Quarterly report pursuant to Section 13 or 15(d)

Share-based Compensation

Share-based Compensation
6 Months Ended
Jun. 30, 2021
Share-based Payment Arrangement [Abstract]  
Share-based Compensation Share-based Compensation
The Company's Amended and Restated Equity Incentive Plan (the Plan), which was adopted and approved by the Company's shareholders in June 2021, allows for an issuance of up to an additional 11.5 million shares. Also in June 2021, the Company's shareholders adopted and approved the Company's Employee Stock Purchase Plan (2021 ESPP), which allows for the issuance of up to 2.5 million shares. As of June 30, 2021 and December 31, 2020, 128.4 million and 126.7 million, common shares were issued and outstanding.

Stock Options

The Plan requires the exercise price of each option not to be less than the closing market price of the Company’s common shares on the day immediately prior to the date of grant. The board of directors approves the vesting criteria and periods at its discretion. The options issued under the plan are accounted for as equity-settled share-based payments.
The Company used the Black-Scholes option pricing model to estimate the fair value of the options granted. The Company considers historical volatility of its common shares in estimating its future stock price volatility. The risk-free interest rate for the expected life of the options was based on the yield available on government benchmark bonds with an approximate equivalent remaining term at the time of the grant. The expected life is based upon the contractual term, taking into account expected employee exercise and expected post-vesting employment termination behavior. The following weighted average assumptions were used to estimate the fair value of the options granted during the six month periods ended June 30, 2021 and June 30, 2020:
June 30, 2021 June 30, 2020
Annualized volatility 66  % 43%
Risk-free interest rate 0.35  % 0.83  %
Expected life of options in years 4.0 years 3.0 years
Estimated forfeiture rate 8.8  % 13  %
Dividend rate 0.0  % 0.0%
Fair value per common share option $ 6.59  $ 5.20 

Performance Awards
On October 23, 2020, the Company issued 439,000 performance awards to executive management of the Company whose vesting is contingent upon meeting specific performance metrics based on the results for the year ended December 31, 2021. Each performance award which vests entitles the participant to receive common shares on the basis of the performance metrics set. On March 18, 2021 performance metrics were set and formally communicated. Therefore, March 18, 2021 was the grant date and the fair value on the grant date was $13.56. The Company recorded approximately $0.2 million and $0.4 million of share-based compensation expense related to executive performance awards during the three and six month periods ended June 30, 2021.

The following table summarizes the equity award activity during the six months ended June 30, 2021:

June 30, 2021
Number of shares (in thousands) Weighted average exercise price $
Outstanding - Beginning of Period 14,486  11.35 
Granted 1,816  13.34 
Exercised (1,152) 5.55 
Cancelled/Forfeited (372) 14.37 
Outstanding - End of Period 14,778  13.56 
Vested and expected to vest - End of Period 1,812  13.90 
Options exercisable - End of Period 5,628  9.35 
Compensation Expense
The Company recognized share-based compensation expense for the three and six month periods ended June 30, 2021 and June 30, 2020 as follows:
Three months ended
June 30,
Six Months Ended
June 30,
(in thousands) June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020
Research and development $ 1,089  $ 1,080  $ 2,163  $ 2,297 
Selling, general and administrative 6,548  3,122  13,189  5,401 
Capitalized under inventories 116  —  222  — 
Share-based compensation expense $ 7,753  $ 4,202  $ 15,574  $ 7,698 
As of June 30, 2021, there was $38.2 million of unrecognized share-based compensation expense related to unvested awards granted which is expected to be recognized over a weighted-average period of approximately 1.2 years.