10 Share-based compensation

Share-based compensation expense recognized by classification included in the consolidated statements of operations and comprehensive loss was as follows:


	Three months ended March 31,
	2018		2017
	in thousands
Research and development	$	806	$	687
Selling, general and administrative		1,721		918
Total	$	2,527	$	1,605

Share-based compensation expense recognized by award type was as follows:


	Three months ended March 31,
	2018		2017
	in thousands
Award type
Share options	$	1,059	$	826
Restricted share units (“RSUs”)		746		516
Performance share units (“PSUs”)		722		263
Total	$	2,527	$	1,605

As of March 31, 2018, the unrecognized compensation costs related to unvested awards under the various share-based compensation plans were:



			Weighted-average
	Unrecognized		remaining
	compensation		period for
	costs		recognition
Award type	in thousands		in years
Share options	$	12,641	3.20
Restricted share units		5,706	2.17
Performance share units		7,073	2.19
Total	$	25,420	2.68

The Company satisfies the exercise of share options and vesting of RSUs and PSUs through newly issued shares.

The Company’s share-based compensation plans include the 2014 Amended and Restated Share Option Plan (the “2014 Plan”) and inducement grants under Rule 5653(c)(4) of the NASDAQ Global Select Market with terms similar to the 2014 Plan. The Company previously had a 2012 Equity Incentive Plan (“2012 Plan”). As of March 31, 2018, 63,818 fully vested share options are outstanding (December 31, 2017: 72,818) under the 2012 Plan.

Share options

The following table summarizes option activity for the three months ended March 31, 2018:



		Weighted average
	Options	exercise price

Outstanding at December 31, 2017	2,456,433	$	10.06
Granted	614,637	$	20.11
Forfeited	(50,102)	$	10.13
Expired	(8,921)	$	14.00
Exercised	(135,572)	$	11.27
Outstanding at March 31, 2018	2,876,475	$	12.14

Fully vested and exercisable at March 31, 2018	937,773	$	11.58
Outstanding and expected to vest at March 31, 2018	1,938,702	$	12.41

Total weighted average grant date fair value of options issued during the period (in $ million)		$	7.3
Granted to directors and officers during the period (options, $ in million)	221,961	$	2.5
Proceeds from option sales (in $ million)		$	1.6

Share options are granted on the date of grant and, except for certain grants made to non-executive directors, vest over a period of four years, the first 25% vests after one year from the initial grant date and the remainder vests in equal quarterly installments, straight-line over years two, three and four. Certain grants to non-executive directors vest in full after one year. Any options that vest must be exercised by the tenth anniversary of the initial grant date.

The fair value of each option issued was estimated at the date of grant using the Hull & White option pricing model with the following weighted-average assumptions:


	Three months ended March 31,
	2018		2017

Expected volatility		75%		75%
Expected terms (in years)		10 years		10 years
Risk free interest rate		2.77% - 2.99%		2.53% - 2.70%
Expected dividends		0%		0%

Restricted Share Units (RSUs)

The following table summarizes the RSUs activity for the three months ended March 31, 2018:


		RSU
			Weighted average
			grant-date fair
	Number of shares		value
Non-vested at December 31, 2017		683,663	$	6.38
Granted		207,599	$	19.39
Vested		(218,500)	$	6.11
Forfeited		(10,950)	$	9.26
Non-vested at March 31, 2018		661,812	$	10.51

Total fair value of RSUs awarded during the period (in million)			$	4.0
Granted to directors and officers during the period (shares, $ in million)		98,808	$	1.9

RSUs vest over one to three years. RSUs granted in March 2017 to the Company’s Chief Executive Officer will vest equally over two years from the date of grant and RSUs granted to non-executive directors will vest one year from the date of grant.

Performance Share Units (PSUs)

The following table summarizes the PSUs activity for the three months ended March 31, 2018:


		PSU
			Weighted average
			grant-date fair
	Number of shares		value
Non-vested at December 31, 2017		511,074	$	16.73
Granted		—
Vested		(68,115)	$	15.79
Forfeited		—	$
Non-vested at March 31, 2018		442,959	$	16.83
PSUs awarded but not yet earned		117,197	$	23.50
Total non-vested and discretionary PSUs		560,156	$	18.23

Total weighted average grant date fair value of PSUs awarded during the period (in million)			$	2.8

In January 2018, the Company awarded PSUs to its executives and other members of senior management. These PSUs are earned based on the Board’s assessment of the level of achievement of agreed upon performance targets through December 31, 2018.