7. Stock‑Based Awards

2015 Equity Incentive Plan

On September 15, 2015, the Company’s board of directors adopted the 2015 Equity Incentive Plan (the “2015 Plan”), and on September 16, 2015, the Company’s stockholders approved the 2015 Plan. The 2015 Plan became effective in connection with the Company’s IPO in October 2015. At the time the 2015 Plan became effective, no further grants may be made under the Company’s 2012 Equity Compensation Plan, as amended and restated (the “2012 Plan”). The 2015 Plan provides for the grant of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, RSUs, performance stock awards, cash based awards and other stock-based awards. The number of shares initially reserved for the issuance of awards under the 2015 Plan was 1,643,872. The number of shares of common stock that may be issued under the 2015 Plan will automatically increase on January 1 of each year, beginning on January 1, 2016 and ending on January 1, 2025, in an amount equal to the lesser of (i) 4.0% of the shares of the Company’s common stock outstanding on December 31 of the preceding calendar year or (ii) an amount determined by the Company’s board of directors. The shares of common stock underlying any awards that expire, are otherwise terminated, settled in cash or repurchased by the Company under the 2015 Plan and the 2012 Plan will be added back to the shares of common stock available for issuance under the 2015 Plan. As of December 31, 2016, 607,556 shares remained available for grant under the 2015 Plan. As of January 1, 2017, the number of shares of common stock available for issuance under the 2015 Plan was automatically increased by 1,042,367 shares. The 2015 Plan is administered by the Company’s board of directors or, at the discretion of the board of directors, by a committee of the board. The exercise prices, vesting and other restrictions are determined at the discretion of the board of directors, except that the exercise price per share of stock options may not be less than 100% of the fair market value of the share of common stock on the date of grant and the term of stock options may not be greater than ten years. The Company has granted stock‑based awards that vest subject to the satisfaction of a service requirement (“service‑based awards”), as well as awards that vest subject to the satisfaction of specific performance-based conditions (“performance-based awards”).

2012 Equity Compensation Plan

Upon the 2015 Plan becoming effective, no further grants can be made under the 2012 Plan. The Company granted a total of 1,140,524 stock options under the 2012 Plan, of which 1,049,667 and 1,140,524 were outstanding as of December 31, 2016, and 2015, respectively. Stock options granted under the 2012 Plan vest over four years and expire after ten years. As required, the exercise price for the stock options granted under the 2012 Plan was not less than the fair value of common shares as determined by the Company as of the date of grant.

Stock Option Valuation

The weighted average assumptions the Company used to estimate the fair value of stock options granted during the years ended December 31, 2016, 2015 and 2014 were as follows:


	Year Ended December 31,
	2016		2015		2014

Risk-free interest rate	2.06	%	1.78	%	1.87	%
Expected term (in years)	6.5		6.3		6.4
Expected volatility	94.86	%	93.90	%	113.90	%
Expected dividend yield	0	%	0	%	0	%

The Company recognizes compensation expense for awards over their vesting period. Compensation expense for awards includes the impact of forfeiture in the period when they occur.

Stock Options

The following table summarizes stock option activity for the years ended December 31, 2016, 2015 and 2014:


					Weighted
			Weighted		Average
			Average		Remaining	Aggregate
	Number		Exercise		Contractual	Intrinsic
	of Shares		Price		Term	Value
					(in years)
Outstanding as of December 31, 2013	—			—	—		—
Granted	500,262		$	1.22
Exercised	—			—
Forfeited and canceled	—			—
Outstanding as of December 31, 2014	500,262			1.22	9.77	$	305
Granted	1,238,262			18.08
Exercised	—			—
Forfeited and canceled	—			—
Outstanding as of December 31, 2015	1,738,524			13.23	9.51		24,722
Granted	1,083,919			27.12
Exercised	(51,980)			2.37
Forfeited and canceled	(68,113)			15.71
Outstanding as of December 31, 2016	2,702,350		$	18.94	9.05	$	24,434
Options vested and expected to vest as of December 31, 2016	2,702,350		$	18.94	9.05	$	24,434
Options exercisable as of December 31, 2016	575,149	(1)	$	10.93	8.42	$	9,512

(1)

All options granted under the 2012 Plan are exercisable immediately, subject to a repurchase right in the Company’s favor that lapses as the option vests. This amount reflects the number of shares under options that were vested, as opposed to exercisable, as of December 31, 2016.

The weighted average grant date fair value of stock options granted during the years ended December 31, 2016, 2015 and 2014 was $21.16, $13.84 and $1.38 per share, respectively.

The intrinsic value of a stock option is calculated as the difference between the exercise price of the stock option and the fair value of the underlying common stock, and cannot be less than zero.

Restricted Stock Units

The following table summarizes RSU activity for the years ended December 31, 2016 and 2015. The Company did not grant RSUs during the year ended December 31, 2014.


		Weighted
		Average
		Grant Date
	Number	Fair Value
	of Shares	Per Share
Outstanding as of December 31, 2014	—		—
Granted	53,800	$	28.68
Vested	—
Forfeited and cancelled	—
Outstanding as of December 31, 2015	53,800		28.68
Granted	180,764		27.16
Vested	(12,950)		28.68
Forfeited and cancelled	(2,000)		28.68
Outstanding as of December 31, 2016	219,614	$	27.43

Stock‑Based Compensation

The following table summarizes stock-based compensation expense recorded by the Company for the years ended December 31, 2016, 2015 and 2014:



	Year Ended December 31,
	2016		2015		2014
Research and development	$	2,291	$	257	$	10
General and administrative		3,813		634		17
	$	6,104	$	891	$	27

As of December 31, 2016, the Company had unrecognized stock‑based compensation expense for stock options and RSUs of $34,349 and $5,790, respectively, which is expected to be recognized over weighted average periods of 3.49 years and 2.83 years, respectively.