Stock-Based Compensation

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Stock Incentive Plan

The Company has a stock incentive plan, the Immunomedics, Inc. 2014 Long-Term Incentive Plan (the “Plan”). The Plan was established to promote the long-term financial interests and growth of the Company, by attracting and retaining management and other personnel and key service providers with the training, experience and ability to enable them to make a substantial contribution to the success of the Company's business. The Plan is designed to motivate management personnel by means of growth-related incentives to achieve long-range goals and further the alignment of interests with those of the stockholders of the Company through opportunities for increased stock or stock-based ownership in the Company. Toward these objectives, the Company may grant stock options, stock appreciation rights, stock awards, stock units, performance shares, performance options, performance units, and other stock-based awards to eligible individuals on the terms and subject to the conditions set forth in the Plan. There have been no significant modifications to the Plan during the year ended December 31, 2019, the Transition Period or fiscal years ended June 30, 2018, or 2017.

Stock-based compensation expense was $11.7 million, $0.9 million, $4.0 million, and $4.3 million for the year ended December 31, 2019, the Transition Period, and fiscal years ended June 30, 2018 and 2017, respectively. On January 15, 2019, the Company received a final award finding from an arbitrator that denied Dr. Goldenberg 1.5 million of RSU's. As a result, during the Transition Period, $3.4 million of the stock-based compensation expense was reversed. Refer to "Note 14 - Commitments and Contingencies" for more information.

Stock Options

Stock option grants provide the right to purchase a specified number of shares of Common Stock from the Company at a specified price during a specified period of time. The stock option exercise price per share is the fair market value of one share of Common Stock on the date of the grant of the stock option and generally have a vesting period of four years.

As of December 31, 2019, there was $40.6 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the plan. That cost is being recognized over a weighted-average period of 3 years.

The weighted average grant date fair value of the stock options granted during the year ended December 31, 2019, the Transition Period, and fiscal years ended June 30, 2018, and 2017 was $8.81 per share, $12.90 per share, $8.76 per share, and $2.21 per share, respectively. The weighted average grant date fair value of the performance-based stock options granted during the year ended December 31, 2019, the Transition Period, and fiscal years ended June 30, 2018, and 2017 was $9.50, $0.00, $7.29 and $0.00 per share, respectively. There were no performance-based stock options granted during the Transition Period, or for the fiscal year ended June 30, 2017.

We estimated the fair value of options granted using a Black-Scholes option pricing model with the following assumptions:

	Year Ended December 31, 2019	Transition Period December 31, 2018	Fiscal Years Ended June 30,
			2018	2017
Expected dividend yield	—%	—%	—%	—%
Expected option term (years)	4.52	4.76	4.84	5.04
Expected stock price volatility	71%	69%	70%	63%
Risk-free interest rate	1.39% - 2.58%	2.69% - 3.06%	1.72% - 2.89%	1.16% - 2.15%

The following table summarizes all stock option activity for the ended December 31, 2019:

	Options (in thousands)		Weighted Average Exercise Price Per Option		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Options outstanding, January 1, 2019	4,757		$	14.30	5.42	$	18,618
Changes during the year:
Granted	3,614		15.46
Exercised	(1,207	)	3.17
Expired or forfeited	(1,263	)	17.78
Options outstanding, end of year	5,901		$	16.54	5.90	$	30,145
Vested as of December 31, 2019	1,150		$	14.72	4.61	$	8,276

The following table summarizes all stock option activity for the Transition Period ended December 31, 2018:

	Options (in thousands)		Weighted Average Exercise Price Per Option		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Options outstanding, July 1, 2018	3,549		$	7.58	4.43	$	57,123
Changes during the year:
Granted	2,002		22.54
Exercised	(706	)	3.71
Expired or forfeited	(88	)	15.57
Options outstanding, end of year	4,757		$	14.30	5.42	$	18,618
Vested as of December 31, 2018	1,504		$	4.23	3.41	$	15,098

The total fair value of shares vested during the year ended December 31, 2019, the Transition Period, and fiscal years ended June 30, 2018, and 2017 was $8.9 million, $1.3 million, $0.3 million, and $1.4 million, respectively. The total intrinsic value of stock options exercised during the fiscal year ended December 31, 2019, the Transition Period, and fiscal years ended June 30, 2018, and 2017 was $14.7 million, $13.3 million, $7.8 million, and $2.6 million, respectively.    

Restricted Stock Units ("RSU's")

The Company may grant awards of RSU's to eligible individuals. An RSU represents a contractual obligation by the Company to deliver a number of shares of Common Stock equal to the fair market value of the specified number of shares subject to the award, or a combination of shares of Common Stock and cash. Vesting requirements may include performance goals, the attainment of performance goals with continued service, or both.

Information regarding the Company's RSU's for the year ended December 31, 2019 is as follows:

Non-Vested Restricted Stock Units	Share Equivalent (in thousands)		Weighted Average Grant Date Fair Value
Non-vested at January 1, 2019	15		$	14.29
Changes during the period:
Restricted Units Granted	58		12.93
Vested/Exercised	(15	)	14.29
Forfeited	—		—
Non-vested at December 31, 2019	58		$	12.93

As of the year ended December 31, 2019, there was $0.3 million of total unrecognized compensation costs related to the awards. The cost is being recognized over a weighted-average period of 0.4 years.

Information regarding the Company's RSU's for the Transition Period ended December 31, 2018 is as follows:

Non-Vested Restricted Stock Units	Share Equivalent (in thousands)		Weighted Average Grant Date Fair Value
Non-vested at July 1, 2018	1,535		$	2.83
Changes during the period:
Restricted Units Granted	15		14.29
Vested/Exercised	(35	)	8.46
Forfeited	(1,500	)	2.28
Non-vested at December 31, 2018	15		$	14.29

As of December 31, 2018, there was $0.3 million of total unrecognized compensation costs related to the awards. The cost was being recognized over a weighted-average period of 1.18 years. During the Transition Period, the Company received a final award finding from an arbitrator that denied Dr. Goldenberg 1.5 million of RSU's that are included as forfeited in the table above. Refer to "Note 14 - Commitments and Contingencies" for more information.

Performance Stock Options ("PSO's")

The Company may grant awards of PSO's to eligible individuals. PSO's are shares of Common Stock that vest based on performance measured against predetermined objectives that could include performance goals, continued employment, or a combination of both over a specified performance period. PSO's may be settled in shares of Common Stock, cash, or both as determined on the settlement date.

On March 14, 2019, performance stock options were granted to certain individuals that vest upon the Company’s receipt of approval from the FDA for the Company’s BLA for sacituzumab govitecan for the treatment of patients with metastatic triple-negative breast cancer who have received at least two prior therapies for metastatic disease under the Prescription Drug User Fee Act. There were additional stock options that were granted to certain eligible individuals that vest on the second anniversary of the date of grant. In addition, on April 17, 2019 performance stock options were granted to certain individuals that vest upon achievement of defined sales performance milestones.

The following table summarizes the Company's performance-based stock option activity for the year ended December 31, 2019 is as follows: 

	Options (in thousands)		Weighted Average Exercise Price Per Option		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Options outstanding, January 1, 2019	538		$	13.09	6.04	$	772
Changes during the year:
Granted	800		17.18
Exercised	—		—
Expired or forfeited	(501	)	13.05
Options outstanding, end of year	837		$	17.03	6.26	$	3,456
Vested as of December 31, 2019	50		$	18.74	6.88	$	121

The total fair value of shares vested during the year ended December 31, 2019 was $1.1 million. As of the year ended December 31, 2019, there was $4.9 million of total unrecognized compensation costs related to the awards. The cost is being recognized over a remaining weighted-average period of 0.8 years.

The following table summarizes the Company's performance-based stock option activity for the Transition Period ended December 31, 2018 is as follows: 

	Options (in thousands)	Weighted Average Exercise Price Per Option		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Options outstanding, July 1, 2018	538	$	13.09	6.54	$	5,688
Changes during the year:
Granted	—	—
Exercised	—	—
Expired or forfeited	—	—
Options outstanding, end of year	538	$	13.09	6.04	$	772
Vested as of December 31, 2018	38	$	11.86	5.94	$	91

As of December 31, 2018, there was $3.0 million of total unrecognized compensation costs related to the awards. The cost was being recognized over a remaining weighted-average period of 3.05. There were no performance stock options granted during the Transition Period.