Stock-based compensation

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

11. Stock-based compensation

The 2018 Equity Incentive Plan (the “2018 Plan”), adopted by the board of directors in August 2018 provided for the grant of qualified incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock and restricted stock units to the Company’s employees, officers, directors, advisors, and outside consultants for the issuance or purchase of shares of the Company’s common stock. The maximum number of shares of common stock that were authorized for issuance under the 2018 Plan was 6,885,653.

In June 2021, the Company's board of directors adopted, and the Company's stockholders approved, the 2021 Stock Incentive Plan (the “2021 Plan”), which became effective on June 16, 2021. The 2021 Plan provides for grant of qualified and nonqualified stock options, stock appreciation rights, restricted and unrestricted stock and stock units, performance awards, and other share-based awards to the Company's employees, directors, advisors and outside consultants. The shares reserved for issuance pursuant to the 2021 Plan are subject to an annual increase through January 1, 2031. As of December 31, 2022 the Company had reserved 7,057,629 shares of the Company's common stock for issuance of stock options, restricted stock, and restricted stock units, of which 3,025,807 remained outstanding for future grant under the 2021 Plan. On January 1, 2023, 3,086,541 shares of the Company's common stock were added to the amount reserved for issuance under the 2021 Plan. Upon effectiveness of the 2021 Plan, the Company ceased granting additional awards under the 2018 Plan.

Stock-based compensation expense recorded in the consolidated statements of operations and comprehensive loss is as follows:


	Year ended December 31,
(in thousands)	2022		2021		2020
Research and development	$	12,486	$	3,830	$	494
General and administrative		9,991		3,242		356
Total stock-based compensation expense	$	22,477	$	7,072	$	850

Stock options

The assumptions used in Black-Scholes for stock options granted were as follows:


	Year ended December 31,
	2022			2021			2020
Expected volatility		77.3	%		77.7	%		84.8	%
Weighted-average risk-free interest rate		2.4	%		0.9	%		0.4	%
Expected dividend yield		—			—			—
Expected term (in years)		6.0			6.0			6.0

The following table provides a summary of stock option activity during the year ended December 31, 2022:


	Number of options			Weighted average exercise price per share		Weighted average remaining contractual life (in years)		Aggregate intrinsic value(2) (in thousands)
Outstanding at December 31, 2021		6,119,295		$	9.44
Granted		2,561,300		$	28.49
Exercised		(743,638	)	$	2.92
Forfeited		(324,131	)	$	20.37
Outstanding at December 31, 2022		7,612,826		$	16.10		8.3	$	63,790
Exercisable at December 31, 2022		2,551,841		$	7.52		7.6	$	34,295
Expected to vest after December 31, 2022(1)		5,060,985		$	20.43		8.6	$	29,495

(1)

This represents the number of unvested options outstanding as of December 31, 2022 that are expected to vest in the future.

(2)

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the estimated fair value of the common stock for the options that were in the money as of December 31, 2022.

During the year ended December 31, 2022 the weighted average grant date fair value of the stock options granted was $19.39 per share. The aggregate intrinsic value of stock options exercised during the year ended December 31, 2022 was approximately $21.2 million while the Company received $2.2 million in proceeds for the exercise of these options.

As of December 31, 2022, there was $64.4 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of approximately 2.5 years.

Restricted stock and restricted stock units

In 2018, the Company issued 2,150,537 shares of restricted common stock. The restricted shares vested in 48 equal monthly installments, commencing on January 1, 2018. The restricted shares were fully vested as of December 31, 2021.

During the year ended December 31, 2022, the Company granted 688,700 restricted stock units under the 2021 Plan. These restricted stock units vest in substantially equal installments over a four-year period.

A summary of the status of and change in unvested restricted stock units as of December 31, 2022 was as follows:


	Shares				Weighted- average grant date fair value per share
Unvested restricted stock units as of December 31, 2021		32,000		$		36.58
Restricted stock units granted		688,700		$		22.65
Restricted stock units vested		(6,375	)	$		35.53
Restricted stock units forfeited		(36,500	)	$		24.32
Unvested restricted stock units as of December 31, 2022		677,825		$		23.10

At December 31, 2022, there was $13.6 million of unrecognized stock-based compensation expense related to restricted stock units that are expected to vest. These costs are expected to be recognized over a weighted-average remaining vesting period of 3.5 years.

2021 Amended and Restated Employee Stock Purchase Plan

In June 2021, the board of directors adopted, and the Company's stockholders approved, the 2021 Employee Stock Purchase Plan, or the ESPP, as amended and restated, which became effective on June 16, 2021. The shares reserved for issuance pursuant to the ESPP are subject to an annual increase through January 1, 2031. As of December 31, 2022, 134,107 shares had been purchased by employees under the ESPP and 784,326 shares remained available for issuance under the ESPP. On January 1, 2023, 617,308 shares of common stock were added to the amount reserved for sale under the ESPP.