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Stock-Based Compensation
12 Months Ended
Dec. 31, 2019
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation
Stock-Based Compensation
2015 Stock Incentive Plan
Under the Company’s stock-based compensation plan which is governed by its Amended and Restated 2015 Stock Incentive Plan, as amended (the “2015 Plan”), the Company may grant incentive stock options, non-qualified stock options, RSAs, RSUs and stock appreciation rights. The maximum number of shares of the Company’s common stock available for issuance under the 2015 Plan is 4,130,000 shares. As of December 31, 2019, 1,100,992 shares were available for grant. It is the Company’s policy that before stock is issued through the exercise of stock options, the Company must first receive all required cash payment for such shares. The stock issuable under the 2015 Plan must be shares of authorized new unissued shares.
Stock-based awards are governed by agreements between the Company and the recipients. Incentive stock options and non-qualified stock options may be granted under the 2015 Plan at an exercise price of not less than 100% of the closing fair market value of the Company’s common stock on the respective date of grant. The grant date is generally the date of approval of the grant. The Company’s standard stock-based awards vest as to 1/3 of the shares underlying the award on the 1st anniversary of the date of grant, or for new hires, the 1st anniversary of their initial date of employment with the Company. Awards vest monthly thereafter on a straight-line basis over 2 years. All stock options have 10-year terms.
2017 Inducement Stock Incentive Plan
On October 27, 2017, the Company adopted the 2017 Inducement Stock Incentive Plan, as amended (the “2017 Inducement Plan”). The 2017 Inducement Plan provides for the grant of equity-based awards in the form of non-qualified stock options, RSAs, RSUs, stock appreciation rights, performance shares and performance units. In accordance with Nasdaq Listing Rules, awards under the 2017 Inducement Plan may only be made to an employee who has not previously been a member of the Board, or an employee or member of the Board of any subsidiary of the Company, or following a bona fide period of non-employment with the Company or any subsidiary of the Company, if he or she is granted such award in connection with his or her commencement of employment with the Company or a subsidiary of the Company and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary.
The maximum number of shares of the Company’s common stock available for issuance under the 2017 Inducement Plan is 900,000 shares. As of December 31, 2019, 497,059 shares were available for grant.
Employee Stock Purchase Plan
Under the terms of the ESPP, eligible employees can purchase common stock, through payroll deductions, at a purchase price equal to the closing price of the Company’s common stock on the first or last day of the offering period (whichever is less) minus a 15% discount. As of December 31, 2019, 434,542 shares were available for grant.
The table below summarizes the stock-based compensation expense, common stock purchased by Company employees and the average purchase price per share under the ESPP in the years ended December 31, 2019, 2018 and 2017.
 
Year Ended December 31,
 
2019
 
2018
 
2017
Stock-based compensation expense
$
131

 
$
1,033

 
$
850

Common stock purchased by Company employees
103,981

 
60,695

 
44,649

Average purchase price per share
$
3.33

 
$
22.16

 
$
56.43


Stock-based Compensation Expense Summary
The table below summarizes the impact of recording stock-based compensation expense in the Consolidated Statements of Operations and Comprehensive Loss in the years ended December 31, 2019, 2018 and 2017:

Year Ended December 31,

2019

2018

2017
Cost of goods sold
$
829

 
$
830

 
$
828

Operating expenses:
 
 
 
 
 
Research and development
1,346

 
1,132

 
1,259

Clinical and regulatory affairs
790

 
483

 
770

Marketing and sales
3,100

 
3,468

 
3,796

General and administrative
4,784

 
5,117

 
4,991

Total operating expenses
10,020

 
10,200

 
10,816

Total stock-based compensation expense
$
10,849

 
$
11,030

 
$
11,644


In addition, the Company had $0.5 million, $0.3 million and $0.4 million of stock-based compensation expense capitalized in inventory as of December 31, 2019, 2018 and 2017, respectively.

Valuation Assumptions
The following assumptions were used to determine fair value for the stock options granted in the applicable year:

Year Ended December 31,

2019

2018

2017
Expected life (in years)
5.7
 
5.6
 
5.6
Volatility
62.9%
 
56.5%
 
51.3%
Risk-free interest rate
2.3%
 
2.7%
 
1.9%
Dividend yield
 
 
Weighted average grant date fair value per share
$6.48
 
$10.66
 
$25.13

Stock Option Activity
Stock option activity in the year ended December 31, 2019 was as follows:
 
Number of
Shares
 
Weighted
Average
Exercise Price
 
Weighted-
Average
Remaining
Contractual Life 
(in years)
 
Aggregate Intrinsic Value (a)
Outstanding balance at December 31, 2018
1,315,360

 
$
54.20

 
 
 
 
Granted
2,039,387

 
6.48

 
 
 
 
Exercised

 

 
 
 
 
Forfeited
(508,630
)
 
38.86

 
 
 
 
Expired
(504,591
)
 
81.28

 
 
 
 
Outstanding balance at December 31, 2019
2,341,526

 
$
10.12

 
8.6
 
$

Vested and expected to vest balance at December 31, 2019
2,081,243

 
$
10.53

 
8.6
 
$

Exercisable balance at December 31, 2019
482,446

 
$
21.65

 
8.1
 
$


(a)
The aggregate intrinsic value of stock options as of December 31, 2019 is calculated based on the difference between the Company’s closing stock price on the last trading day of the period reported and the stock option exercise price.
In the year ended December 31, 2019, no stock options were exercised. In the years ended December 31, 2018 and 2017, the aggregate intrinsic value of stock options exercised was $1.3 million and $0.2 million, respectively.
As of December 31, 2019, the aggregate unrecognized compensation expense related to stock options of $8.7 million is expected to be recognized over an estimated weighted average period of 2.6 years.
The following table summarizes information regarding outstanding and exercisable stock options as of December 31, 2019:
 
 
Outstanding
 
Exercisable
Range of Exercise Prices
 
Number of Shares
 
Weighted
Average
Remaining
Contractual
Term (in years)
 
Weighted
Average
Exercise
Price
 
Number of Shares
 
Weighted
Average
Remaining
Contractual
Term (in years)
 
Weighted
Average
Exercise
Price
$
2.30

$
6.35

 
317,162

 
6.4
 
$
5.12

 

 
0.0
 
$

6.67

6.67

 
1,450,075

 
9.3
 
6.67

 
146,982

 
9.0
 
6.67

6.76

7.45

 
290,484

 
9.0
 
7.29

 
214,631

 
9.0
 
7.43

7.53

75.30

 
265,773

 
7.2
 
31.02

 
103,021

 
5.8
 
56.95

77.60

175.80

 
18,032

 
2.2
 
112.55

 
17,812

 
2.1
 
112.52

$
2.30

$
175.80

 
2,341,526

 
8.6
 
$
10.12

 
482,446

 
8.1
 
$
21.65


RSU Activity
The following table summarizes the activity for RSUs:
 
Number of
Shares
 
Weighted Average
Grant Date Fair
Value
Unvested as of December 31, 2018
422,720

 
$
26.15

Granted (1)
745,498

 
6.51

Forfeited
(41,363
)
 
31.50

Vested
(255,873
)
 
16.69

Unvested as of December 31, 2019
870,982

 
$
11.88


(1)
Shares granted in 2019 include 470,886 performance stock units that require certain performance conditions to be achieved in order to vest.
In the years ended December 31, 2019, 2018 and 2017, the weighted average grant date fair value of RSUs granted was $6.51, $15.02 and $50.10, respectively.
In the years ended December 31, 2019, 2018 and 2017, the total fair value of RSUs vested was $0.9 million, $2.1 million and $1.8 million, respectively.
As of December 31, 2019, the aggregate unrecognized compensation expense related to RSUs of $4.3 million is expected to be recognized over an estimated weighted average period of 1.54 years.
Award Modifications
There were no award modifications in the year ended December 31, 2019. In the year ended December 31, 2018, there were award modifications affecting 2 individuals, a former executive and a former director of the Company, in connection with their departures. The employees were provided with accelerated vesting and extended exercisability for certain awards outstanding which included stock options, RSUs and performance stock units. The total incremental stock-based compensation expense recognized in the years ended 2019, 2018 and 2017 related to award modifications was $0 million, $1.8 million and $0.3 million, respectively.