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. In 2022, the Company amended the 2021 Inducement Plan to increase the number of shares of the Company’s common stock available for future issuance under the 2021 Inducement Plan to 5,000,000 shares. As of March 31, 2023, 2,127,434 shares of common stock were available for future issuance under the 2021 Inducement Plan.

The Company adopted the 2018 Incentive Award Plan (the “2018 Plan”) in July 2018. 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. As of March 31, 2023, 2,640,238 shares of common stock 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, 2023, an additional 2,693,859 shares became available for future issuance under the 2018 Plan.

The Company adopted the 2015 Stock Incentive Plan (the “2015 Plan”) in February 2015, 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.

The Company adopted the 2018 Employee Stock Purchase Plan (the “ESPP”) in July 2018. The ESPP permits participants to purchase common stock through payroll deductions of up to 20% of their eligible compensation. As of March 31, 2023, 1,739,226 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, 2023, an additional 538,771 shares became available for future issuance under the ESPP.

Activity under the Company’s stock option plans during the three months ended March 31, 2023 was as follows:


				Weighted-		Weighted-		Aggregate
				Average		Average		Intrinsic
	Options			Exercise		Remaining		Value
	Outstanding			Price		Term		(000’s)
Balance at December 31, 2022		9,757,329		$	17.79
Granted		2,171,590		$	19.27
Exercised		(31,810	)	$	15.21
Forfeited and expired		(359,995	)	$	21.73
Balance at March 31, 2023		11,537,114		$	17.95		8.2	$	14,260
Vested and expected to vest at March 31, 2023		11,537,114		$	17.95		8.2	$	14,260
Exercisable at March 31, 2023		4,514,770		$	16.24		6.8	$	13,495

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, 2023 and 2022 was $0.1 million and $2.2 million, respectively.

The total fair value of options vested during the three months ended March 31, 2023 and 2022 was $8.7 million and $4.0 million, respectively.

The Company’s restricted stock unit activity during the three months ended March 31, 2023 was as follows:


				Weighted-
	Restricted Stock			Average
	Units			Grant Date
	Outstanding			Fair Value
Balance at December 31, 2022		290,311		$	19.88
Granted		604,621		$	19.64
Vested		(81,294	)	$	19.54
Forfeited		(7,238	)	$	19.84
Balance at March 31, 2023		806,400		$	19.74

The Company estimates the fair value of all stock option grants and ESPP using the Black-Scholes option pricing model and recognizes forfeitures as they occur. 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 for the periods presented below:

There were no ESPP grants during the three months ended March 31, 2023 and 2022.

The weighted-average fair value of stock options awarded was $12.29 and $14.77 per share during the three months ended March 31, 2023 and 2022, 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 stock options represents the period that the stock 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 awards granted under the ESPP represents the term the awards are expected to be outstanding; (ii) Expected volatility - during 2022, the expected volatility assumption was based on volatilities of a peer group of similar companies in the biotechnology industry whose share prices are publicly available. The Company computed the historical volatility data using the daily closing prices for the selected companies’ shares during the period equivalent to the expected term of the Company’s stock-based awards. Beginning in 2023, the

Company determined that the volatility of its own market-traded shares best represents the expected volatility based on available historical data and, therefore, the expected volatility assumption for stock-based awards granted during the three months ended March 31, 2023 is based on the historical volatility of the Company's common stock; (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,
	2023		2022
Included in research and development	$	4,678	$	3,191
Included in general and administrative		3,418		2,564
Total stock-based compensation expense	$	8,096	$	5,755

As of March 31, 2023, unrecognized stock-based compensation cost related to option awards, restricted stock units, and ESPP was $88.9 million, $15.6 million and 2.5 million, respectively, which is expected to be recognized over a remaining weighted-average period of approximately 2.3 years, 3.7 years and 1.5 years, respectively.