Stock-based Compensation

9 Months Ended

Sep. 30, 2016

Stock-based Compensation

Stock-based Compensation

10.Stock-based Compensation

In June 2015, upon obtaining stockholder approval at its annual shareholder meeting, the Company implemented its new 2015 Stock Plan. The 2015 Stock Plan replaced the 2006 Stock Plan which was terminated upon adoption of the 2015 Stock Plan. Shares of common stock reserved for outstanding awards under the 2006 Stock Plan that lapse or are canceled will be added back to the share reserve available for future awards under the 2015 Stock Plan. The 2015 Stock Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock and other stock-based compensation awards to employees, officers, directors and consultants of the Company. The administration of the 2015 Stock Plan is under the general supervision of the compensation committee of the board of directors. The exercise price of the stock options is determined by the compensation committee of the board of directors, provided that incentive stock options are granted with an exercise price not less than fair market value of the common stock on the date of grant and expire no later than ten years from the date the option is granted. As of September 30, 2016, the Company had options outstanding to purchase 909,977 shares of its common stock, which includes options outstanding under its 2006 Stock Plan that was terminated in June 2015. As of September 30, 2016, 538,093 shares were available for future issuance.

The following table summarizes stock option activity during the nine months ended September 30, 2016:

			Weighted average
	Shares		exercise price
Outstanding at January 1, 2016	289,350		$	159.66
Options granted	772,410		9.51
Options exercised	—		—
Options cancelled	(151,783	)	207.97
Outstanding at September 30, 2016	909,977		$	18.61
Exercisable at September 30, 2016	268,567		$	37.21

The total cash received by the Company as a result of stock option exercises was $0 in each of the nine months ended September 30, 2016 and 2015. The weighted-average grant date fair values, based on the Black-Scholes option model, of options granted during the nine months ended September 30, 2016 was $7.50.

Restricted Common Stock

The Company’s share-based compensation plan provides for awards of restricted shares of common stock to employees, officers, directors and consultants to the Company. Restricted stock awards are subject to forfeiture if employment or service terminates during the prescribed retention period. Restricted shares vest over the service period.

The following table summarizes unvested restricted share activity during the nine months ended September 30, 2016:

			Weighted average
			grant date fair
	Shares		value
Outstanding at January 1, 2016	12,192		$	91.46
Granted	208,765		9.46
Forfeited	(49	)	77.00
Vested	(62,574	)	22.31
Outstanding at September 30, 2016	158,334		$	10.67

Stock-Based Compensation Expense

Stock-based compensation expense during the three months and nine months ended September 30, 2016 and 2015 was as follows:

	Three Months				Nine Months
	Ended September 30,				Ended September 30,
	2016		2015		2016		2015
Stock-based compensation expense by type of award:
Employee stock options	$	1,346,761	$	—	$	1,346,761	$	—
Restricted stock	595,317		—		595,317		—
Change in control bonus plan (see Note 3)	5,410,840		—		5,410,840		—
Total stock-based compensation expense	$	7,352,918	$	—	$	7,352,918	$	—
Effect of stock-based compensation expense by line item:
Research and development	$	5,260,370	$	—	$	5,260,370	$	—
General and administrative	2,092,548		—		2,092,548		—
Total stock-based compensation expense included in net loss	$	7,352,918	$	—	$	7,352,918	$	—

Unrecognized stock-based compensation expense as of September 30, 2016 was as follows:

			Weighted
	Unrecognized		average
	stock		remaining
	compensation		period
	expense		(in years)
Employee stock options	$	4,868,528	2.56
Restricted stock	1,498,592		2.68
Total	$	6,367,120	2.59