Stock-Based Compensation

9 Months Ended

Sep. 30, 2013

Stock-Based Compensation

9. Stock-Based Compensation

In January 2013, our Board of Directors adopted our 2013 Equity Incentive Plan, or the 2013 Plan, which became effective upon of the closing of our IPO in May 2013. As of September 30, 2013 there are 4,903,323 shares reserved under the 2013 Plan for the issuance of options and restricted stock.

The estimated grant date fair values of the employee stock options were calculated using the Black Scholes valuation model, based on the following assumptions:

	ThreeMonthsEndedSeptember30,							NineMonthsEndedSeptember30,
	2013			2012			2013				2012
Risk-free interest rate		1.8	%		1.2	%			1.3	%		1.2	%
Expected life		6.0years			6.0years				6.0years			6.0years
Volatility		80	%		70	%			79	%		70	%
Dividend yield		0	%		0	%			0	%		0	%

The following table summarizes option activity under our 2003 Equity Incentive Plan and our 2013 Equity Incentive Plan and related information during the nine months ended September30, 2013:

	SharesAvailable for Grant			SharesSubjectto Outstanding Options			Weighted-Average ExercisePricePer Share
Balance at December31, 2012		593,011			3,451,178		$	6.35
Options authorized		150,000			—			—
Options granted		(785,241	)		785,241			17.29
Options exercised		—			(129,787	)		22.67
Options cancelled		326,274			(326,274	)		7.81
Balance at September30, 2013		284,044			3,780,358		$	7.94

The table below sets forth the functional classification of stock-based compensation expense, net of estimated forfeitures, for the periods presented (in thousands):

	ThreeMonthsEndedSeptember30,						NineMonthsEndedSeptember30,
	2013			2012				2013			2012
Research and development	$	787	$		353	$			1,732	$		1,102
General and administrative		747			303				1,725			965
Total stock-based compensation	$	1,534	$		656	$			3,457	$		2,067