Stock Based Compensation

6 Months Ended

Jun. 30, 2014

Stock Based Compensation

8. 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. On January 1, 2014, the number of shares available for issuance under the 2013 Plan automatically increased by a number of shares equal to 5% of the total common stock outstanding at December 31, 2013. As of June 30, 2014 there were 6,949,108 shares reserved under the 2013 Plan for the issuance of awards.

The following table summarizes option activity under our 2013 Equity Incentive Plan and related information during the six months ended June 30, 2014:

				Shares
				Subject to			Weighted-
	Shares Available			Outstanding			Average Exercise
	for Grant			Options			Price Per Share
Balance at December 31, 2013		81,948			3,708,773		$	9.43
Options authorized		2,045,785			—			—
Options granted		(1,003,013	)		1,003,013			25.47
Options exercised		—			(433,146	)		6.34
Options canceled		52,470			(52,470	)		11.77
Balance at June 30, 2014		1,177,190			4,226,170		$	13.53

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Risk-free interest rate		1.89	%		1.20	%		1.89	%		1.10	%
Expected life	5.8				6.0		5.9				6.0
Expected Volatility		80	%		79	%		80	%		79	%
Dividend yield		—			—			—			—

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Research and development	$	1,283	$	609	$	2,330	$	945
General and administrative		1,140		601		2,396		978
Total stock-based compensation	$	2,423	$	1,210	$	4,726	$	1,923