Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.20.2
Stockholders' Equity
9 Months Ended
Sep. 30, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stockholders' Equity

8.

Stockholders’ Equity

Our authorized capital stock consists of 520,000,000 shares, all with a par value of $0.0001 per share, of which 500,000,000 shares are designated as common stock and 20,000,000 shares are designated as preferred stock. There were no shares of preferred stock outstanding as of September 30, 2020 and December 31, 2019.

 

Equity Offerings

In the second quarter of 2020, we issued and sold 12,633,039 shares of common stock at a public offering price of $11.32 per share and pre-funded warrants to purchase 2,866,961 shares of common stock at a public offering price of $11.3199 per warrant in an underwritten public offering pursuant to a shelf registration on Form S-3. We granted the underwriters an option to purchase up to 2,325,000 additional shares of our common stock at a public offering price of $11.32, less underwriting discounts and commissions. The full option was exercised by the underwriters in June 2020. The gross proceeds from this public offering were $201.8 million, resulting in net proceeds of $189.3 million, after deducting underwriting discounts and commissions and offering expenses payable by us.

Each pre-funded warrant entitles the holder to purchase one share of common stock at an exercise price of $0.0001 per share and expires seven years from the date of issuance. These warrants were recorded as a component of stockholders’ equity within additional paid-in capital. Per the terms of the warrant agreement, a holder of the outstanding warrants is not entitled to exercise any portion of any pre-funded warrant if, upon exercise of the warrant, the holder’s ownership (together with its affiliates) of our common stock or combined voting power of our securities beneficially owned by such holder (together with its affiliates) would exceed 9.99% after giving effect to the exercise (“Maximum Ownership Percentage”). Upon at least 61 days’ prior notice to us by the holder, any holder may increase or decrease the Maximum Ownership Percentage to any other percentage not to exceed 19.99%. As of September 30, 2020, all 2,866,961 pre-funded warrants from this offering were outstanding.

As part of our July 2019 underwritten public offering, we also issued and sold pre-funded warrants to purchase 2,945,026 shares of common stock with terms similar to those above. As of September 30, 2020, pre-funded warrants to purchase 2,888,526 shares of our common stock from the July 2019 underwritten public offering were outstanding.

 

ATM Facilities

In February 2019, we entered into a sales agreement (the “2019 ATM Facility”) with Cowen and Company, LLC (“Cowen”), which provides for the sale, in our sole discretion, of shares of our common stock, in the aggregate offering price of up to $100.0 million through Cowen, as our sales agent. The issuance and sale of these shares by us pursuant to the 2019 ATM Facility are deemed “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), and are registered under the Securities Act. We pay a commission of up to 3.0% of gross sales proceeds of any common stock sold under the 2019 ATM Facility.

 

In February 2020, we entered into a new sales agreement (the “2020 ATM Facility”) with Cowen, which provides for the sale, in our sole discretion, of shares of our common stock having an aggregate offering price of up to $100.0 million through Cowen, as our sales agent. The 2020 ATM Facility is separate from and does not replace the 2019 ATM Facility in any way. The issuance and sale of these shares by us pursuant to the 2020 ATM Facility are deemed “at the market” offerings and are registered under the Securities Act of 1933. We will pay a commission of up to 3.0% of gross sales proceeds of any common stock sold under the 2020 ATM Facility.

 

During the three months ended September 30, 2020, we sold an aggregate of 2,581,768 shares of common stock under the ATM facilities, at an average price of $13.56 per share, for gross proceeds of $35.0 million and net proceeds of $34.1 million, after deducting commissions payable by us. For the nine months ended September 30, 2020, we sold an aggregate of 4,109,984 shares of common stock under the ATM facilities, at an average price of $14.28 per share, for gross proceeds of $58.7 million and net proceeds of $57.1 million, after deducting commissions and other offering expenses payable by us. On October 2, 2020, we received net proceeds of approximately $0.3 million from sales of shares of common stock under the 2020 ATM Facility that occurred during September 2020. On January 3, 2020, we received net proceeds of approximately $1.2 million from sales of shares of common stock under the 2019 ATM Facility that occurred during December 2019.

 

As of September 30, 2020, we have fully utilized the 2019 ATM Facility and $90.9 million of common stock remained available to be sold under the 2020 ATM Facility, subject to certain conditions as specified in the sales agreements.

 

Equity Incentive Plans

Under the terms of the 2014 Equity Incentive Plan, as amended (“2014 EIP”), we may grant stock options, restricted stock awards (“RSAs”) and RSUs to employees, directors, consultants and other service providers. RSUs generally vest over four years. In 2020, we granted performance-based awards to certain of our employees that provide for the issuance of common stock if specified Company performance criteria related to our clinical programs are achieved. The number of performance-based awards that ultimately vests depends upon if, when and which performance criteria are achieved, as well as the employee’s continuous service, as defined in the 2014 EIP, through the date of vesting. The fair value of performance-based RSUs is determined as the closing stock price on the date of grant.

Stock options are granted at prices no less than 100% of the estimated fair value of the shares on the date of grant as determined by the board of directors, provided, however, that the exercise price of an option granted to a 10% shareholder cannot be less than 110% of the estimated fair value of the shares on the date of grant. Options granted generally vest over four years and expire in seven to ten years. As of September 30, 2020, a total of 13,803,560 shares of common stock were reserved for issuance under the 2014 EIP, of which 2,434,930 shares were available for future grant and 11,368,630 shares were subject to outstanding options and RSUs, including performance-based awards.

In February 2018, we adopted the 2018 Inducement Plan (“Inducement Plan”), under which we may grant options, stock appreciation rights, RSAs and RSUs to new employees. In September 2020, we amended the Inducement Plan to reserve an additional 1,500,000 shares of the Company’s common stock for issuance under the Inducement Plan, as amended. As of September 30, 2020, 2,634,836 shares of common stock were reserved for issuance under the Inducement Plan, of which 1,734,211 shares were available for future grant and 900,625 shares were subject to outstanding options and RSUs.

Restricted Stock Units

The following is a summary of RSU activity under our 2014 EIP and Inducement Plan:

 

 

 

RSUs

 

 

 

Shares

 

 

Weighted

Average

Grant Date Fair Value

 

Unvested as of December 31, 2019

 

 

1,910,764

 

 

$

26.93

 

Granted

 

 

3,880,991

 

 

$

12.09

 

Forfeited

 

 

(650,540

)

 

$

19.18

 

Vested

 

 

(1,096,522

)

 

$

20.14

 

Unvested as of September 30, 2020

 

 

4,044,693

 

 

$

15.78

 

 

As of September 30, 2020, there was $45.5 million of unrecognized stock-based compensation expense related to RSUs that is expected to be recognized over a weighted average period of 2.5 years. This excludes unrecognized stock-based compensation expense for performance-based RSUs that were deemed not probable of vesting in accordance with U.S GAAP.

 

Stock Options

The following is a summary of stock option activity under our 2014 EIP and Inducement Plan. The table below also includes the activity relating to options for 275,000 shares of our common stock which were issued in 2017 outside of these plans:

 

 

 

Shares

 

 

Weighted Average

Exercise Price

 

 

Weighted Average

Remaining

Contractual Term

(Years)

 

 

Aggregate Intrinsic

Value

(in thousands)

 

Outstanding as of December 31, 2019

 

 

6,934,262

 

 

$

28.25

 

 

 

 

 

 

 

 

 

Granted

 

 

2,504,925

 

 

 

11.75

 

 

 

 

 

 

 

 

 

Exercised

 

 

(132,911

)

 

 

13.47

 

 

 

 

 

 

 

 

 

Forfeited or expired

 

 

(1,081,714

)

 

 

30.89

 

 

 

 

 

 

 

 

 

Outstanding as of September 30, 2020

 

 

8,224,562

 

 

$

23.12

 

 

 

6.5

 

 

$

3,985

 

 

Aggregate intrinsic value represents the difference between the closing stock price of our common stock on September 30, 2020 and the exercise price of outstanding, in-the-money options. As of September 30, 2020, there was $55.4 million of unrecognized stock-based compensation expense related to stock options that is expected to be recognized over a weighted average period of 2.7 years.

Reserved Shares

The following shares of common stock were reserved for future issuance under our equity incentive plans as of September 30, 2020:

 

 

Total Shares

Reserved

 

2014 Equity Incentive Plan

 

13,803,560

 

2018 Inducement Plan

 

2,634,836

 

2014 Employee Stock Purchase Plan

 

1,066,654

 

Total reserved shares of common stock

 

17,505,050

 

 

Stock-based Compensation Expense

Total stock-based compensation expense related to all employee and non-employee stock awards was as follows:

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(in thousands)

 

 

(in thousands)

 

Research and development

 

$

8,151

 

 

$

7,003

 

 

$

24,341

 

 

$

19,740

 

General and administrative

 

 

5,104

 

 

 

5,149

 

 

 

15,506

 

 

 

19,882

 

Total stock-based compensation expense

 

$

13,255

 

 

$

12,152

 

 

$

39,847

 

 

$

39,622