The Company has maintained a stock incentive plan for the issuance of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, other stock awards and performance cash awards, to employees, non-employee directors, and consultants. The Company also has an employee stock purchase plan (“ESPP”) for its employees.

The fair value of stock options granted to employees was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2024	2023	2024	2023
Expected term of options (in years)	6.1	6.1	5.5 - 6.1	5.5 - 6.1
Expected stock price volatility	89.9% - 90.4%	99.9% - 100.9%	89.2% - 91.8%	99.6% - 101.5%
Risk-free interest rate	3.5% - 4.1%	4.0% - 4.4%	3.5% - 4.6%	3.4% - 4.4%
Expected dividend yield	—	—	—	—

The valuation assumptions for stock options were determined as follows:

•Expected Term — The expected term represents the period that the stock options granted are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term).

•Expected Volatility — Expected volatility is determined by using a blended approach of the Company and certain industry peers’ historical volatilities.

•Risk-Free Interest Rate — The Company based the risk-free interest rate over the expected term of the stock options based on the constant maturity rate of U.S. Treasury securities with similar maturities as of the date of the grant.

•Expected Dividend Rate — The expected dividend is zero as the Company has not paid nor does it anticipate paying any dividends on its profit interest units in the foreseeable future.

Stock-based compensation is recognized on a straight-line basis over the requisite service period, which is generally the vesting period. The following table sets forth the total stock-based compensation expense for all awards granted to employees and non-employees and the ESPP in the unaudited condensed consolidated statements of operations (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Research and development	$	8,931	$	15,819	$	35,610	$	46,284
Selling, general and administrative	7,766		11,125		27,006		36,760
Total stock-based compensation	$	16,697	$	26,944	$	62,616	$	83,044