.95		0.71
Non-vested market-condition awards — June 30, 2021		414,700		$	46.26		0.76	$	14,523

The following table summarizes the assumptions used to estimate the fair value of the Market-Condition RSU Awards as of the grant date:

Valuation date stock price	$	37.20
Expected term		3.1 years
Volatility		66.6	%
Risk-free interest rate		0.3	%
Dividend yield		—

At June 30, 2021, total unrecognized compensation expense related to non-vested Market-Condition RSU Awards was $7.1 million, which is expected to be recognized over their respective remaining derived service periods. The weighted average remaining derived service period is 0.76 years. For the three months and six months ended June 30, 2021, we recognized $1.5 million and $4.6 million, respectively, in stock-based compensation expense related to the Market-Condition RSU Awards. 

Stock-Based Compensation Expense

Total stock-based compensation recognized by function included in the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Research and development	$	4,906	$	3,430	$	10,216	$	8,780
Selling, general and administrative		15,064		13,141		30,134		24,158
Total stock-based compensation expense	$	19,970	$	16,571	$	40,350	$	32,938