Stock-Based Compensation

9 Months Ended

Sep. 30, 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 September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
	(in thousands)
Research and development	$	224	$	335	$	1,083	$	865
General and administrative		653		1,473		2,188		2,411
Total stock-based compensation expense	$	877	$	1,808	$	3,271	$	3,276

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 September 30, 2014:

	Shares			Weighted Average Exercise Price
Outstanding, December 31, 2013		3,348,705		$	4.70
Granted		354,823			12.72
Exercised		(350,728	)		1.91
Options forfeited/cancelled		(24,283	)		3.85
Outstanding, September 30, 2014		3,328,517		$	4.82

As of September 30, 2014, there was $5,063,000 of unrecognized compensation related to 1,103,474 unvested options, which is expected to be recognized over a weighted–average period of approximately 2 years. The weighted-average grant date fair value for options granted during the nine months ended September 30, 2014 and 2013 was $10.75 and $3.17, respectively.

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

	Nine Months Ended September 30,
	2014			2013
Risk-free interest rate		1.58	%		1.17	%
Expected life of the options		6.0 years			5.3 years
Expected volatility of the underlying stock		114	%		115	%
Expected dividend rate		0	%		0	%

In January 2014, the Company entered into an agreement with a consultant that provided for the grant of common stock as part of the compensation to the consultant. During the three months ended September 30, 2014, the Company issued 3,873 shares of its common stock valued at $50,000 under the agreement. During the nine months ended September 30, 2014, the Company issued 8,966 shares of its common stock valued at $100,000 under the agreement. This agreement ended in October 2014.