6.      Share-Based Compensation

Equity Incentive Plans

The Company’s 2018 Incentive Award Plan (the “2018 Plan”) and 2016 Equity Incentive Plan (the “2016 Plan”) were adopted by the Company’s board of directors and shareholders. Under the 2018 Plan and the 2016 Plan, the Company has granted share options and restricted share units (“RSUs”) to selected officers, employees, non-employee members of the board of directors and non-employee consultants. Upon the adoption of the 2018 Plan, the Company ceased issuing awards under the 2016 Plan.

In June 2026, the Board approved the 2026 Employment Inducement Award Plan (the “2026 Plan”, and together with the 2018 Plan and the 2016 Plan, the “Plans”) to make equity awards to newly hired employees as a material inducement to employment in accordance with Nasdaq Rule 5635(c)(4).  

The Company’s board of directors or a committee thereof administers the Plans.

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Options

A summary of the Company’s share option activity related to employees, non-employee members of the board of directors and non-employee consultants as of December 31, 2025 and for the six-month period ended June 30, 2026 is as follows (in thousands, except share and per share amounts):

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Options granted under the Plans have a maximum contractual term of ten years. Options granted generally vest 25% on the first anniversary of the date of grant and the balance ratably over the next 36 months. Options granted to directors when they join the board generally vest in 36 equal monthly installments following the date of grant, and annual options granted to directors generally vest on the earlier of the first anniversary of the date of grant or the day before the Company’s annual meeting of shareholders after the date of grant.

The Company recorded the following share-based compensation expense in connection with the options for the three-month and six-month periods ended June 30, 2026 and 2025 (in thousands):

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The total fair value of options vested during the three-month periods ended June 30, 2026 and 2025 was $0.8 million and $1.4 million, respectively.

The total fair value of options vested during the six-month periods ended June 30, 2026 and 2025 was $1.5 million and $3.4 million, respectively.

The weighted-average grant date fair value of options granted during the six-month periods ended June 30, 2026 and 2025 was $6.22 and $3.85 per share, respectively.

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As of June 30 2026, the total compensation expense relating to unvested options granted that had not yet been recognized was $4.0 million, which is expected to be realized over a period of 4.0 years. The Company will issue shares upon exercise of options from ordinary shares reserved under the Plans.

Restricted Share Units

A summary of the Company’s RSU activity related to employees, non-employee members of the board of directors and non-employee consultants as of December 31, 2025 and for the six-month period ended June 30, 2026 is as follows:

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RSUs granted generally vest 50% on the second anniversary of the date of grant and 25% on the third and fourth anniversaries of the date of grant. Annual RSUs granted to directors generally vest in a single installment on the earliest to occur of the first anniversary of the grant date or the day immediately prior to the date of the next annual meeting of the Company’s shareholders occurring after the date of grant. The RSUs granted to the directors in June 2021 will be paid on or within 30 days after the date a director ceases to serve on the board. For RSUs granted in June 2022 and future years, the directors may annually elect whether to defer the payment of their annual RSU awards under the Deferred Compensation Plan for Non-Employee Directors, which was adopted by the board on December 17, 2021. As of June 30, 2026, there were 722,500 vested shares that have been deferred and are excluded from ordinary shares outstanding. The related share-based compensation expense, which is recognized ratably over the requisite service period, is included in general and administrative and research and development expenses, as applicable, in the condensed consolidated statements of operations and comprehensive income (loss).

The Company recorded the following share-based compensation expense in connection with the RSUs for the three-month and six-month periods ended June 30, 2026 and 2025 (in thousands):

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As of June 30, 2026, the total compensation expense relating to unvested RSUs granted that had not yet been recognized was $59.2 million, which is expected to be realized over a period of 4.0 years.

To satisfy employee minimum statutory tax withholding requirements for restricted share units that vest, the Company withholds a portion of the vested ordinary shares. During the six months ended June 30, 2026 and 2025, the Company withheld 798,155 and 405,459 ordinary shares with a total value of $6.0 million and $2.8 million, respectively. These amounts are presented as a cash outflow from financing activities in the accompanying condensed consolidated statement of cash flows.

During the three-month and six-month periods ended June 30, 2026 and 2025, the Company recognized total share-based compensation expense in the accompanying condensed consolidated statements of operations and comprehensive income (loss) as follows (in thousands):

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The Company does not expect to realize any tax benefits from its share option activity or the recognition of share-based compensation expense because it maintains a full valuation allowance against its deferred tax assets. While the Company may report taxable income in certain periods as a result of non-recurring transactions, management has concluded that such income is not sufficient positive evidence to overcome the significant negative evidence supporting the valuation allowance. Accordingly, no amounts related to excess tax benefits have been reported in cash flows from operations or cash flows from financing activities for the six-month periods ended June 30, 2026 and 2025.