9. Stock-Based Compensation

Common Stock Option Plans

The Company has three common stock option plans adopted in 2013, 2007 and 2004 (the “Plans”) which authorize the grant of up to 11,800,000 common stock options to employees, directors, and consultants. Additionally, on June 14, 2017, the Company adopted its 2017 Omnibus Incentive Plan and 2017 Employee Stock Purchase Plan (the “2017 Plans”). Under the 2017 Plans, 5,200,000 shares of common stock were reserved for future issuance to employees, directors, and consultants, including 1,000,000 reserved for the Employee Stock Purchase Plan (“ESPP”), which was established at the time of the IPO but under which no shares have yet been issued.

Stock Options

The total fair value of stock options vested and recorded as compensation expense during the three months ended September 30, 2018 and 2017, and nine months ended September 30, 2018 and 2017 was $2.3 million, $2.3 million, $7.6 million, and $5.7 million, respectively. As of September 30, 2018, $20.0 million of unrecognized cost related to non-vested stock options was expected to be recognized over a weighted-average period of approximately 1.9 years. The total intrinsic value of options exercised was approximately $6.5 million and $1.6 million for the nine months ended September 30, 2018 and 2017, respectively.

The following table summarizes the status of the Company’s stock option activity granted under the Plans to employees, directors, and consultants (in thousands, except stock option amounts and exercise price):

	Stock Options			Weighted- Average Exercise price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at December 31, 2017		10,176,643		$	7.19		6.83	$	88,615
Granted		1,411,650			17.25
Exercised		(607,655	)		5.59
Forfeited and expired		(194,135	)		10.77
Outstanding at September 30, 2018		10,786,503		$	8.53		6.64	$	75,562
Vested and exercisable at September 30, 2018		7,808,020		$	6.51		5.80	$	70,511

The Company determines the fair value of stock-based awards on the grant date using the Black-Scholes option pricing model, which is impacted by assumptions regarding a number of highly subjective variables. The following table summarizes the weighted-average assumptions used as inputs to the Black-Scholes model during the periods indicated:

	Nine Months Ended			Nine Months Ended
	September 30, 2018			September 30, 2017
Weighted average grant date fair value	$	9.87		$	6.90
Expected dividend yield		—	%		—	%
Expected stock price volatility		59	%		66	%
Risk-free interest rate		2.60	%		1.74	%
Expected life of options (in years)		6.1			6.2

Restricted Stock

Restricted stock grants cliff vest on the anniversaries of their grant dates. During the nine months ended September 30, 2018, 240,000 restricted shares were vested and as of September 30, 2018, no restricted shares remained unvested.

Employee Stock Purchase Plan

The ESPP is available to eligible employees as defined in the plan document. Under the ESPP, shares of the Company’s common stock may be purchased at a discount (15%) of the lesser of the closing price of the Company’s common stock on the first trading or the last trading day of the offering period. The current offering period extends from July 1, 2018 to November 30, 2018. The Company expects to offer 6-month offering periods after the current period. The 2017 Plans reserved 1,000,000 shares of common stock for issuance under the ESPP. Stock-based compensation related to the ESPP amounted to $0.1 million for the three and nine months ended September 30, 2018 and $0 for all preceding periods.

Stock-Based Compensation Cost

The components of stock-based compensation and the amounts recorded within research and development expenses and selling, general, and administrative expenses in the Company’s consolidated statements of operations and comprehensive loss consisted of the following for the three and nine months ended September 30, 2018 and 2017 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Stock options	$	2,316	$	2,349	$	7,558	$	5,690
Vesting of restricted stock grants		6		540		1,007		1,620
Stock awarded to directors and officers		—		—		—		4,400
Employee stock purchase plan		94		—		94		—
Total stock-based compensation expense	$	2,416	$	2,889	$	8,659	$	11,710
Cost of sales	$	64	$	48	$	164	$	96
Research and development expenses		688		567		1,915		1,475
Selling, general, and administrative expenses		1,664		2,274		6,580		10,139
Total stock-based compensation expense	$	2,416	$	2,889	$	8,659	$	11,710