Stock-Based Compensation

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

9. Stock-Based Compensation

As of December 31, 2014, there were 2.0 million shares of common stock available to be granted under the Company’s 2011 Stock Incentive Plan (the “2011 Plan”). The 2011 Plan is administered by the Company’s board of directors and permits the Company to grant incentive and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards.

In February 2015, 3.7 million additional shares of common stock became available for grant to employees, officers, directors and consultants under the 2011 Plan. During the three months ended March 31, 2015 and 2014, the Company issued options to purchase 2.3 million and 2.8 million shares of common stock, respectively. At March 31, 2015, there were 3.5 million shares remaining available for grant under the 2011 Plan.

The assumptions used to estimate the fair value of options granted to employees and directors at the date of grant for the three months ended March 31, 2015 were as follows:

	Three months ended March 31, 2015
Risk-free interest rate		1.6-1.8	%
Expected dividend yield		0	%
Expected term		5.9 years
Expected volatility		67	%

Options granted to employees generally vest over a three year period. The Company recognized stock-based compensation expense as follows for the three months ended March 31, 2015 and 2014:

	Three months ended March 31,
(in thousands)	2015		2014
Employee awards:
Research and development	$	1,967	$	1,681
General and administrative		1,377		1,292
Stock-based compensation for employee awards		3,344		2,973
Stock-based compensation for non-employee awards		26		(37	)
Total stock-based compensation	$	3,370	$	2,936

The stock-based compensation for non-employee awards recognized during the three months ended March 31, 2014 was negative due to the change in fair value of options granted during previous periods.

The following table summarizes stock option activity during the three months ended March 31, 2015:

(in thousands, except per share amounts and years)	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding, December 31, 2014		19,556		$	4.47		6.17	$	133,599
Granted		2,276		$	9.09
Exercised		(1,464	)	$	2.14
Forfeited		(83	)	$	5.69
Outstanding, March 31, 2015		20,285		$	5.15		6.55	$	136,489
Vested and expected to vest, March 31, 2015		19,937		$	5.11		6.51	$	134,914
Exercisable, March 31, 2015		14,302		$	4.33		5.53	$	107,983

The aggregate intrinsic value was calculated as the difference between the exercise price of the stock options and the fair value of the underlying common stock.