Sutro Biopharma, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Equity Incentive Plans, Employee Stock Purchase Plan and Stock-Based Compensation (Tables)

Equity Incentive Plans, Employee Stock Purchase Plan and Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2020

The following table summarizes option activity under the Company’s 2004 Plan and 2018 Plan:

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contract Term (Years)		Aggregate Intrinsic Value (in thousands)
Stock options outstanding at December 31, 2019		3,872,664		$	12.89		7.88	$	2,119
Granted		1,304,000		$	8.78
Exercised		(12,937	)	$	4.35
Canceled and forfeited		(18,092	)	$	12.36
Stock options outstanding at March 31, 2020		5,145,635		$	11.87		8.22	$	3,549
Stock options exercisable at March 31, 2020		1,940,215		$	12.60		6.70	$	1,172

Summary of Status and Activity of Non-vested RSUs

A summary of the status and activity of non-vested RSUs at March 31, 2020 is as follows:

	Number of shares			Weighted Average Grant-Date Fair Value
Non-vested December 31, 2019		335,799		$	13.49
Granted		478,000		$	8.14
Vested and released		(41,050	)	$	11.45
Canceled and forfeited		(5,733	)	$	11.78
Non-vested March 31, 2020		767,016		$	10.27

Schedule of Fair Value of ESPP Shares Using Option Pricing Model

For the three months ended March 31, 2020, the fair value of ESPP shares was estimated using the following assumptions:

	Three Months Ended			Three Months Ended
	March 31, 2020			March 31, 2019
Expected term (in years)	0.5			0.5
Expected volatility		63.04	%		74.89	%
Risk-free interest rate		1.92	%		2.44	%
Expected dividend		–			–

Schedule of Stock-Based Compensation Expense Recognized

Total stock-based compensation expense recognized was as follows:

	Three Months Ended
	March 31,
	2020		2019
	(in thousands)
Research and development	$	515	$	411
General and administrative		2,192		1,875
Total	$	2,707	$	2,286

Employee Stock Options

Schedule of Employee Stock Options Valuation

For determining stock-based compensation expense, the fair-value-based measurement of each employee stock option was estimated as of the date of grant using the Black-Scholes option-pricing model with assumptions as follows:

	Three Months Ended
	March 31,
	2020		2019
Expected term (in years)	5.05-7.01		5.05-7.01
Expected volatility	73.15%-77.34%		72.89%-74.89%
Risk-free interest rate	0.79%-1.62%		2.40%-2.55%
Expected dividend		–		–