Stock Based Compensation

9 Months Ended

Sep. 30, 2014

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

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 initial public offering 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 September 30, 2014 there were 6,949,108 shares reserved under the 2013 Plan for the future issuance of equity awards.

The following table summarizes option activity under our 2013 Equity Incentive Plan and related information during the nine months ended September 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		(1,114,013	)		1,114,013			25.50
Options exercised		—			(517,481	)		6.41
Options canceled		145,410			(145,410	)		18.26
Balance at September 30, 2014		1,159,130			4,159,895		$	13.80

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 September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Risk-free interest rate		1.89	%		1.80	%		1.89	%		1.30	%
Expected life	5.8				6.0		5.9				6.0
Expected Volatility		79	%		80	%		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 September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Research and development	$	953	$	787	$	3,321	$	1,732
General and administrative		1,197		747		3,555		1,725
Total stock-based compensation	$	2,150	$	1,534	$	6,876	$	3,457