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Stock award plan | 6 Months Ended
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Jun. 30, 2020
Share-based Payment Arrangement [Abstract] |
Stock award plan | Stock award plan On March 5, 2013, the Company’s Board of Directors approved the 2013 Stock Incentive Plan, which provides for the granting of stock option awards, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards in the aggregate of 739,937 shares of common stock. On March 5, 2013, the Company's Board of Directors approved a grant of 735,324 shares of restricted stock and 4,613 stock options. There are no additional shares available for issuance under this plan. In 2009, the Company’s shareholders approved the 2009 Equity and Long-Term Incentive Plan, which provides for the granting of stock option awards, restricted stock awards, and other stock-based and cash-based awards, subject to certain adjustments and annual increases. In May 2013, the Company’s Board of Directors and stockholders increased by 2,500,000 the number of shares authorized under the 2009 Equity and Long Term Incentive Plan, which provides for the granting of stock option awards, restricted stock awards, and other stock-based and cash-based awards. There are no additional shares available for issuance under this plan. In May 2013, the Company’s Board of Directors and stockholders approved the 2013 Long Term Incentive Plan, which became effective upon the closing of the Company’s initial public offering. The 2013 Long Term Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards and other stock-based awards. The number of shares of common stock reserved for issuance under the 2013 Long Term Incentive Plan is the sum of (1) 122,296 shares of common stock available for issuance under the Company’s 2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan, (2) the number of shares (up to 3,040,444 shares) equal to the sum of the number of shares of common stock subject to outstanding awards under the Company’s 1998 Employee, Director and Consultant Stock Option Plan, 2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right plus (3) an annual increase, to be added on the first day of each fiscal year until the expiration of the 2013 Long Term Incentive Plan, equal to the lowest of 2,500,000 shares of common stock, 4% of the number of shares of common stock outstanding on the first day of the fiscal year and an amount determined by the Company’s Board of Directors. As of June 30, 2020, awards for 914,406 shares of common stock are available for issuance under the 2013 Long Term Incentive Plan. In January 2020, the Company's Board of Directors approved the 2020 Inducement Stock Incentive Plan. The 2020 Inducement Stock Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards and other stock-based awards for up to an aggregate of 1,000,000 shares of common stock. Any grants made under the 2020 Inducement Stock Incentive Plan must be made pursuant to the Nasdaq Listing Rule 5635(c)(4) inducement grant exception as a material component of the Company's new hires’ employment compensation. As of June 30, 2020, awards for 442,880 shares of common stock are available for issuance under the 2020 Inducement Stock Incentive Plan. From January 1, 2020 through June 30, 2020, the Company issued a total of 2,515,200 stock options to various employees. Of those, 542,450 were inducement grants for non-statutory stock options, all of which were made pursuant to the 2020 Inducement Stock Incentive Plan. A summary of stock option activity is as follows:
|  | Number of options |  | Weighted- average exercise price |  | Weighted- average remaining contractual term |  | Aggregate intrinsic value (in thousands)
Outstanding at December 31, 2019 |  | 11,043,939 |  |  | $ | 31.67 |  |  |  |  |
Granted |  | 2,515,200 |  |  | $ | 50.98 |  |  |  |  |
Exercised |  | (1,034,288) |  |  | $ | 24.21 |  |  |  |  |
Forfeited/Cancelled |  | (570,167) |  |  | $ | 42.27 |  |  |  |  |
Outstanding at June 30, 2020 |  | 11,954,684 |  |  | $ | 35.84 |  |  | 7.48 years |  | $ | 183,488 |
Vested or Expected to vest at June 30, 2020 |  | 5,690,848 |  |  | $ | 39.16 |  |  | 8.86 years |  | $ | 66,986 |
Exercisable at June 30, 2020 |  | 5,512,252 |  |  | $ | 31.61 |  |  | 5.85 years |  | $ | 110,222 |
The fair value of grants made in the six months ended June 30, 2020 was contemporaneously estimated on the date of grant using the following assumptions:
|  | Six months ended June 30, 2020
Risk-free interest rate |  | 0.40% - 1.45%
Expected volatility |  | 87.50% - 89.31%
Expected term |  | 5.75 years
The Company assumed no expected dividends for all grants. The weighted average grant date fair value of options granted during the six month period ended June 30, 2020 was $36.95 per share. The expected term of options was estimated based on the Company's historical exercise data and the expected volatility of options was estimated based on the Company's historical stock volatility. The risk-free rate of the options was based on U.S. Government Securities Treasury Constant Maturities yields at the date of grant for a term similar to the expected term of the option. Restricted Stock Awards and Restricted Stock Units—Restricted stock awards and restricted stock units are granted subject to certain restrictions, including in some cases service or time conditions (restricted stock). The grant-date fair value of restricted stock awards and restricted stock units, which have been determined based upon the market value of the Company’s shares on the grant date, are expensed over the vesting period. The following table summarizes information on the Company’s restricted stock awards and units:
|  | Restricted Stock Awards and Units |  |
|  | Number of Shares |  | Weighted Average Grant Date Fair Value
January 1, 2020 |  | 642,419 |  |  | $ | 24.50 |
Granted |  | 589,070 |  |  | $ | 49.67 |
Vested |  | (229,076) |  |  | $ | 23.53 |
Forfeited |  | (65,491) |  |  | $ | 36.11 |
Unvested at June 30, 2020 |  | 936,922 |  |  | $ | 39.97 |
Stock Appreciation Rights—SARs entitle the holder to receive, upon exercise, an amount of the Company's common stock or cash (or a combination thereof) determined by reference to appreciation, from and after the date of grant, in the fair market value of a share of the Company's common stock over the measurement price based on the exercise date. In May 2016, a total of 897,290 SARs were granted to non-executive employees (the "2016 SARs"). The 2016 SARs vested annually in equal installments over four years and were settled in cash on each vest date, which required the Company to remeasure the SARs at each reporting period until vesting occurs. For the six month period ended June 30, 2020, a total of 132,136 SARs vested. The last payment of the SARs liability was made in the three month period ended March 31, 2020, and accordingly, the balance of the SARS liability as of June 30, 2020 was $0. Employee Stock Purchase Plan—In June 2016, the Company established an Employee Stock Purchase Plan (“ESPP” or the "Plan”) for certain eligible employees. The Plan is administered by the Company’s Board of Directors or a committee appointed by the Company's Board of Directors. The total number of shares available for purchase under the Plan is one million shares of the Company’s common stock. Employees may participate over a six month period through payroll withholdings and may purchase, at the end of the six month period, the Company’s common stock at a purchase price of at least 85% of the closing price of a share of the Company’s common stock on the first business day of the offering period or the closing price of a share of the Company’s common stock on the last business day of the offering period, whichever is lower. No participant will be granted a right to purchase the Company’s common stock under the Plan if such participant would own more than 5% of the total combined voting power of the Company or any subsidiary of the Company after such purchase. For the three and six month periods ended June 30, 2020, the Company recorded $0.3 million and $0.7 million in compensation expense related to the ESPP. The Company recorded share-based compensation expense in the statement of operations related to incentive stock options, nonstatutory stock options, restricted stock awards, restricted stock units and the ESPP as follows:
|  | Three Months Ended June 30, |  |  |  | Six Months Ended June 30, |  |
|  | 2020 |  | 2019 |  | 2020 |  | 2019
Research and development |  | $ | 8,562 |  |  | $ | 5,516 |  |  | $ | 16,741 |  |  | $ | 10,203 |
Selling, general and administrative |  | 8,348 |  |  | 5,404 |  |  | 15,389 |  |  | 9,981 |
Total |  | $ | 16,910 |  |  | $ | 10,920 |  |  | $ | 32,130 |  |  | $ | 20,184 |
As of June 30, 2020, there was approximately $187.2 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the 2009 Equity and Long Term Incentive Plan, the 2013 Long Term Incentive Plan and equity awards made pursuant to the Nasdaq Listing Rule 5635(c)(4) inducement grant exception for new hires. This cost is expected to be recognized as share-based compensation expense over the weighted average remaining service period of approximately 3.08 years.

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