8 Share-based compensation

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 (together the “2014 Plans”). At the annual general meeting of shareholders in June 2018, the Company’s shareholders approved amendments of the 2014 Plan, increasing the shares authorized for issuance by 3,000,000 to a total of 8,601,471. The Company previously had a 2012 Equity Incentive Plan (“2012 Plan”). As of March 31, 2019, 14,000 fully vested share options are outstanding (December 31, 2018: 32,567) under the 2012 Plan.

2014 Plans

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,
	2019		2018
	(in thousands)
Research and development	$	1,980	$	806
Selling, general and administrative		2,298		1,721
Total	$	4,279	$	2,527

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


	Three months ended March 31,
	2019		2018
	(in thousands)
Award type
Share options	$	2,076	$	1,059
Restricted share units (“RSUs”)		930		746
Performance share units (“PSUs”)		1,272		722
Total	$	4,279	$	2,527

As of March 31, 2019, the unrecognized compensation costs related to unvested awards under the 2014 Plans were:



			Weighted-average
	Unrecognized		remaining
	compensation		period for
	costs		recognition
Award type	(in thousands)		(in years)
Share options	$	22,627	3.25
Restricted share units		7,968	2.31
Performance share units		9,661	2.22
Total	$	40,256	2.82

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

Share options

The following table summarizes option activity for the three months ended March 31, 2019:


	Options
	Number of	Weighted average
	shares	exercise price

Outstanding at December 31, 2018	2,673,712	$	15.09
Granted	502,526	$	34.35
Forfeited	(41,479)	$	11.77
Expired	(75)	$	7.49
Exercised	(165,240)	$	12.35
Outstanding at March 31, 2019	2,969,444	$	18.54

Fully vested and exercisable at March 31, 2019	1,176,022	$	11.73
Outstanding and expected to vest at March 31, 2019	1,793,422	$	23.01

Total weighted average grant date fair value of options issued during the period (in $ millions)		$	10.1
Proceeds from option sales during the period (in $ millions)		$	2.0

Share options are priced 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. 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,
Assumptions	2019	2018
Expected volatility	75%	75%
Expected terms (in years)	10 years	10 years
Risk free interest rate	2.80% - 2.87%	2.77% - 2.99%
Expected dividends	0%	0%

Restricted share units

The following table summarizes the RSUs activity for the three months ended March 31, 2019:


		RSU
			Weighted average
			grant-date fair
	Number of shares		value
Non-vested at December 31, 2018		412,321	$	16.49
Granted		145,004	$	33.62
Vested		(165,017)	$	12.41
Forfeited		(13,833)	$	12.25
Non-vested at March 31, 2019		378,475	$	24.99

Total weighted average grant date fair value of RSUs granted during the period (in $ millions)			$	4.9

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

The following table summarizes the PSUs activity for the three months ended March 31, 2019:


		PSU
			Weighted average
			grant-date fair
	Number of shares		value
Non-vested at December 31, 2018		377,169	$	16.73
Granted		132,362	$	31.71
Vested		(23,064)	$	5.76
Non-vested at March 31, 2019		486,467	$	17.80
PSUs awarded but not yet earned		96,389	$	59.65
Total non-vested and discretionary PSUs		582,856	$	24.72

Total weighted average grant date fair value of PSUs awarded during the period (in $ millions)			$	9.9

In January 2019, 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, 2019.

Employee Share Purchase Plan (“ESPP”)

In June 2018 the Company’s shareholders adopted and approved an ESPP allowing the Company to issue up to 150,000 ordinary shares. The ESPP is intended to qualify under Section 423 of the Internal Revenue Code of 1986. Under the ESPP, employees are eligible to purchase ordinary shares through payroll deductions, subject to any plan limitations. The purchase price of the shares on each purchase date is equal to 85% of the lower of the closing market price on the offering date or the closing market price on the purchase date of each three-month offering period. During the three months ended March 31, 2019 3,126 shares were issued. As of March 31, 2019, a total of 144,283 shares remains available for issuance under the ESPP plan.