Stock-Based Compensation

3 Months Ended

Mar. 31, 2014

Stock-Based Compensation

3. Stock-Based Compensation

Following is the stock-based compensation expense related to common stock options, common stock, restricted common stock and common stock warrants:

	Three Months Ended March 31,
	2014		2013
Research and development	$	638	$	319
General and administrative		1,010		533
Total stock-based compensation expense	$	1,648	$	852

The following table summarizes the stock option activity in the Company’s equity incentive plans, including non-plan grants to Company executives, from December 31, 2013 through March 31, 2014:

	Shares			Weighted Average Exercise Price
Outstanding, December 31, 2013		3,348,705		$	4.70
Granted		326,500			13.38
Exercised		(288,749	)		2.07
Options forfeited/cancelled		(21,258	)		3.59
Outstanding, March 31, 2014		3,365,198		$	5.78

As of March 31, 2014, there was $6,491,000 of unrecognized compensation related to 1,360,476 unvested options, which is expected to be recognized over a weighted–average period of approximately 2.6 years. The weighted-average grant date fair value for options granted during the three months ended March 31, 2014 and 2013 was $11.28 and $2.73, respectively. The Company granted 326,500 stock options during the three months ended March 31, 2014, of which 81,625 options vested upon grant with the remaining 244,875 options vesting over 3 years. Approximately $921,000 of non-cash, stock-based compensation expense was recorded during the three months ended March 31, 2014 related to the options granted during the quarter that were vested upon the grant date.

The fair value of all other options granted is determined using the Black-Scholes option-pricing model. The following weighted average assumptions were used:

	Three Months Ended March 31,	Three Months Ended March 31,
	2014	2013
Risk-free interest rate	1.58%	0.80%
Expected life of the options	6.0 years	5.0 years
Expected volatility of the underlying stock	114%	117%
Expected dividend rate	0%	0%

In January 2014, the Company entered into an agreement with a consultant that provided for the grant of 3,000 shares of common stock. The Company recognized an expense of $25,000, representing the market value of the common stock, during the three months ended March 31, 2014.