Stock-based Compensation

The Company recorded stock-based compensation expense related to stock options and shares issued under the Company's 2017 Employee Stock Purchase Plan (2017 Plan) in the following expense categories of its accompanying consolidated statements of operations for the three and six months ended June 30, 2019 and 2018:



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Cost of product sales	$	26	$	2	$	45	$	3
Research and development	284		166		527		405
General and administrative	2,387		1,932		4,545		3,715
	$	2,697	$	2,100	$	5,117	$	4,123

In addition, stock-based compensation expense of $22 and $38 was charged to inventory and prepaid expenses and other assets, respectively, during the six months ended June 30, 2019, which represents the total stock-based compensation expense incurred related to employees involved in the manufacturing process of finished goods and samples during the period.

Stock Options

The Company has issued serviced-based and performance-based stock options that generally have a contractual life of up to 10 years and may be exercisable in cash or as otherwise determined by the Company's board of directors. Vesting generally occurs over a period of not greater than four years. Performance-based options may vest upon the achievement of certain milestones in connection with the Company's development programs. Additionally, the Company has issued stock options in excess of the fair market value of Common Stock on the issuance date that were only exercisable upon a change in control or upon or after an initial public offering. As of June 30, 2019, all of the performance conditions related to performance-based stock options issued by the Company have been achieved.

The following table summarizes the activity related to stock option grants to employees and nonemployees for the six months ended June 30, 2019:



	Shares		Weighted average exercise price per share		Weighted average remaining contractual life
Outstanding at December 31, 2018	6,182,873		$	10.60	6.67
Granted	2,013,173		7.73
Exercised	(93,587	)	3.98
Expired	—		—
Forfeited	(119,089	)	11.34
Outstanding at June 30, 2019	7,983,370		$	9.94	6.89
Exercisable at June 30, 2019	4,208,609		$	9.07	5.01
Vested and expected to vest at June 30, 2019	7,983,370		$	9.94	6.89

During the six months ended June 30, 2019, stock options to purchase 2,013,173 shares of Common Stock were granted to employees and directors and generally vest over four years. The stock options had an estimated weighted average grant date fair value of $4.80. During the six months ended June 30, 2018, stock options to purchase 358,192 shares of Common Stock were granted to employees that generally vest over four years. The stock options had an estimated weighted average grant date fair value of $13.26.

The grant date fair value of each stock option grant was estimated at the time of grant using the Black-Scholes option-pricing model using the following weighted average assumptions:



	Six Months Ended June 30,
	2019			2018
Risk free interest rate	2.51		%	2.69		%
Expected term (in years)	6.05			5.90
Expected volatility	67.02		%	74.92		%
Annual dividend yield	0.00		%	0.00		%
Fair value of common stock	$	7.73		$	19.98

The following table summarizes the activity related to restricted stock units (RSUs) granted to employees for the six months ended June 30, 2019:



	Shares
Balance at December 31, 2018	—
Granted	20,600
Vested and settled	—
Expired/ forfeited/ canceled	—
Balance at June 30, 2019	20,600
Expected to vest at June 30, 2019	20,600

In April 2019, the Company granted 20,600 RSUs at a price of $10.20, which vest over four years.

At June 30, 2019, the unrecognized compensation cost related to unvested stock options and RSUs expected to vest was $24,690. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 2.76 years.

2017 Employee Stock Purchase Plan

Under the 2017 Plan, shares of Common Stock may be purchased by eligible employees who elect to participate in the 2017 Plan at 85% of the lower of the fair market value of Common Stock on the first or last day of designated offering periods. The Company recognized stock-based compensation expense of $114 and $123 during the three months ended June 30, 2019 and 2018, respectively, and $228 and $279 during the six months ended June 30, 2019 and 2018, respectively, related to the 2017 Plan.

The Company issued 53,137 and 31,892 shares of Common Stock related to the offering periods ended June 30, 2018 and December 31, 2018, respectively. The Company issued 77,909 shares of Common Stock related to the offering period ended June 30, 2019.