Stock-Based Compensation

9 Months Ended

Sep. 30, 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 nine months ended September 30, 2015 and 2014, the Company issued options to purchase 3.3 million and 3.7 million shares of common stock, respectively. At September 30, 2015, there were 2.8 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 nine months ended September 30, 2015 were as follows:

	Nine months ended September 30, 2015
Risk-free interest rate		1.5-1.8	%
Expected dividend yield		0	%
Expected term		5.0-5.9 years
Expected volatility		66-67	%

Options granted to employees generally vest over a three year period. The Company recognized stock-based compensation expense as follows for the three and nine months ended September 30, 2015 and 2014:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2015		2014		2015		2014
Employee awards:
Research and development	$	2,116	$	1,663	$	6,451	$	5,185
General and administrative		1,565		1,143		5,519		4,596
Stock-based compensation for employee awards		3,681		2,806		11,970		9,781
Stock-based compensation for non-employee awards		9		44		57		160
Total stock-based compensation	$	3,690	$	2,850	$	12,027	$	9,941

The following table summarizes stock option activity during the nine months ended September 30, 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		3,314		$	9.68
Exercised		(3,080	)	$	2.71
Forfeited		(354	)	$	7.26
Outstanding, September 30, 2015		19,436		$	5.59		6.41	$	60,544
Vested and expected to vest, September 30, 2015		19,113		$	5.54		6.37	$	60,261
Exercisable, September 30, 2015		14,620		$	4.85		5.59	$	54,333

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.