Stock-based compensation

3 Months Ended

Mar. 31, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

9. Stock-based compensation

In January 2016, the number of shares of common stock available for issuance under the 2013 Stock Option and Incentive Plan (“2013 Plan”) was increased by approximately 1.5 million shares as a result of the automatic increase provision of the 2013 Plan. As of March 31, 2016, the total number of shares of common stock available for issuance under the 2013 Plan was approximately 1.3 million.

Stock-based compensation expense

Stock-based compensation expense by award type was as follows (in thousands):

	Three months ended March 31,
		2016		2015
Stock options	$	8,926	$	4,755
Restricted stock units		1,127		617
Employee stock purchase plan		90		60
	$	10,143	$	5,432

Of the $10.1 million of stock-based compensation expense incurred during the first quarter of 2016, $4.7 million is classified as research and development expense and $5.4 million is classified as general and administrative expense in the condensed consolidated statement of operations and comprehensive loss. Of the $5.4 million of stock-based compensation expense incurred during the first quarter of 2015, $3.2 million is classified as research and development expense and $2.2 million is classified as general and administrative expense in the condensed consolidated statement of operations and comprehensive loss. As of March 31, 2016, the Company had $105.3 million of unrecognized stock-based compensation expense, net of estimated forfeitures, related to unvested stock options, restricted stock units and the employee stock purchase plan, which is expected to be recognized over a weighted-average period of 3.0 years.

In the first quarter of 2016, the Company modified the vesting conditions of stock option awards held by an employee immediately following their separation from the Company. As a result of the modification, the Company recognized $0.3 million of stock-based compensation expense during the three months ended March 31, 2016 within general and administrative expense.

Stock options

The following table summarizes the stock option activity under the Company’s equity award plans (shares in thousands):

	Shares			Weighted-average exercise price per share
Outstanding at December 31, 2015		3,532		$	48.74
Granted		713		$	50.93
Exercised		(33	)	$	14.34
Canceled or forfeited		(108	)	$	28.54
Outstanding at March 31, 2016		4,104		$	49.94
Exercisable at March 31, 2016		1,538		$	24.29
Vested and expected to vest at March 31, 2016		4,017		$	50.48

Options exercisable for less than 0.1 million shares of common stock were exercised during the three months ended March 31, 2016, resulting in total proceeds to the Company of $0.5 million. In accordance with the Company’s equity award plans, the shares were issued from a pool of shares reserved for issuance under the equity award plans.

Restricted stock units

The following table summarizes the restricted stock unit activity under the Company’s equity award plans (shares in thousands):

	Shares			Weighted-average grant date fair value
Unvested balance at December 31, 2015		148		$	65.79
Granted		178		$	50.93
Vested		—		$	—
Forfeited		(6	)	$	30.47
Unvested balance at March 31, 2016		320		$	58.20

Employee stock purchase plan

On June 3, 2013, the Company’s board of directors adopted its 2013 Employee Stock Purchase Plan (“2013 ESPP”), which was subsequently approved by its stockholders and became effective upon the closing of the Company’s IPO on June 24, 2013. The 2013 ESPP authorizes the initial issuance of up to a total of 238,000 shares of the Company’s common stock to participating employees. The first offering period under the 2013 ESPP opened on August 1, 2014. During the three months ended March 31, 2016 and 2015, 9,758 shares and 6,780 shares of common stock were issued under the 2013 ESPP, respectively.