STOCK-BASED COMPENSATION

We recorded and allocated employee stock-based compensation expense for our equity incentive plans and our 2000 Employee Stock Purchase Plan (“ESPP”) as follows (in thousands):



	Three Months Ended March 31,
	2018		2017
Research and development	$	3,033	$	1,478
Selling, general and administrative	6,272		3,235
Total stock-based compensation	$	9,305	$	4,713

We have several equity incentive plans under which we have granted stock options and restricted stock units (“RSUs”) to employees, directors and consultants. At March 31, 2018, 19,972,317 shares were available for grant under our equity incentive plans.

We use the Black-Scholes Merton option pricing model to value our stock options and ESPP purchases. The weighted average grant-date fair value per share of our stock options and ESPP purchases was as follows:



	Three Months Ended March 31,
	2018		2017
Stock options	$	11.52	$	9.92
ESPP	$	7.39	$	3.71

The grant-date fair value of employee stock option grants and ESPP purchases was estimated using the following assumptions:



	Three Months Ended March 31,
	2018		2017
Stock options:
Risk-free interest rate	2.40	%	1.62	%
Dividend yield	—	%	—	%
Volatility	54	%	64	%
Expected life	4.0 years		4.0 years
ESPP:
Risk-free interest rate	1.53	%	0.62	%
Dividend yield	—	%	—	%
Volatility	53	%	68	%
Expected life	6 months		6 months

We considered our implied volatility and our historical volatility in developing our estimates of expected volatility. The assumptions for the expected life of stock options were based on historical exercise patterns and post-vesting termination behavior.

The fair value of RSUs was based on the closing price of the underlying common stock on the date of grant.

Stock option activity for the three months ended March 31, 2018 was as follows (dollars in thousands, except per share amounts):



	Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Options outstanding at December 31, 2017	22,208,446		$	6.83
Granted	293,580		$	25.72
Exercised	(288,196	)	$	6.69
Forfeited	(18,484	)	$	12.04
Options outstanding at March 31, 2018	22,195,346		$	7.08	3.86 years	$	339,631
Exercisable at March 31, 2018	16,497,014		$	4.66	3.30 years	$	288,535

As of March 31, 2018, $38.8 million of unrecognized compensation expense related to unvested stock options will be recognized over a weighted-average period of 2.47 years.

RSU activity for the three months ended March 31, 2018 was as follows (dollars in thousands, except per share amounts):



	Shares		Weighted Average Grant Date Fair Value Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
RSUs outstanding at December 31, 2017	3,762,990		$	17.76
Awarded	146,790		$	25.72
Vested and released	(197,884	)	$	6.30
Forfeited	(24,494	)	$	17.89
RSUs outstanding at March 31, 2018	3,687,402		$	18.69	1.83 years	$	81,676

As of March 31, 2018, $60.0 million of unrecognized compensation expense related to unvested RSUs will be recognized over a weighted-average period of 3.05 years.