Sutro Biopharma, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 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)

12 Months Ended

Dec. 31, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

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

	Outstanding Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contract Term (Years)		Aggregate Intrinsic Value
Balances at December 31, 2016		796,907		$	10.05		7.61	$	2,685
Granted		62,392		$	13.10
Exercised		(13,499	)	$	7.06
Canceled		(10,480	)	$	12.46
Balances at December 31, 2017		835,320		$	10.31		6.84	$	3,813
Granted		2,312,821		$	14.85
Exercised		(20,009	)	$	6.53
Canceled		(16,414	)	$	14.49
Balances at December 31, 2018		3,111,718		$	13.74		8.76	$	1,088
Exercisable at December 31, 2018		896,818		$	10.99		6.44	$	1,088
Vested and expected to vest at December 31, 2018		896,818		$	10.99		6.44	$	1,088

Schedule of Employee Stock Options Valuation

For determining stock-based compensation expense under the Plan, the fair-value-based measurement of our share-based payments were estimated as of the date of grant using the Black-Scholes option pricing model with assumptions as follows:

	Year Ended December 31,
	2018		2017		2016
Expected term (in years)	5.3-6.1		5.5-6.1		5.7-6.1
Expected volatility	54.57%-62.38%		56.52%-58.55%		58.00%-59.00%
Risk-free interest rate	2.67%-3.11%		1.89%-2.18%		1.24%-2.09%
Expected dividend		-		-		-

Summary of Status and Activity of Non-vested RSUs

A summary of the status and activity of non-vested RSUs at December 31, 2018 is as follows:

	Number of shares			Weighted Average Grant-Date Fair Value
Non-vested December 31,2017		-			-
Granted		312,400		$	15.20
Canceled		(1,160	)	$	15.20
Non-vested December 31,2018		311,240		$	15.20

Schedule of Fair Value of ESPP shares Using Option Pricing Model

The fair value of the ESPP shares is estimated using the Black-Scholes option pricing model. For the year ended December 31, 2018, the fair value of ESPP shares was estimated using the following assumptions:

	Year Ended December 31,
	2018
Expected term (in years)	0.5
Expected volatility		55.28	%
Risk-free interest rate		2.37	%
Expected dividend		-

Schedule of Stock-Based Compensation Expense Recognized

Total stock-based compensation expense recognized was as follows:

	Year Ended December 31,
	2018		2017		2016
	(in thousands)
Research and development	$	619	$	119	$	104
General and administrative		2,253		1,272		864
Total	$	2,872	$	1,391	$	968