Stockholders' Equity

6 Months Ended

Jun. 30, 2016

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stockholders' Equity

7. Stockholders’ Equity

The following shares of common stock were reserved for future issuance as of June 30, 2016:

	Total Shares Reserved
2014 Equity Incentive Plan		9,247,174
2014 Employee Stock Purchase Plan		663,667
Total reserved shares of common stock		9,910,841

Restricted Stock Awards

In August 2012 and March 2013, our chief executive officer and one other Atara employee purchased RSAs with certain vesting conditions. As of June 30, 2016, 1,245,240 of these shares had vested and are reported as shares outstanding in the financial statements. The remaining 90,144 shares are expected to fully vest in 2016. Stock-based compensation expense related to the RSAs is recorded using accelerated graded vesting model and was $0.1 million and $0.3 million for the three months ended June 30, 2016 and 2015, respectively, and $0.2 million and $0.6 million for the six months ended June 30, 2016 and 2015, respectively. The unrecognized stock-based compensation expense related to unvested RSAs was $34,000 as of June 30, 2016 and this expense is expected to be recognized in 2016. The aggregate intrinsic value of unvested RSAs was $2.0 million as of June 30, 2016.

2014 Equity Incentive Plan (2014 EIP)

Our 2014 EIP permits the issuance of options, RSAs, RSUs and other types of awards to employees, directors and consultants.  

In June 2016, our stockholders approved an increase of 4,000,000 shares to the shares reserved for issuance under the 2014 EIP. As of June 30, 2016, a total of 9,247,174 shares of common stock were reserved for issuance under the 2014 Plan, of which 4,370,250 were subject to outstanding options and RSUs and 4,876,924 shares were available for future grant.  

Restricted Stock Awards and Units

The following is a summary of RSA and RSU activity under our 2014 EIP:

	RSAs					RSUs
	Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value
Unvested as of December 31, 2015		48,317		$	0.40		427,605		$	7.86
Granted		—					642,697		$	15.78
Forfeited		—					(44,333	)	$	11.83
Vested		(32,211	)	$	0.40		(103,400	)	$	6.31
Unvested as of June 30, 2016		16,106		$	0.40		922,569		$	13.36
Vested and unreleased							23,582
Outstanding as of June 30, 2016							946,151

As of June 30, 2016, there was $8.9 million of unrecognized stock-based compensation expense related to RSUs that is expected to be recognized over a weighted average period of 1.7 years. The aggregate intrinsic value of the RSUs outstanding as of June 30, 2016 was $21.3 million. Under our RSU net settlement procedures, we withhold shares at settlement to cover the minimum payroll withholding tax obligations. During the six months ended June 30, 2016, we settled 104,653 RSUs, of which 101,355 RSUs were net settled by withholding 3,298 shares.  The value of the RSUs withheld was approximately $53,000 based on the closing price of our common stock on the settlement date. These amounts were remitted to the appropriate taxing authorities and have been reflected as a financing activity in our condensed consolidated statements of cash flows.

Stock Options

The following is a summary of option activity under our 2014 EIP:

	Number of shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2015		3,137,529		$	25.81
Granted		462,600		$	19.99
Exercised		(2,444	)	$	11.82
Forfeited or expired		(173,586	)	$	25.39
Outstanding as of June 30, 2016		3,424,099		$	25.12		6.04	$	7,120
Vested and expected to vest as of June 30, 2016		3,424,099		$	25.12		6.04	$	7,120
Exercisable as of June 30, 2016		702,649		$	22.36		5.60	$	2,451

Aggregate intrinsic value represents the difference between the closing stock price of our common stock on June 30, 2016 and the exercise price of outstanding, in-the-money options. As of June 30, 2016, there was $36.5 million of unrecognized stock-based compensation expense related to stock options that is expected to be recognized over a weighted average period of 3.0 years.  Options for 2,444 and 2,595 shares of our common stock were exercised during the six months ended June 30, 2016 and 2015, with an intrinsic value of $26,000 for each period.

The fair value of each option issued was estimated at the date of grant using the Black-Scholes valuation model. The following table summarizes the weighted-average assumptions used as inputs to the Black-Scholes model, and resulting weighted-average grant date fair values of stock options granted during the period indicated:

	Six months ended June 30, 2016						Six months ended June 30, 2015
	Employees			Consultants			Employees			Consultants
Assumptions:
Expected term (years)		4.5			6.9			4.5			6.9
Expected volatility		68.9	%		66.1	%		71.2	%		70.1	%
Risk-free interest rate		1.4	%		1.7	%		1.3	%		1.6	%
Expected dividend yield		0.0	%		0.0	%		0.0	%		0.0	%
Fair Value:
Weighted-average estimated grant date fair    value per share	$	11.04		$	11.57		$	15.31		$	16.66
Options granted		453,600			9,000			800,099			2,000
Total estimated grant date fair value	$	5,006,000		$	104,000		$	12,248,000		$	33,000

The estimated fair value of stock options that vested during the six months ended June 30, 2016 and 2015 was $6.3 million and $1.1 million, respectively.

2014 Employee Stock Purchase Plan (“2014 ESPP”)

As of June 30, 2016, there were 663,667 shares authorized for issuance under the 2014 ESPP. The 2014 ESPP permits eligible employees to purchase common stock at a discount through payroll deductions during defined offering periods. Eligible employees can purchase shares of the Company’s common stock at 85% of the lower of the fair market value of the common stock at (i) thebeginning of a 12-month offering period, or (ii) at the end of one of the two related 6-month purchase periods. No participant in the 2014 ESPP may be issuedor transferred shares of common stock valued at more than $25,000 per calendar year. In the three months ended June 30, 2016, an offering commenced for the period from June 1, 2016 through May 31, 2017, and the Company recorded $0.1 million stock-based compensation expense. There were no purchases of shares under the 2014 ESPP in the three months ended June 30, 2016.

Stock-based Compensation Expense

Total stock-based compensation expense related to all employee and non-employee awards was as follows:

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015
	(in thousands)				(in thousands)
Research and development	$	2,434	$	1,251	$	4,681	$	2,540
General and administrative		2,701		1,318		5,179		2,513
Total stock-based compensation expense	$	5,135	$	2,569	$	9,860	$	5,053