In June 2013, the Company’s stockholders approved the 2013 Employee Stock Purchase Plan (the “2013 ESPP”) which authorized 0.3 million shares of common stock available to be issued. In June 2016, 2019 and 2023, the Company’s stockholders approved an additional 0.3 million, 0.5 million and 0.3 million shares, respectively, of common stock available for issuance under the 2013 ESPP. As of December 31, 2024, 0.2 million shares of common stock remain available for future grant under the 2013 ESPP.

In June 2018, the Company’s stockholders approved the 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan, which authorized 2.9 million shares of common stock to be issued, allows for the grant of stock options, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), RSUs, performance shares and performance units. In June 2020, June 2022 and June 2023, an additional 3.8 million, 2.5 million and 2.5 million shares of common stock, respectively, were approved by the Company’s stockholders and added to the 2018 Plan. As of December 31, 2024, together with the roll-over shares from the Company’s 2011 Equity Incentive Plan, 3.4 million shares of common stock remain available for future grant under the 2018 Plan.

In March 2024, the Company initiated the 2024 Employment Commencement Incentive Plan (the “2024 Plan”). The 2024 Plan, which authorized 0.6 million shares of common stock to be issued, allows for the grant of stock options, SARs, RSAs, RSUs, performance shares and performance units. In June 2024, there was an addition of 0.5 million shares to the 2024 Plan. As of December 31, 2024, 1.0 million shares of common stock remain available for future grant under the 2024 Plan.

In general, stock options have a ten-year term and vest over a four-year period, with one-fourth of the underlying shares vesting on the first anniversary of the grant and 1/48th of the underlying shares vesting monthly thereafter, such that the underlying shares will be fully vested on the fourth anniversary of the grant, subject to the terms of the applicable plan under which they were granted.

The fair values of stock options granted during the periods presented are measured on the date of grant using the Black-Scholes-Merton option-pricing model, with the following assumptions:


	For the Year Ended December 31,
	2024	2023	2022
Risk-free interest rate (1)	3.5 - 4.4%	3.5 - 4.9%	1.6 - 4.2%
Expected dividend yield (2)	—	—	—
Expected term (3)	5.81 years	5.23 years	5.09 years
Expected volatility (4)	40.8 - 53.5%	46.8 - 63.2%	52.4 - 72.9%

(1)

The risk-free interest rate is estimated using an average of Treasury bill interest rates over a historical period commensurate with the expected term of the option that correlates to the prevailing interest rates at the time of grant.

(2)

The expected dividend yield is zero as the Company has not paid any dividends to date and does not expect to pay dividends in the future.

(3)

The expected term is estimated using historical exercise behavior.

(4)

The expected volatility is the implied volatility in exchange-traded options of the Company’s common stock.

The amounts estimated according to the Black-Scholes-Merton option-pricing model may not be indicative of the actual values realized upon the exercise of these options by the holders.

The following table summarizes the Company’s stock option activity for the period indicated:


	For the Year Ended December 31, 2024
				Weighted-Average
	Shares			Exercise Price
Grants outstanding at beginning of the period		9,582,695		$	78.57
Granted		331,920			128.89
Exercised		(850,117	)		79.33
Cancelled and forfeited		(180,026	)		122.38
Grants outstanding at end of the period		8,884,472		$	79.49

Grants exercisable at end of the period		6,267,957		$	77.66
Grants vested and expected to vest at end of the period		8,726,976		$	78.66

The weighted-average grant date fair value per share of stock options granted during the years ended December 31, 2024, 2023 and 2022 was $67.31, $70.94 and $48.82, respectively.


			Weighted-Average
	Aggregate		Remaining
	Intrinsic Value		Contractual
	(in thousands)		Life (Years)
Options outstanding at December 31, 2024	$	425,039		4.8
Options exercisable at December 31, 2024	$	307,232		4.4
Options vested and expected to vest at December 31, 2024	$	423,367		4.7

The following table summarizes the Company’s shares vested and stock options exercised for each of the periods indicated:


	For the Year Ended December 31,
	2024		2023		2022
	(in thousands)
Aggregate grant date fair value of shares vested	$	147,631	$	142,692	$	140,889
Aggregate intrinsic value of stock options exercised	$	57,158	$	29,711	$	12,150

In June 2017, the Company granted its CEO 3,300,000 options with service and market conditions which were subject to a five-year cliff vesting schedule. On April 19, 2022 (the “Effective Date”), the Company entered into an agreement with its CEO to modify the vesting conditions of the options (the “Amendment”). Under the Amendment, one-third of the options vested (the “Vested Tranche”) on the Effective Date with no required service or market conditions. Subject to the CEO's continued service through each applicable vesting date and the compound annual growth rate of the Company's common stock exceeding that of the Nasdaq Biotech Index in varying percentages, the remaining two-thirds of the options (the “Unvested Tranche”) shall vest in varying increments at any time between the Effective Date and June 26, 2025 (the “Measurement Period”) when (and if) the average of the closing price of the Company’s common stock during any consecutive 20 trading day period during the Measurement Period reaches certain pre-determined target stock prices. Additionally, the CEO is subject to a one-year post-exercise restriction to sell, transfer or dispose shares acquired upon the exercise of any options that vest after deduction of any shares withheld or sold to pay the applicable aggregate exercise price and/or withholding taxes. The aggregate incremental cost of the modification of the CEO's awards was $123.3 million.

During both years ended December 31, 2023 and 2022, respectively, 550,110 options relating to the Unvested Tranche became vested as they met the conditions for vesting and, accordingly, all previously unrecognized expense associated with these options was immediately recognized. For the years ended December 31, 2023 and 2022, the Company recorded $13.4 million and $109.9 million as stock-based compensation expense relating to the CEO’s awards, respectively. As of December 31, 2023, the Unvested Tranche was fully expensed.

Excluding the options with market and service conditions granted to the Company’s CEO, the remaining stock options granted during the periods presented in the table have only service-based criteria and vest over four years.

The Company grants RSUs to members of its board of directors and employees. The following table summarizes the Company’s RSU activity for the period indicated:


	For the Year Ended December 31, 2024
					Weighted-Average
					Grant Date
	Shares				Fair Value
Grants outstanding at beginning of the period		2,240,504		(1)	$	120.17
Granted		1,409,347		(2)		129.31
Vested		(734,922	)			107.93
Forfeited		(197,515	)			126.19
Grants outstanding at end of the period		2,717,414			$	127.78

(1) Included in RSUs outstanding at the beginning of the year ended December 31, 2024 are 33,000 shares of PSUs (the “March 2022 PSU”) with performance conditions related to regulatory approval of certain of the Company's product candidates and 485,275 shares of PSUs (the “March 2023 PSU”) with performance conditions related to regulatory approval of certain of the Company's product candidates and the achievement of a certain financial performance target.

(2) Included in RSUs granted during the year ended December 31, 2024 are 97,460 shares with performance conditions (the “March 2024 PSU”), which are related to the achievement of certain financial performance targets and regulatory approval of certain of the Company's product candidates and 24,500 shares of the March 2023 PSU, which are related to the achievement of a certain financial performance target.

Stock options and the remaining RSUs granted during the year ended December 31, 2024 have only service-based criteria and vest over four years.

As of December 31, 2024, the following PSUs became vested or eligible for vesting:

•

March 2022 PSU: The expanded regulatory approval of ELEVIDYS in June 2024 resulted in 33,000 shares becoming eligible for vesting, which is contingent on the fulfillment of remaining service conditions.

•

March 2023 PSU: The achievement of a certain financial performance target during the year ended December 31, 2024 resulted in 24,500 shares becoming eligible for vesting, which is contingent on the fulfillment of remaining service conditions.

•

March 2024 PSU: The expanded regulatory approval of ELEVIDYS in June 2024 resulted in the cliff-vesting of 44,300 of the 97,460 shares of the March 2024 PSU during the year ended December 31, 2024.

As of December 31, 2024, none of the remaining performance conditions associated with the March 2022 PSU and March 2024 PSU were probable of being achieved.

The weighted-average grant date fair value of RSUs granted during the years ended December 31, 2023 and 2022 was $151.20 and $85.39, respectively. The fair values of RSUs vested during the years ended December 31, 2024, 2023 and 2022 totaled $86.9 million, $82.6 million and $33.1 million, respectively.

Under the Company’s 2013 ESPP, participating employees purchase common stock through payroll deductions. The purchase price is equal to 85% of the lower of the closing price of the Company’s common stock on the first business day and the last business day of the relevant purchase period. The 24-month offering period will end between August 31, 2025 and August 31, 2026. The following table summarizes the Company’s ESPP activity for each of the periods indicated:


	For the Year Ended December 31,
	2024		2023		2022
Number of shares purchased		143,589		153,027		115,124
Proceeds received (in millions)	$	12.2	$	10.8	$	7.5

The following table summarizes stock-based compensation expense by grant type and by function included within the consolidated statements of comprehensive income (loss):


	For the Year Ended December 31,
	2024			2023		2022
	(in thousands)
Stock options	$	62,255		$	79,472	$	174,868
Restricted stock units		135,612			97,808		52,601
Employee stock purchase plan		7,266			5,234		5,549
Subtotal	$	205,133		$	182,514	$	233,018
Capitalized stock-based compensation costs*		(20,833	)		—		—
Total stock-based compensation expense included in expenses	$	184,300		$	182,514	$	233,018
Research and development		74,010			82,489		61,293
Selling, general and administrative		110,290			100,025		171,725
Total stock-based compensation expense included in expenses	$	184,300		$	182,514	$	233,018

*Prior to the year ended December 31, 2024, capitalized stock-based compensation costs were not material.

As of December 31, 2024, there was $238.5 million of total unrecognized stock-based compensation expense related to the Company’s stock-based compensation plans, including estimated forfeitures. The expense is expected to be recognized over a weighted-average period of approximately two years. Of this amount, $72.9 million related to options with service conditions only, $7.9 million related to PSUs with certain performance conditions not met and the remaining $157.7 million related to restricted stock units with service conditions only.