Equity-Based Compensation

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

(8)

Equity-Based Compensation

Market-based restricted stock units ("RSUs")

In June 2022, the Company entered into an agreement to grant market-based RSUs to its Chief Executive Officer. For equity awards with a market-based vesting condition, the Company recognizes compensation expense over the requisite service period using the fair value at the grant date. The number of shares issuable, if any, when a market-based RSU award vests, will depend on the degree of achievement of the corporate stock price metrics within the performance period of the award.

The Company measures the fair value of market-based RSUs on the date of grant using a Monte Carlo simulation model. The Monte Carlo simulation requires the input of assumptions, including the Company's stock price, the volatility of its stock price, remaining term in years, expected dividend yield and risk-free rate. The Company used its own trading history to calculate the expected volatility of the market-based RSUs granted. The risk-free interest rate is determined by reference to implied yields available from U.S. Treasury securities with a remaining term equal to the expected term assumed at the grant date.

The following table details the assumptions used in the Monte Carlo simulation model used to estimate the fair value of the market-based RSUs granted:


	Three Months Ended June 30, 2022
Stock price	$	12.98
Volatility		82.5	%
Remaining term (years)		2.7
Risk-free rate		2.9	%
Expected dividend yield		0.0	%

The Company recorded equity-based compensation in the following expense categories in the consolidated statements of operations and comprehensive income (loss):


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Research and development	$	4,379	$	2,293	$	7,039	$	3,862
General and administrative		4,229		1,872		8,134		3,811
Total equity-based compensation	$	8,608	$	4,165	$	15,173	$	7,673