Stock-Based Compensation Plans

9 Months Ended

Sep. 30, 2015

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

9. Stock-Based Compensation Plans

2015 Stock Option Plan

In March 2015, the Company’s board of directors adopted and in April 2015 the Company’s stockholders approved the 2015 Equity Incentive Plan, or the 2015 Plan, which became effective upon the IPO and provides for the granting of incentive stock options, nonstatutory stock options, and other forms of stock awards to its employees, directors and consultants.

The 2015 Plan is administered by the Board of Directors or a committee appointed by the Board of Directors, which determines the types of awards to be granted, including the number of shares subject to the awards, the exercise price and the vesting schedule. The exercise price of incentive stock options and nonqualified stock options will be no less than 100% of the fair value per share of the Company’s common stock on the date of grant. If an individual owns capital stock representing more than 10% of the voting shares, the price of each share will be at least 110% of the fair value on the date of grant. Options expire after 10 years (five years for stockholders owning greater than 10% of the voting stock). The number of shares of common stock reserved for issuance under the 2015 Plan is 6,134,292 shares with an automatic annual increase to the shares issuable under the 2015 Plan to the lower of (i) 4% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, or (ii) a lower number determined by the Board of Directors.

2009 Stock Incentive Plan

The Company’s 2009 Stock Incentive Plan, or the 2009 Plan, terminated on the date the 2015 Plan was adopted. Options granted or shares issued under the 2009 Plan that were outstanding on the date the 2015 Plan became effective will remain subject to the terms of its plan. Prior to the 2009 Plan termination, the number of options available for grant was increased by 360,000 shares. At September 30, 2015, 8,760,285 options under the 2009 Plan remained outstanding.

Stock option activity under the Company’s 2015 Plan and 2009 Plan was as follows:

				Options Outstanding
	Shares Available for Grant			Number of Options			Weighted- Average Exercise Price		Aggregate Intrinsic Value
									(In thousands)
Balance – December 31, 2014		3,154,755			5,970,382		$	0.80
Authorized		6,494,292			—
Granted		(4,308,197	)		4,308,197		$	7.23
Exercised		—			(293,250	)	$	0.61
Canceled		96,474			(96,474	)	$	1.74
Balance – September 30, 2015		5,437,324			9,888,855		$	3.60	$	161,161
Options exercisable – September 30, 2015					4,536,982		$	1.23	$	82,455
Options vested and expected to vest – September 30, 2015					9,400,157		$	3.53	$	153,714

2015 Employee Stock Purchase Plan

In March 2015, the Company’s board of directors adopted and in April 2015 the Company’s stockholders approved the 2015 Employee Stock Purchase Plan, or 2015 ESPP, which became effective upon the IPO. The 2015 ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Code, and is administered by the Company’s board of directors and the Compensation Committee of the board of directors.

Stock-based Compensation Expense

Total stock-based compensation expense recognized was as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Research and development	$	499	$	54	$	1,250	$	135
General and administrative		1,388		110		3,982		233
Total stock-based compensation expense	$	1,887	$	164	$	5,232	$	368

In determining the fair value of the stock-based awards, the Company uses the Black-Scholes option-pricing model. The fair value of stock-based awards granted to employees during the nine months ended September 30, 2015 was estimated at the date of grant using the following assumptions:

	2015 Plan	2015 ESPP
Expected term (in years)	5.3 - 6.1	0.5
Volatility	70.2% - 82.8%	71.7%
Risk-free interest rate	1.38% - 1.93%	0.1%
Dividend yield	—%	—%