Stock-Based Compensation

9 Months Ended

Sep. 30, 2020

Stock-Based Compensation

Stock-Based Compensation

14.         Stock-Based Compensation

As of September 30, 2020, a total of 10,875,131 shares remained available for grant under the Company’s 2011 Long-Term Incentive Plan.

The Company’s net loss for the nine months ended September 30, 2020 and 2019 includes $5.7 million and $5.3 million, respectively, of non-cash compensation expense related to the Company’s share-based compensation awards. The compensation expense related to the Company’s share-based compensation arrangements is recorded as components of general and administrative expense and research and development expense, as follows:

	Nine Months Ended September 30,
(In thousands)	2020		2019
Research and development	$	123	$	359
General and administrative		5,562		4,961
Share-based compensation expense	$	5,685	$	5,320

Compensation expense related to stock options is recognized over the requisite service period, which is generally the option vesting term of up to five years. Awards with performance conditions are expensed when it is probable that the performance condition will be achieved. For the nine month periods ended September 30, 2020 and 2019, approximately $13,000 and $58,000 was expensed for stock option awards with performance conditions that were probable during the period, respectively.

The Company uses the Black-Scholes-Merton valuation model to estimate the fair value of service based and performance-based stock options granted to employees. Option valuation models, including Black-Scholes-Merton, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant date fair value of an award. These assumptions include the risk-free interest rate, expected dividend yield, expected volatility, and the expected life of the award.

Following are the weighted-average assumptions used in valuing the stock options granted to employees during the nine month periods ended September 30, 2020 and 2019:

	Nine Months Ended September 30,
	2020		2019
Expected volatility	77.71	%	77.36	%
Range of expected volatility	75.84% to 81.63	%	75.50% to 84.48	%
Range of risk free interest rate	0.31% to 1.77	%	1.62% to 2.59	%
Expected term of option	6.03	years	6.05	years
Expected dividend yield	0.00	%	0.00	%

The weighted average fair value of stock options granted during the nine month periods ended September 30, 2020 and 2019 were $1.96 and $2.20, respectively.

A summary of changes in options under the Company’s stock option plans during the nine month period ended September 30, 2020 is as follows:

		Weighted Average
	Number of Options	Exercise Price
Outstanding at January 1, 2020	18,268,372	$	2.58
Exercised	(2,789,473)	$	1.39
Granted	1,245,686	$	2.92
Expired	(110,430)	$	4.96
Forfeited	(658,125)	$	3.89
Outstanding at September 30, 2020	15,956,030	$	2.75
Vested and expected to vest at September 30, 2020	15,956,030	$	2.75
Exercisable at September 30, 2020	9,153,348	$	2.35

Cash received from option exercises under all share-based payment arrangements for the nine month periods ended September 30, 2020 and 2019 was $3.9 million and $114,000, respectively.