The Company adopted the 2021 Employment Inducement Incentive Award Plan (the "2021 Inducement Plan") in December 2021. The Company initially reserved 1,500,000 shares of the Company’s common stock for issuance pursuant to awards granted under the 2021 Inducement Plan. The terms of the 2021 Inducement Plan are substantially similar to the terms of the Company’s 2018 Incentive Award Plan with the exception that awards may only be made to an employee who has not previously been an employee or member of the board of directors of the Company if the award is in connection with commencement of employment. As of March 31, 2022, 1,083,500 shares were available for future issuance under the 2021 Inducement Plan.

In July 2018, the Company adopted the 2018 Incentive Award Plan (the “2018 Plan”). Under the 2018 Plan, which expires in July 2028, the Company may grant equity-based awards to individuals who are employees, officers, directors or consultants of the Company. Options issued under the 2018 Plan will generally expire ten years from the date of grant and vest over a four-year period. On February 28, 2022, the Company granted restricted stock units under the 2018 Plan to employees. Shares will vest 25% each year with the first 25% considered vested as of March 15, 2023, provided that the employee is in the employment of the Company on such vesting date. As of March 31, 2022, 1,989,166 shares were available for future issuance under the 2018 Plan.

The 2018 Plan contains a provision that allows annual increases in the number of shares available for issuance on the first day of each calendar year through January 1, 2028 in an amount equal to the lesser of: (i) 5% of the aggregate number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding calendar year, or (ii) such lesser amount determined by the Company. Under this evergreen provision, on January 1, 2022, an additional 2,379,911 shares became available for future issuance under the 2018 Plan.

In February 2015, the Company adopted the Crinetics Pharmaceuticals, Inc. 2015 Stock Incentive Plan (the “2015 Plan”), which provided for the issuance of equity awards to the Company’s employees, members of its board of directors and consultants. In general, options issued under this plan vest over four years and expire after 10 years. Subsequent to the adoption of the 2018 Plan, no additional equity awards can be made under the 2015 Plan.

Certain awards under the 2015 Plan allowed for exercise prior to vesting. Shares issued under such early-exercise provisions are subject to repurchase by the Company until they become fully vested. As of March 31, 2022, there were no unvested shares issued under early-exercise provisions subject to repurchase by the Company.

In July 2018, the Company adopted the 2018 Employee Stock Purchase Plan (the “ESPP”). The ESPP permits participants to purchase common stock through payroll deductions of up to 20% of their eligible compensation. As of March 31, 2022, an aggregate of 1,329,090 shares of common stock were available for issuance under the ESPP.

The ESPP contains a provision that allows annual increases in the number of shares available for issuance on the first day of each calendar year through January 1, 2028 in an amount equal to the lesser of: (i) 1% of the aggregate number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding calendar year, or (ii) such lesser amount determined by the Company. Under this evergreen provision, on January 1, 2022, an additional 475,982 shares became available for future issuance under the ESPP.

The Company's offering period begins in May and November of each year and therefore no new offering periods began during the three months ended March 31, 2022.

The Company’s stock option activity during the three months ended March 31, 2022 was as follows:


				Weighted-		Weighted-		Aggregate
				Average		Average		Intrinsic
	Options			Exercise		Remaining		Value
	Outstanding			Price		Term		(000’s)
Balance at December 31, 2021		6,553,594		$	16.07
Granted		1,650,529		$	20.14
Exercised		(203,047	)	$	8.77
Forfeited and expired		(25,650	)	$	15.90
Balance at March 31, 2022		7,975,426		$	17.10		8.3	$	43,369
Vested and expected to vest at March 31, 2022		7,975,426		$	17.10		8.3	$	43,369
Exercisable at March 31, 2022		3,159,840		$	13.85		6.9	$	27,723

Aggregate intrinsic value is calculated as the difference at a specific point in time between the closing price of the Company’s common stock and the exercise price of stock options that had exercise prices below the closing price. The aggregate intrinsic value of options exercised during the three months ended March 31, 2022 was $2.2 million.

The Company’s restricted stock unit activity during the three months ended March 31, 2022 was as follows:


				Weighted-		Aggregate
	Restricted Stock			Average		Fair
	Units			Grant Date		Value
	Outstanding			Fair Value		(000’s)
Balance at December 31, 2021		—			—
Granted		306,194		$	20.02
Vested		—			—
Forfeited		(2,125	)	$	20.02
Balance at March 31, 2022		304,069		$	20.02	$	6,087
Vested and expected to vest at March 31, 2022		304,069		$	20.02	$	6,087
Exercisable at March 31, 2022		—			—		—

The Company utilizes the Black-Scholes option pricing model to value awards under its equity plans. The following table summarizes the weighted average assumptions used to estimate the fair value of stock options granted under the Company’s stock option plans:


Stock Option Awards	2022	2021
Expected option term	6.0 years	6.0 years
Expected volatility	88%	87%
Risk free interest rate	1.8%	0.9%
Expected dividend yield	—%	—%

The weighted-average fair value of stock options awarded during the three months ended March 31, 2022 and 2021 was $14.77 and $11.01 per share, respectively.

The key assumptions used in determining the fair value of equity awards, and the Company’s rationale, were as follows: (i) Expected term - the expected term for options represents the period that options are expected to be outstanding and has been estimated using the simplified method, which is an average of the contractual option term and its vesting period; the expected term for ESPP represents the term the awards are expected to be outstanding; (ii) Expected volatility - the expected volatility assumption is based on volatilities of a peer group of similar companies in the biotechnology industry whose share prices are publicly available; (iii) Risk-free interest rate - the risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant for zero coupon U.S. Treasury notes with maturities that approximate the expected terms of awards; and (iv) Expected dividend yield - the expected dividend yield assumption is zero as the Company has never paid dividends and has no present intention to do so in the future.

Stock-based compensation expense for the equity awards issued by the Company to employees and non-employees for the periods presented below was as follows (in thousands):


	Three months ended March 31,
	2022		2021
Included in research and development	$	3,191	$	1,813
Included in general and administrative		2,564		1,593
Total stock-based compensation expense	$	5,755	$	3,406

As of March 31, 2022, unrecognized stock-based compensation cost related to option awards, restricted stock units, and ESPP was $62.3 million, $6.0 million and $1.9 million, respectively, which is expected to be recognized over a remaining weighted-average period of approximately 2.2 years, 4.0 years and 1.4 years, respectively.