Share-Based Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

9. Share-Based Compensation

2020 Employee Share Purchase Plan

In June 2020, the Company’s board of directors adopted, and the Company’s shareholders approved the 2020 Employee Share Purchase Plan (“ESPP”). The number of shares reserved and available for issuance under the ESPP will automatically increase each January 1, beginning on January 1, 2021 and each January 1 thereafter through January 31, 2030, by the lesser of (1) 1.0% of the total number of common shares outstanding on December 31 of the preceding calendar year, (2) 3,300,000 common shares, or (3) such smaller number of common shares as the Company’s board of directors may designate.

The Company issued 60,618 common shares under the ESPP for the six months ended June 30, 2024, at a weighted-average price per share of $5.91, for aggregate proceeds of $0.4 million.

As of June 30, 2024, the number of common shares that may be issued under the ESPP is 1,772,568.

2020 Equity Inventive Plan

In June 2020, the Company’s board of directors adopted, and the Company’s shareholders approved the 2020 Equity Incentive Plan (the ”2020 Plan”). The 2020 Plan became effective on the effective date of the IPO, at which time the Company ceased making awards under the Option Plan. The 2020 Plan allows the Company’s compensation committee to make equity-based and cash-based incentive awards to the Company’s officers, employees, directors and consultants including but not limited to stock options and restricted share units. The aggregate number of common shares reserved and available for issuance under the 2020 Plan has automatically increased on January 1 of each year beginning on January 1, 2021 and will continue to increase on January 1 of each year through and including January 1, 2030, by 5% of the outstanding number of common shares on the immediately preceding December 31, or such lesser number of shares as determined by the Company’s board of directors.

As of June 30, 2024, the number of common shares reserved for issuance under the 2020 Plan is 12,144,106.

Inducement Plan

In April 2024, the Company’s board of directors approved the adoption of the 2024 Inducement Plan (the “Inducement Plan”), to be used exclusively for grants of awards to individuals who were not previously employees or directors (or following a bona fide period of non-employment) as a material inducement to such individuals’ entry into employment with the Company, pursuant to Nasdaq Listing Rule 5635(c)(4). The terms and conditions of the Inducement Plan are substantially similar to those of the 2020 Plan. 350,000 common shares have been reserved for issuance under the Inducement Plan.

Stock Options

The following table summarizes the Company’s stock options activity:


	Number of shares			Weighted average exercise price
Outstanding, January 1, 2024		10,097,771		$	13.77
Granted		1,621,082		$	6.48
Exercised		(8,612	)	$	1.99
Cancelled or forfeited		(421,652	)	$	14.02
Outstanding, June 30, 2024		11,288,589		$	12.72

The fair value of stock options, and the assumptions used in the Black Scholes option-pricing model to determine the grant date fair value of stock options granted to employees and non-employees were as follows, presented on a weighted average basis:


	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023

Fair value of stock options	$	2.67		$	7.08		$	4.72		$	8.33
Risk-free interest rate		4.30	%		3.75	%		4.21	%		3.68	%
Expected terms (in years)		5.33			5.81			5.97			6.00
Expected volatility		83.57	%		80.78	%		83.08	%		81.48	%
Expected dividend yield		0.00	%		0.00	%		0.00	%		0.00	%

Restricted Share Units

The following table summarizes the Company’s restricted share unit activity:


	Number of shares			Weighted average grant date fair value
Outstanding, January 1, 2024		603,685		$	12.42
Awarded		527,273		$	6.95
Vested and released		(200,262	)	$	12.42
Forfeited		(59,633	)	$	11.34
Outstanding, June 30, 2024		871,063		$	9.18

The fair value of each restricted share unit is estimated on the date of grant based on the fair value of our common shares on that same date.

Share-Based Compensation

Share-based compensation expense for all awards was allocated as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in thousands)
Research and development	$	3,694	$	3,329	$	7,113	$	6,548
General and administrative		2,825		2,936		5,881		5,779
Total share-based compensation expense	$	6,519	$	6,265	$	12,994	$	12,327

Share-based compensation expense by type of award was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in thousands)
Stock options	$	5,605	$	5,561	$	11,290	$	11,098
Restricted share units		803		620		1,512		1,045
ESPP		111		84		192		184
Total share-based compensation expense	$	6,519	$	6,265	$	12,994	$	12,327

As of June 30, 2024, there was $31.3 million and $6.7 million of unrecognized share-based compensation expense to be recognized over a weighted average period of 1.4 years and 2.2 years related to unvested stock options and unvested restricted share units, respectively.