Net Income (Loss) per Share

9 Months Ended

Sep. 30, 2020

Note 9. Net Income (Loss) per Share

Basic net income (loss) per share is calculated based on the weighted-average number of shares of the Company’s common stock during the period. Diluted net income (loss) per share is calculated based on the weighted-average number of shares of the Company’s common stock and other dilutive securities outstanding during the period. The potentially dilutive shares of the Company’s common stock resulting from the assumed exercise of outstanding stock options and equivalents were determined under the treasury stock method.

The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except share and per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Numerator:
Net income (loss)	$	1,822		$	(22,352	)	$	(71,005	)	$	(68,112	)
Denominator:
Weighted-average common shares outstanding		64,132,283			45,787,137			53,452,007			45,253,176
Less: weighted-average common shares subject to vesting		(1,533,090	)		(1,847,856	)		(1,599,760	)		(1,503,022	)
Weighted-average common shares used to compute basic net income (loss) per share		62,599,193			43,939,281			51,852,247			43,750,154
Dilutive effect of stock options		2,538,926			-			-			-
Dilutive effect of ESPP		7,588			-			-			-
Weighted-average common shares used to compute diluted net income (loss) per share		65,145,707			43,939,281			51,852,247			43,750,154
Net income (loss) per share: basic	$	0.03		$	(0.51	)	$	(1.37	)	$	(1.56	)
Net income (loss) per share: diluted	$	0.03		$	(0.51	)	$	(1.37	)	$	(1.56	)

The following outstanding potentially dilutive securities were excluded from the computation of diluted net income (loss) per share because including them would have been antidilutive:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Common stock options issued and outstanding		1,518,386		4,274,163		7,841,220		4,274,163
Unvested restricted common stock issued as part of collaboration agreement		1,257,651		1,257,651		1,257,651		1,257,651
Unvested early exercised common stock options		-		552,364		240,977		552,364
Restricted stock units issued		653,950		-		653,950		-
Employee Stock Purchase Plan shares		12,966		-		79,848		-
Total		3,442,953		6,084,178		10,073,646		6,084,178

The Company also excluded the effect of Gilead’s right to purchase additional shares of the Company’s common stock from its calculation as these rights had no intrinsic value at September 30, 2020.