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Stock-Based Awards
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Stock-Based Awards Stock-Based Awards
2017 Equity Incentive Plan
The Company's 2017 Stock Option and Incentive Plan (the 2017 Plan) provides for the grant of equity-based incentive awards. The number of shares initially reserved for issuance of awards under the 2017 Plan was 2,655,831 shares of common stock and may be increased by the number of shares under the 2015 Equity Incentive Plan (the 2015 Plan) and the 2017 Plan that are forfeited, cancelled, repurchased by the Company, or otherwise surrendered. The 2017 Plan provides that the number of shares reserved and available for issuance under the plan will automatically increase each January 1, beginning on January 1, 2018, by 4% of the outstanding number of shares of our common stock on the immediately preceding December 31, or such lesser number of shares as determined by the Compensation Committee of the Company's Board of Directors. As of December 31, 2021, 615,131 remained available for issuance under the 2017 Plan. The number of shares reserved for issuance under the 2017 Plan was increased by 2,341,985 shares effective January 1, 2022.
Inducement Plan
In January 2022, the Company adopted the Inducement Plan pursuant to which the Company reserved 800,000 shares of common stock to be used exclusively for grants of equity-based awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Marketplace Rules of the Nasdaq Stock Market, Inc. The Inducement Plan provides for the grant of equity-based awards in the form of nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, unrestricted stock awards, and dividend equivalent rights. The Inducement Plan was adopted by the
Company without stockholder approval pursuant to Rule 5635(c)(4) of the Marketplace Rules of the Nasdaq Stock Market, Inc. To date, there have been no grants made pursuant to the Inducement Plan.
2015 Equity Incentive Plan
Under the 2015 Plan the Company was authorized to sell or issue common shares or restricted common shares, or to grant options for the purchase of common shares, share appreciation rights, and other awards, to employees, members of the board of directors, consultants, and advisors of the Company. Upon effectiveness of the 2017 Plan no further awards were available to be issued under the 2015 Plan.
Both the 2017 and 2015 Plans provide that they be administered by the board of directors or, at the discretion of the board of directors, by a committee of the board of directors. The exercise prices for stock options may not be less than 100% of the fair market value of the common stock on the date of grant and the term of awards may not be greater than ten years. The Company bases fair value of common stock on the quoted market price. Vesting periods are determined at the discretion of the board of directors. Awards granted to employees and directors typically vest over four years.
2017 Employee Stock Purchase Plan
The 2017 Employee Stock Purchase Plan (the ESPP) initially reserved and authorized the issuance of up to 306,750 shares of common stock to participating employees. The ESPP provides that the number of shares reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2018 and each January 1 thereafter through January 1, 2027, by the least of (i) 1% of the outstanding number of shares of common stock on the immediately preceding December 31; (ii) 400,000; shares or (iii) such number of shares as determined by the ESPP administrator. As of December 31, 2021, 1,681,188 remained available for issuance under the ESPP Plan. The number of shares reserved for issuance under the ESPP was increased by 400,000 shares effective January 1, 2022.
The purchase price of common stock under the ESPP is equal to 85% of the lesser of (i) the fair market value per share of the common stock on the first business day of an offering period and (ii) the fair market value per share of the common stock on the purchase date. The fair value of the discounted purchases made under the ESPP is calculated using the Black-Scholes option-pricing model, which is described in further detail within the "Stock Option Valuation" section below, on the date of the first day of the offering period. The fair value of the look-back provision plus the 15% discount is recognized as stock-based compensation expense in the consolidated statements of operations and comprehensive loss over the 6-month purchase period. Employees began participating in the ESPP program during the first offering period of the ESPP program in the second quarter of 2020. There were 90,947 and 37,298 shares of common stock issued under the ESPP during the years ended December 31, 2021 and 2020, respectively.
Stock Option Valuation
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option-pricing model, which uses as inputs the fair value of the Company's common stock and assumptions for the volatility of its common stock, the expected term of stock-based awards, the risk-free interest rate for a period that approximates the expected term of stock-based awards, and the expected dividend yield. Prior to October 2017, the Company was privately-held and lacked company-specific historical and implied volatility information. Therefore, it estimates its expected share volatility based on the historical volatility of a set of publicly traded peer companies as well as the limited historical volatility of its own traded stock price. The Company estimated the expected term of its options using the "simplified" method for awards that qualify as "plain-vanilla" options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends on common shares and does not expect to pay any cash dividends in the foreseeable future.
The assumptions that the Company used to determine the fair value of options granted to employees and directors were as follows, presented on a weighted average basis:
Year Ended December 31,
202120202019
Risk-free interest rate1.0 %1.2 %2.2 %
Expected term (in years)5.86.16.2
Expected volatility77.8 %77.2 %74.5 %
Expected dividend yield0 %0 %0 %
The following table summarizes the Company's option activity from January 1, 2021 to December 31, 2021:
Number of SharesWeighted Average Exercise PriceWeighted Average Remaining Contractual Term
(in years)		Aggregate Intrinsic Value
(in thousands)
Outstanding as of December 31, 20205,712,339 $29.53 
Granted2,877,170 $26.80 
Exercised(577,605)$8.17 
Forfeited/Expired(572,396)$40.49 
Outstanding as of December 31, 20217,439,508 $29.28 7.86$3,891 
Options vested and expected to vest as of December 31, 20217,439,508 $29.28 7.86$3,891 
Options exercisable as of December 31, 20213,599,498 $29.06 6.65$3,103 
The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of the Company's common shares for those options that had exercise prices lower than the fair value of the Company's common shares. The aggregate intrinsic value of options exercised during the years ended December 31, 2021, 2020, and 2019 was $15.7 million, $86.0 million, and $53.2 million, respectively.
The weighted average grant-date fair value per share of options granted during the years ended December 31, 2021, 2020, and 2019 was $17.95, $36.71, and $19.22, respectively.
Restricted Stock Units
The 2017 Plan provides for the award of restricted stock units. During the years ended December 31, 2021, 2020, and 2019, the Company granted restricted stock units to employees that were subject to time-based vesting conditions that lapse between one year and four years from date of grant, assuming continued employment.
From time to time, the Company may grant restricted stock units that are subject to performance-based vesting conditions. The Company granted no performance-based restricted units in 2021 or 2020. As of December 31, 2021 and 2020, there were no unvested performance-based restricted units.
All restricted stock units currently granted have been classified as equity instruments as their terms require settlement in shares. Restricted stock units with time-based and performance-based vesting conditions are valued on the grant date using the grant date market price of the underlying shares.
The table below summarizes the Company's time-based restricted stock unit activity from January 1, 2021 to December 31, 2021:
Number
of Shares		Weighted
Average
Grant Date
Fair Value
Unvested at December 31, 2020438,625 $49.28 
Granted1,341,899 $31.12 
Vested(112,854)$48.48 
Forfeited(129,938)$46.95 
Unvested at December 31, 20211,537,732 $33.68 
The fair value of time-based restricted stock units that vested during the years ended December 31, 2021, 2020, and 2019 were $4.7 million, $2.3 million, and $0.5 million respectively.
Stock-Based Compensation Expense
Stock-based compensation expense was classified in the statements of operations and comprehensive loss as follows:
 Year Ended December 31,
(in thousands)202120202019
Research and development$20,698 $17,443 $7,934 
Selling, general, and administrative25,380 19,694 12,476 
Total stock-based compensation$46,078 $37,137 $20,410 
The following table summarizes share-based compensation expense associated with each of our share-based compensation arrangements:
Year Ended December 31,
(in thousands)202120202019
Stock options$36,263 $29,925 $19,328 
Time-based restricted stock units9,047 4,424 1,082 
Performance-based restricted stock units— 1,907 — 
Employee stock purchase plan768 881 — 
Total stock-based compensation expense$46,078 $37,137 $20,410 
As of December 31, 2021, total unrecognized compensation cost related to the unvested share-based awards was $101.1 million, which is expected to be recognized over a weighted average of 2.1 years.
During the year ended December 31, 2020, the Company recorded $1.9 million of stock-based compensation expense related to a vesting event associated with performance-based restricted stock units that became probable and was achieved during the second quarter of 2020. These expenses were classified as research and development expenses within the consolidated statements of operations and comprehensive loss.