STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2018

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

NOTE 5.  STOCK-BASED COMPENSATION

The following table presents stock-based compensation expense recognized for stock options, stock awards, restricted stock units, performance-based restricted stock units and the Company’s Employee Stock Purchase Program (ESPP) in the Company’s Condensed Consolidated Statements of Operations (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Cost of sales	$	16	$	39	$	30	$	75
Research and development expense		14		260		67		607
Selling, general and administrative expense		2,940		3,104		4,849		6,277
Restructuring charges		2,300		—		2,558		—
Total	$	5,270	$	3,403	$	7,504	$	6,959

At June 30, 2018, the Company had $13.2 million of total unrecognized compensation expense related to stock option grants and restricted stock units that will be recognized over an average vesting period of 1.7 years.

Performance-based Restricted Stock Units

During the six months ended June 30, 2018, the Company granted Performance Stock Units (PSUs) with an aggregate target award of 436,024 units and a weighted-average grant-date fair value of $10.13 per unit. The PSUs vest in annual cliffs over a three year period based on the Relative Total Shareholder Return (TSR) of the Company’s common stock against the Russell 3000 Pharmaceuticals Total Return Index over the period. The ultimate award, which is determined at the end of the three-year cycle, can range from zero to 200% of the target. The recipients of the PSU awards will have voting rights and the right to receive a dividend once the underlying shares have been issued. The grant-date fair value is based upon the Monte Carlo simulation method.

The following table summarizes the PSU activity for the six months ended June 30, 2018 under the 2014 Plan (in thousands, except per share data):

		Weighted		Weighted
		Average		Average
		Grant Date		Remaining
		Fair		Contractual		Aggregate
	Number of	Value		Term		Intrinsic
	Shares	Per Share		(in years)		Value
Non-vested performance-based restricted stock units at December 31, 2017	—	$	—
Granted	436,024		10.13
Vested	—		—
Forfeited	(36,800)		10.04
Non-vested performance-based restricted stock units at June 30, 2018	399,224	$	10.14	2.61	$	2,663

As of June 30, 2018, total unrecognized compensation cost related to PSUs was $3.6 million, which is expected to be recognized over the remaining weighted-average vesting period of 2.61 years.