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Share-based compensation
 12 Months Ended
Dec. 31, 2021
Share-based compensation [Abstract]  
Share-based compensation
18.
Share-based compensation


Share-based option awards


Through the year ended December 31, 2021, there are equity-based instruments outstanding that the Company has granted under four different plans.


The Company’s 2016 Share Option and Incentive Plan (SOIP) was approved by the shareholders at the ordinary shareholders’ meeting in November 2016. The 2016 Plan authorizes the grant of incentive and non-qualified share options, share appreciation rights, restricted share awards, restricted share units, unrestricted share awards, performance share awards, performance-based awards to covered employees and dividend equivalent rights. The Company only grants equity-based instruments from the SOIP as of December 31, 2021.


The following table summarizes equity-settled share option grants for plans that existed during the period:

PLAN
  
Number of
options awarded
(since inception)
  
 
Vesting conditions
  
 
Contractual
life of options
Share option plan C1
    
6,775,250
  
4 years’ service from grant date
  
10 years
2016 SOIP:
                
Executives and directors
    
2,643,984
  
1 year, 3 year and 4 years’ service from the date of grant, quarterly and annually
  
10 years
Employees
    
1,354,431
  
4 years’ service from the date of grant, annually
  
10 years


The number and weighted-average exercise prices (in CHF) of options under the share option programs for Plans C1 and the 2016 SOIP are as follows:

   
Number of
options
    
Weighted-
average
exercise
price (CHF)
    
Weighted-
average
remaining
term (years)
  
Outstanding at January 1, 2019
    
1,618,856
      
4.25
      
6.3
  
Forfeited during the year
    
(73,699
)
    
6.71
      
—
  
Exercised during the year
    
(616,833
)
    
0.15
      
—
  
Granted during the year
    
1,053,305
      
5.24
      
—
  
Outstanding at December 31, 2019
    
1,981,629
      
5.93
      
8.3
  
Exercisable at December 31, 2019
    
602,218
      
4.94
      
6.5
  
Outstanding at January 1, 2020
    
1,981,629
      
5.93
      
8.3
  
Forfeited during the year
    
(53,591
)
    
6.03
      
—
  
Expired during the year     (26,729 )     4.38
       —
  
Exercised during the year
    
(73,669
)
    
2.00
      
—
  
Granted during the year
    
1,073,027
      
6.29
      
—
  
Outstanding at December 31, 2020
    
2,900,667
      
5.90
      
8.2
  
Exercisable at December 31, 2020
    
1,099,015
      
5.49
      
7.0
  
Outstanding at January 1, 2021
    
2,900,667
      
5.90
      
8.2
  
Forfeited during the year
    
(207,331
)
    
6.13
      
—
  
Exercised during the year
    
(218,561
)
    
4.97
      
—
  
Granted during the year
    
1,110,914
      
6.34
      
—
  
Outstanding at December 31, 2021
    
3,585,689
      
6.21
      
7.8
  
Exercisable at December 31, 2021
    
1,613,242
      
6.13
      
6.8
  


The outstanding stock options as of December 31, 2021 have the following range of exercise prices:

   
Total options
    
Range of
expiration
dates
  
Range of exercise prices
            
CHF 0.15
    
208,125
      
2022–2026
  
CHF 9.53
    
223,646
      
2027
  
USD 5.04 to USD 12.30
    
3,153,918
      
2028–2031
  
Total outstanding options
    
3,585,689
          


The weighted-average exercise price for options granted in 2021, 2020 and 2019 is USD 6.95 (CHF 6.34), USD 7.11 (CHF 6.29) and USD 5.41 (CHF 5.24), respectively. The range of exercise prices for outstanding options was CHF 0.15 to CHF 9.53 for awards previously granted in CHF (prior to 2018) and USD 5.04 to USD 12.30 for awards granted in USD as of December 31, 2021.


Prior to the IPO, the exercise price was set by the board of directors. The volatility is based on the historical trend of an appropriate sample of companies operating in the pharmaceutical and biopharmaceutical industries. The risk-free interest rate is based on the CHF swap rate for the expected life of the option. The weighted-average share price of common share options exercised in 2021 is USD 7.26 (CHF 6.62).




The weighted-average grant date fair values of the options granted in 2021, 2020 and 2019 are USD 5.23 (CHF 4.78), USD 5.25 (CHF 4.65) and USD 3.71 (CHF 3.59), respectively. The following table illustrates the weighted-average assumptions for the Black-Scholes option-pricing model used in determining the fair value of these awards:

   
For the Years Ended
December 31,
  
   
2021
    
2020
    
2019
  
Exercise price (USD)
  
 5.31-7.72
    
 5.04-9.16
    
 5.15-5.54
  
Share price (weighted average)
    
6.95
      
7.11
      
5.41
  
Risk-free interest rate
    
0
  %    
0
  %    
0
  %
Expected volatility
    
80
%
    
80
%
    
80
%
Expected term (in years)
  
5.1-6
   
5.5-6
   
5.5-6
 
Dividend yield
    
—
      
—
      
—
  


Restricted share awards


A summary of non-vested share awards (restricted share and restricted share units) activity as of December 31, 2021 and changes during the year then ended is presented below:

Grantee type
  
Number of
non-vested
share
awards
granted
  
 
Vesting conditions
  
Contractual
life of non-
vested
share
awards
Restricted share units
              
Directors
    
83,864
  
1 year service from date of grant, annually
  
10 years
Executives
    
110,839
  
4 years’ service from the date of grant, quarterly
  
10 years

   
Number of
non-vested
shares
    
Weighted-
average
grant date fair
value (CHF)
  
Non-vested at January 1, 2019
    
109,041
      
9.51
  
Forfeited during the year
    
—
      
—
  
Granted during the year
    
—
      
—
  
Vested during the year
    
(66,278
)
    
9.51
  
Non-vested at December 31, 2019
    
42,763
      
9.52
  
Vested and exercisable at December 31, 2019
    
130,290
      
9.58
  
Non-vested at December 31, 2019
    
42,763
      
9.52
  
Forfeited during the year
    
(11,828
)
    
9.47
  
Expired during the year
     (7,804 )     9.52  
Exercised during the year     (84,638 )     9.51
  
Granted during the year
    
—
      
—
  
Vested during the year
    
(23,269
)
    
9.52
  
Non-vested at December 31, 2020
    
19,494
      
9.51
  
Vested and exercisable at December 31, 2020
    
49,289
      
9.47
  
Non-vested at December 31, 2020
    
19,494
      
9.51
  
Exercised during the year
    
(2,471
)
    
9.46
  
Vested during the year
    
(18,697
)
    
9.52
  
Non-vested at December 31, 2021
    
797
      
9.41
  
Vested and exercisable at December 31, 2021
    
65,515
      
9.48
  


The Company did not grant restricted share awards in 2021, 2020 or 2019, respectively. The weighted-average grant date fair values of the remaining non-vested share awards as of the respective year end (restricted shares and restricted share units) was CHF 9.41, CHF 9.51 and CHF 9.52 for the years ended December 31, 2021, 2020 and 2019, respectively. These fair values of non-vested share awards granted have been determined using a reasonable estimate of market value of the common shares on the date of the award.


The expense charged against the income statement was CHF 4.1 million, CHF 4.1 million and CHF 2.8 million for the years ended December 31, 2021, 2020 and 2019, respectively. The expense is revised by the Company based on the number of instruments that are expected to become exercisable.