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Equity Plans | 12 Months Ended
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Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Equity Plans | 12. Equity Plans Equity Incentive Plan In May 2007, the Company established its 2007 Stock Option and Incentive Plan (the “2007 Plan”) which provides for the granting of stock options to employees and consultants of the Company. Options granted under the 2007 Plan may be either incentive stock options (ISOs) or nonqualified stock options (NSOs). ISOs may be granted only to Company employees (including officers and directors who are also employees). NSOs may be granted to Company employees and consultants. Options under the 2007 Plan have a term of ten years and generally vest over a four-year period with one-year cliff vesting. In July 2016, the Company’s board of directors and stockholders approved the 2016 Equity Incentive Plan (the “2016 Plan”) to replace the 2007 Stock Option Plan and became effective upon the IPO. The 2016 Plan is administered by the Board of Directors or a committee appointed by the Board of Directors, which determines the types of awards to be granted, including the number of shares subject to the awards, the exercise price and the vesting schedule. Under the 2016 Plan, 1,200,000 shares of the Company’s common stock have been initially reserved for the issuance of stock options, restricted stock units and other awards to employees, directors and consultants. Options granted under the 2016 Plan expire no later than 10 years from the date of grant. The exercise price of each option may not be less than 100% of the fair market value of the common stock at the date of grant. Options may be granted to stockholders possessing more than 10% of the total combined voting power of all classes of stocks of the Company at an exercise price at least 110% of the fair value of the common stock at the date of grant and the options are not exercisable after the expiration of 10 years from the date of grant. Employee stock options generally vest 25% upon one year of continued service to the Company, with the remainder in monthly increments over three additional years. Upon adoption of the 2016 Plan, no additional stock awards will be issued under the 2007 Stock Option Plan. Options granted under the 2007 Stock Option Plan that were outstanding on the date the 2016 plan became effective remain subject to the terms of the 2007 Stock Option Plan. The number of options available for grant under the 2007 Plan was ceased and the number was added to the common stock reserved for issuance under the 2016 Plan. As of December 31, 2016, the Company has reserved 1,200,000 shares of common stock for issuance under the 2016 Plan. Stock Options Activity under the Company’s equity incentive plans is set forth below:
|  |  |  |  |  |  |  | Options Outstanding |
|  | Options Available for Grant |  |  | Options Outstanding |  |  | Weighted- Average Exercise Price Per Share |  |  | Weighted- Average Remaining Contractual Life (years) |  |  | Aggregate Intrinsic Value |
|  |  |  |  |  |  |  |  |  |  |  |  |  | (in thousands) |
Balances at December 31, 2013 |  |  | 70,082 |  |  |  | 284,879 |  |  | $ | 1.10 |  |  |  | 7.92 |  |  |  |  |
Additional options authorized |  |  | 240,425 |  |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |
Options granted |  |  | (199,519 | ) |  |  | 199,519 |  |  |  | 1.83 |  |  |  |  |  |  |  |  |
Options exercised |  |  | — |  |  |  | (2,548 | ) |  |  | 1.30 |  |  |  |  |  |  |  |  |
Options forfeited |  |  | 5,844 |  |  |  | (5,844 | ) |  |  | 1.13 |  |  |  |  |  |  |  |  |
Balances at December 31, 2014 |  |  | 116,832 |  |  |  | 476,006 |  |  |  | 1.40 |  |  |  | 8.04 |  |  |  |  |
Additional options authorized |  |  | 431,411 |  |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |
Options granted |  |  | (408,623 | ) |  |  | 408,623 |  |  |  | 1.24 |  |  |  |  |  |  |  |  |
Options exercised |  |  | — |  |  |  | (43,852 | ) |  |  | 1.30 |  |  |  |  |  |  |  |  |
Options forfeited |  |  | 7,599 |  |  |  | (7,599 | ) |  |  | 1.40 |  |  |  |  |  |  |  |  |
Balances at December 31, 2015 |  |  | 147,219 |  |  |  | 833,178 |  |  |  | 1.33 |  |  |  | 8.56 |  |  |  |  |
Additional options authorized |  |  | 1,697,088 |  |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |
Options granted |  |  | (1,679,979 | ) |  |  | 1,679,979 |  |  |  | 14.24 |  |  |  |  |  |  |  |  |
Options exercised |  |  | — |  |  |  | (119,328 | ) |  |  | 1.28 |  |  |  |  |  |  |  |  |
Balances at December 31, 2016 |  |  | 164,328 |  |  |  | 2,393,829 |  |  | $ | 10.39 |  |  |  | 8.79 |  |  | $ | 27,820 |
Options exercisable – December 31, 2016 |  |  |  |  |  |  | 492,714 |  |  | $ | 5.19 |  |  |  | 7.70 |  |  | $ | 8,286 |
Options vested and expected to vest – December 31, 2016 |  |  |  |  |  |  | 2,369,135 |  |  | $ | 10.37 |  |  |  | 8.79 |  |  | $ | 27,596 |
The aggregate intrinsic values of options outstanding, exercisable, vested and expected to vest were calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock on December 31, 2016. The aggregate intrinsic value of options exercised was $169,000 for the year ended December 31, 2016. The aggregate intrinsic value of options exercised was immaterial for the years ended December 31, 2015 and 2014, respectively. During the years ended December 31, 2016, 2015, and 2014 the estimated weighted-average grant-date fair value of common stock underlying options granted was $8.20, $0.69, and $0.82 per share, respectively. Employee Stock Options Valuation The fair value of employee and director stock option awards was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions:
|  | Year Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Expected term (in years) |  |  | 4.16 – 5.95 |  |  |  | 5.89 |  |  |  | 6.08 |
Expected volatility |  |  | 62.5 – 64.8 | % |  |  | 59.8 | % |  |  | 64.7 | %
Risk-free interest rate |  |  | 1.27 – 1.79 | % |  |  | 1.57 – 1.58 | % |  |  | 1.89 | %
Dividend yield |  |  | — |  |  |  | — |  |  |  | — |
Prior to the completion of the Company’s IPO, the fair value of the Company’s shares of common stock underlying its stock options had historically been determined by the Company’s Board of Directors. Because there had been no public market for the Company’s common stock prior to August 2016, the Company’s Board of Directors had determined fair value of the common stock at the time of grant of the option by considering a number of objective and subjective factors including important developments in the Company’s operations, valuations performed by an independent third party, sales of redeemable convertible preferred stock, actual operating results and financial performance, the conditions in the biotechnology industry and the economy in general, the stock price performance and volatility of comparable public companies, and the lack of liquidity of the Company’s common stock, among other factors. For stock options granted after the completion of the IPO, the Company’s Board of Directors determined the fair value of each share of underlying common stock based on the closing price of the Company’s common stock as reported on the date of grant. In determining the fair value of the options granted, the Company uses the Black-Scholes option-pricing model and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment to determine. Expected Term—The Company’s expected term represents the period that the Company’s options granted are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term). The Company has very limited historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior for its stock option grants. Expected Volatility—Since the Company does not have a long trading history for its common stock, the expected volatility is estimated based on the average volatility for comparable publicly traded biopharmaceutical companies over a period equal to the expected term of the stock option grants. The comparable companies were chosen based on their similar size, stage in the life cycle or area of specialty. Risk-Free Interest Rate—The risk-free interest rate is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option. Expected Dividend—The Company has never paid dividends on its common stock and has no plans to pay dividends on its common stock. Therefore, the Company used an expected dividend yield of zero. Stock Options Granted to Non-employees Stock-based compensation related to stock options granted to non-employees is recognized as the stock options are earned. The fair value of the stock options granted was calculated at each reporting date using the Black-Scholes option-pricing model with the following assumptions:
|  | Year Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Expected term (in years) |  |  | 6.59 –9.97 |  |  |  | 6.8 |  |  |  | 9.4 |
Expected volatility |  |  | 62.5 – 62.8 | % |  |  | 59.8 | % |  |  | 64.7 | %
Risk-free interest rate |  |  | 1.29 – 1.79 | % |  |  | 1.95 | % |  |  | 2.34 | %
Dividend yield |  |  | — |  |  |  | — |  |  |  | — |
During the years ended December 31, 2016, 2015, and 2014 the Company granted 59,647, 4,816, and 11,805 shares, respectively, to non-employee consultants. The Company recorded stock-based compensation expense during the years ended December 31, 2016, 2015, and 2014 of $505,000, $15,000, and $5,000, respectively. Employee Stock Purchase Plan In July 2016, the Company’s board of directors and stockholders approved the 2016 Employee Stock Purchase Plan (the “2016 ESPP”), which became effective upon the IPO. The 2016 ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended, and is administered by the Company’s board of directors and the Compensation Committee of the board of directors. Under the 2016 ESPP, 150,000 shares of the Company’s common stock have been initially reserved for employee purchases of the Company’s common stock, with an automatic annual increase to the shares issuable under the 2016 ESPP on the first day of each fiscal year for a period of up to 10 years in an amount equal to (i) the lesser of 1% of the total number of shares of common stock outstanding on December 31 of the preceding fiscal year and 300,000 shares of the Company’s common stock, or (ii) a lower number determined by the Board of Directors. The 2016 ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation. At the end of each offering period, employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock at the beginning of the offering period or at the end of each applicable purchase period. The fair value of the rights granted under the 2016 ESPP was calculated using the Black-Scholes option-pricing model with the following assumptions:
|  | Year Ended |
|  | December 31, 2016 |
Expected term (in years) |  |  | 0.60 |
Expected volatility |  |  | 52.48 | %
Risk-free interest rate |  |  | 0.45 | %
Dividend yield |  |  | — |
Stock-Based Compensation Total stock-based compensation expense recognized for both employees and non-employees for stock options and the 2016 ESPP was as follows (in thousands):
|  | Year Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Research and development |  | $ | 1,080 |  |  | $ | 39 |  |  | $ | 17 |
General and administrative |  |  | 1,050 |  |  |  | 60 |  |  |  | 25 |
Total stock-based compensation expense |  | $ | 2,130 |  |  | $ | 99 |  |  | $ | 42 |
As of December 31, 2016 there was $12.6 million of total unrecognized stock-based compensation costs related to stock options that the Company expects to recognize over a period of approximately 3.12 years.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65895303&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68057994&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 14) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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