Share-Based Compensation

3 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

The Company has two share-based compensation plans, the Myovant Sciences Ltd. 2020 Inducement Plan and the Myovant Sciences Ltd. 2016 Equity Incentive Plan (collectively, the “Equity Plans”).

(A) 2020 Inducement Plan

In November 2020, the compensation committee of the Company’s board of directors adopted the Myovant Sciences Ltd. 2020 Inducement Plan (the “2020 Inducement Plan”), which, subject to the adjustment provisions thereof, reserved 1.0 million shares of the Company’s common shares for issuance. The 2020 Inducement Plan was adopted without shareholder approval pursuant to the Listed Company Manual Rule 303A.08 (“Rule 303A.08”) of the New York Stock Exchange (the “NYSE”). The 2020 Inducement Plan provides for the grant of restricted stock units and non-qualified stock options, and contains terms and conditions intended to comply with the inducement award exception under the NYSE rules. In accordance with Rule 303A.08, awards under the 2020 Inducement Plan may only be made to individuals not previously employees of the Company, or being rehired following a bona fide period of interruption of employment, as an inducement material to such individuals’ entering into employment with the Company. An award is a right to receive the Company’s common shares pursuant to the 2020 Inducement Plan pursuant to a restricted stock unit award or a non-qualified stock option award. As of June 30, 2021, there were less than 0.1 million common shares available for future issuance under the 2020 Inducement Plan.

(B) 2016 Equity Incentive Plan

In June 2016, the Company adopted its 2016 Equity Incentive Plan, as amended (the “2016 Plan”), under which 4.5 million common shares were originally reserved for issuance. Pursuant to the “evergreen” provision contained in the 2016 Plan, the number of common shares reserved for issuance under the 2016 Plan automatically increases on April 1 of each year, commencing on (and including) April 1, 2017 and ending on (and including) April 1, 2026, in an amount equal to 4% of the total number of shares of the Company’s capital stock outstanding on March 31 of the preceding fiscal year, or a lesser number of shares as determined by the Company’s board of directors. On April 1, 2021, the number of common shares authorized for issuance under the 2016 Plan increased automatically by 3.6 million shares in accordance with the evergreen provision. As of June 30, 2021, a total of 2.4 million common shares were available for future issuance under the 2016 Plan.

The Company’s employees, directors, officers and consultants are eligible to receive non-qualified and incentive stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and other share awards under the 2016 Plan.

Activity for stock options for the three months ended June 30, 2021 is as follows:


			Number of Options








Options outstanding at March 31, 2021			8,293,331
Granted			892,157
Exercised			(436,573)
Forfeited			(135,909)
Options outstanding at June 30, 2021			8,613,006
Options vested and expected to vest at June 30, 2021			8,613,006
Options exercisable at June 30, 2021			5,308,419

(D) Restricted Stock and Performance Stock Units

Activity for restricted stock units and performance stock units for the three months ended June 30, 2021 is as follows:


			Number of Shares








Unvested balance at March 31, 2021			3,571,235
Granted			2,343,086
Vested			(540,760)
Forfeited			(238,678)
Unvested balance at June 30, 2021			5,134,883
Vested and unreleased			35,559
Outstanding balance at June 30, 2021			5,170,442

(E) Share-Based Compensation

Share-based compensation was as follows (in thousands):


	Three Months Ended June 30,
	2021		2020
Share-based compensation recognized as:
R&D expense	$	3,957	$	4,024
SG&A expense	7,155		3,788
Capitalized under inventory	150		—
Total	$	11,262	$	7,812

Total unrecognized share-based compensation was approximately $102.2 million as of June 30, 2021 and is expected to be recognized over a weighted-average period of approximately 3.3 years.

(F) Separation Agreement with Former Principal Executive Officer

In January 2021, the Company entered into a Separation and General Release Agreement with its former Principal Executive Officer. Pursuant to the terms of this agreement, all of the former Principal Executive Officer’s then outstanding and unvested equity awards became fully vested. In addition, the post-termination period during which the former Principal Executive Officer may exercise her outstanding stock options was extended to 12 months. The former Principal Executive Officer has granted Sumitovant or any Sumitovant affiliate a right of first refusal to purchase her common shares of the Company under certain circumstances and provide the Company and its affiliates a general release of claims. Share-based compensation included in SG&A expense for the three months ended June 30, 2021 includes $1.4 million related to the settlement and remeasurement of these awards.

As a result of the repurchase feature described above, the outstanding awards were reclassified from additional paid-in capital to current liabilities. The share-based compensation liabilities have been and will continue to be remeasured at fair value each

reporting period end, with the change in fair value recorded as share-based compensation within SG&A until the stock options are exercised and the common shares are sold to Sumitovant, to the market, or otherwise settled, or the former Principal Executive Officer has held the common shares for a period of at least six months. As of June 30, 2021, a total of 1,081,803 outstanding stock options and a total of 462,705 common shares remain subject to the right of first refusal. The former Principal Executive Officer’s outstanding stock options remain exercisable through January 11, 2022. As of June 30, 2021 and March 31, 2021, $21.2 million and $21.6 million, respectively, is included in share-based compensation liabilities on the unaudited condensed consolidated balance sheets.