Stock-based compensation

12 Months Ended

Dec. 31, 2024

Stock-based compensation

Stock-based compensation

11. Stock-based compensation

2014 Stock Option and Grant Plan

In January 2014, the Company adopted the 2014 Stock Option and Grant Plan (the “2014 Plan”), under which it could grant incentive stock options, non-qualified stock options, restricted stock awards, unrestricted stock awards, or restricted stock units to purchase up to 823,529 shares of common stock to employees, officers, directors and consultants of the Company.

The terms of stock option agreements, including vesting requirements, were determined by the board of directors and were subject to the provisions of the 2014 Plan. Restricted stock awards granted by the Company generally vest based on each grantee’s continued service with the Company during a specified period following grant. Stock options granted to employees generally vest over four years, with 25% vesting on the one year anniversary and 75% vesting ratably, on a monthly basis, over the remaining three years. Stock options granted to non-employee consultants generally vest monthly over a period of one to four years.

2015 Stock Option Plan

In October 2015, the Company’s board of directors and stockholders approved the 2015 Stock Option and Incentive Plan (“2015 Stock Option Plan”), which became effective upon the completion of the Company’s initial public offering (“IPO”). The 2015 Stock Option Plan provides the Company with the flexibility to use various equity-based incentive and other awards as compensation tools to motivate its workforce. These tools include stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, performance share awards and cash-based awards. The 2015 Stock Option Plan replaced the 2014 Plan. Any options or awards outstanding under the 2014 Plan remained outstanding and effective. The number of shares initially reserved for issuance under the 2015 Stock Option Plan is the sum of (a) 1,311,812 shares of common stock and (b) the number of shares under the 2014 Plan that are not needed to fulfill the Company’s obligations for awards issued under the 2014 Plan as a result of forfeiture, expiration, cancellation, termination or net issuances of awards thereunder. The number of shares of common stock that may be issued under the 2015 Stock Option Plan is also subject to increase on the first day of each fiscal year by up to 4% of the Company’s issued and outstanding shares of common stock on the immediately preceding December 31.

Effective January 1, 2016, and every anniversary thereafter an additional 4% of outstanding common stock was added to the Company’s 2015 Stock Option Plan pursuant to its “evergreen” provision, for future issuance. This has accumulated to a total of 14,717,369 shares through January 1, 2025. During the year ended December 31, 2024, the Company granted options to purchase 1,921,326 shares of common stock to employees and directors under the 2015 Stock Option Plan. As of December 31, 2024, there were 3,765,132 shares available for future issuance under the 2015 Stock Option Plan.

2015 Employee Stock Purchase Plan

In October 2015, the Company’s board of directors and stockholders approved the 2015 Employee Stock Purchase Plan (the “2015 ESPP”). Under the 2015 ESPP, all full-time employees of the Company are eligible to purchase common stock of the Company twice per year, at the end of each six-month payment period. During each

payment period, eligible employees who so elect, may authorize payroll deductions in an amount of 1% to 10% (whole percentages only) of the employee’s base pay for each payroll period. At the end of each payment period, the accumulated deductions are used to purchase shares of common stock from the Company at a discount. A total of 262,362 shares of common stock were initially authorized for issuance under this plan.

Effective January 1, 2016, and every anniversary thereafter an additional 1% of outstanding common stock was added to the 2015 ESPP, pursuant to its evergreen provision, for future issuance. This has accumulated to a total of 3,132,873 shares through January 1, 2025. The Company issued 148,069 and 111,639 shares of common stock under the 2015 ESPP in the years ended December 31, 2024, and 2023. As of December 31, 2024, there were 2,010,897 shares available for future purchase under the 2015 ESPP.

Inducement Awards

In the years ended December 31, 2024, 2023 and, 2022, the Company issued non-statutory stock options to purchase an aggregate of 486,000, 573,000, and 390,000 shares of the Company’s common stock and restricted stock unit awards for an aggregate of 223,000, 318,500, and 163,000 shares of the Company’s common stock, respectively, in each case outside of the Company’s 2015 Stock Option Plan as an inducement material to certain individuals’ acceptance of an offer of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4).

The stock options will vest over a four-year period, with 25% of the shares underlying the option award vesting on the first anniversary of the award and the remaining 75% of the shares underlying the award vesting monthly thereafter over the subsequent 36-month period. The restricted stock units vest over a three-year period, with 33% of the restricted stock units vesting on the first anniversary of the award, 33% of the restricted stock units vesting on the second anniversary, and the remaining restricted stock units vesting on the third anniversary.

Stock-based Compensation Expense

Total compensation cost recognized for all stock-based compensation awards in the statements of operations and comprehensive (loss) income is as follows:

	Year ended December 31,
	2024		2023		2022
	(in thousands)
General and administrative	$	8,746	$	7,568	$	6,398
Research and development		6,039		3,585		2,946
Total stock-based compensation expense	$	14,785	$	11,153	$	9,344

Stock-based compensation expense by type of award included within the consolidated statements of operations and comprehensive (loss) income was as follows:

	Year ended December 31,
	2024		2023		2022
	(in thousands)
Stock options	$	9,727	$	7,627	$	5,938
Restricted stock awards and units		4,734		3,241		3,215
Employee stock purchase plan awards		323		285		191
Total stock-based compensation expense	$	14,785	$	11,153	$	9,344

Restricted Stock Units

A summary of the status of and changes in unvested restricted stock unit activity under the Company’s equity award plans for the year ended December 31, 2024, was as follows:

		Weighted
		Average
		Grant Date
		Fair Value
	Units	Per Unit
Unvested restricted stock units as of December 31, 2023	1,370,897	$	6.65
Awarded	1,010,208	$	7.83
Vested	(515,303)	$	6.42
Forfeited	(215,859)	$	6.67
Unvested restricted stock units as of December 31, 2024	1,649,943	$	7.44

Stock-based compensation of restricted stock units is based on the fair value of the Company’s common stock on the date of grant and is recognized over the vesting period. In the year ended December 31, 2024, the Company granted 1,010,208 restricted stock units vesting in equal amounts, annually over three years.

As of December 31, 2024, the Company had unrecognized stock-based compensation expense related to its unvested restricted stock units of $8.6 million which is expected to be recognized over the remaining weighted average vesting period of 1.5 years.

Stock Options

A summary of the status of, and changes in, stock options was as follows:

		Weighted		Remaining	Aggregate
		Average		Contractual	Intrinsic
		Exercise		Life	Value
	Shares	Price		(in years)	(in thousands)
Outstanding at December 31, 2023	7,425,444	$	8.52
Granted	2,407,326	$	7.75
Exercised	(106,831)	$	4.49
Cancelled or forfeited	(925,475)	$	10.98
Outstanding at December 31, 2024	8,800,464	$	8.10	7.3		3,462
Exercisable at December 31, 2024	4,837,929	$	8.45	6.4	$	2,732

Using the Black-Scholes option pricing model, the weighted average fair value of options granted during the years ended December 31, 2024, 2023, and 2022, was $5.45, $6.12, and $3.60, respectively.

The fair value of each option was estimated at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

	Year ended December 31,
	2024		2023		2022
Risk-free interest rate	4.1	%	4.0	%	2.2	%
Expected dividend yield	—	%	—	%	—	%
Expected term (in years)	6.0		6.0		6.0
Expected volatility	76.3	%	80.4	%	79.4	%

As of December 31, 2024, the Company had unrecognized stock-based compensation expense related to its unvested stock options of $18.0 million which is expected to be recognized over the remaining weighted average vesting period of 2.8 years.