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Stockholders' Equity | 12 Months Ended
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Dec. 31, 2017
Stockholders' Equity |
Stockholders' Equity | 9. Stockholders' Equity Common Stock and Warrants As of December 31, 2017, the Company was authorized to issue 250 million shares of common stock. Dividends on common stock will be paid when, and if, declared by the board of directors. Each holder of common stock is entitled to vote on all matters that are appropriate for stockholder voting and is entitled to one vote for each share held. As discussed in "— Note 1. Business," On February 15, 2018, the Company announced the pricing of an underwritten offering of 19,354,839 shares of its common stock at $15.50 per shares, resulting in gross proceeds of $300.0 million, before deducting underwriting discounts and commissions and offering expenses payable by the Company. The offering closed on February 21, 2018 and the Company received net proceeds of $282.0 million from the Offering, after deducting underwriting discounts and commissions and offering expenses payable by the Company. The offering is expected to close on February 21, 2018, subject to customary closing conditions. J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC were acting as joint lead book-running managers, Cowen and Leerink Partners were acting as co-book-running managers, and BofA Merrill Lynch was acting as lead co-manager for the offering. As discussed in "— Note 1. Business," in July 2017, the Company entered into the Underwriting Agreement with J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC, as representatives of the several underwriters set forth on Schedule 1 thereto, relating to the Offering. Under the terms of the Underwriting Agreement, the Company issued and sold 21,122,449 shares at a price to the public of $12.25 per share, resulting in gross proceeds of $258.8 million, before deducting underwriting discounts and commissions and offering expenses payable by the Company. The Offering closed on July 18, 2017 and the Company received net proceeds from the Offering, after deducting underwriting discounts and commissions and offering expenses payable by the Company of $243.0 million. As discussed in "— Note 11. Debt Instruments and Related Party Transactions", in December 2016, the Company issued $250 million aggregate principal amount of 3.0% unsecured Convertible Senior Notes due 2023 (the "Convertible Notes), in a private offering. The Notes will mature on December 15, 2023, unless earlier repurchased, redeemed, or converted in accordance with their terms. The Notes are convertible at the option of the holders, under certain circumstances and during certain periods, into cash, shares of the Company's common stock, par value $0.01 per share ("Common Stock"), or a combination thereof. Prior to the close of business on the business day immediately preceding September 15, 2023, the Notes are convertible at the option of the holders of the Notes only under certain conditions. On or after September 15, 2023, until the close of business on the second business day immediately preceding the maturity date, holders of the Notes may convert their Notes at their option at the conversion rate then in effect, irrespective of these conditions. The Company will settle conversions of the Notes by paying or delivering, as the case may be, cash, shares of Common Stock, or a combination of cash and shares of Common Stock, at the Company's election. The conversion rate will initially be 163.3987 shares of Common Stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $6.12 per share of Common Stock). The conversion rate is subject to customary adjustments upon the occurrence of certain events. Beginning in April 2016 and through July 2016, the Company sold 15.0 million shares of Common Stock under an ATM equity program with Cowen and Company, LLC ("Cowen") acting as sales agent. Cowen was compensated at a fixed commission rate up to 3.0%. The ATM sales agreement resulted in net proceeds of $97.1 million, after Cowen's commission of $2.7 million and other expenses of $0.2 million. The Company has completed all sales under the ATM equity program. As discussed in "— Note 11. Debt instruments and Related Party Transactions," the Company issued approximately 1.8 million and 1.3 million of warrants in February 2016 and June 2016, respectively. The closing balance of the warrants was $16.1 million as of December 31, 2016 and is recorded within equity on the Consolidated Balance Sheets. As discussed in "— Note 3. Acquisitions, in July 2016, the Company entered into an Agreement and Plan of Merger (the "MiaMed Agreement") with MiaMed. Under the terms of the MiaMed Agreement, the former holders of MiaMed's capital stock received an aggregate of $6.5 million, comprised of (i) approximately $1.8 million in cash (plus MiaMed's cash and cash equivalents at closing and less any of MiaMed's unpaid third-party fees and expenses related to the transaction), and (ii) 825,603 shares of the Company's Common Stock. In addition, the Company also agreed to pay up to an additional $83.0 million in connection with the achievement of certain clinical, regulatory and commercial milestones, for a potential aggregate deal value of $89.5 million. In September 2015, the Company acquired Scioderm with cash and stock. As part of the acquisition, the Company paid holders of Scioderm an amount equal to $223.9 million, of which approximately $141.1 million was paid in cash and approximately $82.8 million was paid through the issuance of 5.9 million newly issued shares. Nonqualified Cash Plan The Company's Deferral Plan, (the "Deferral Plan") provides certain key employees and members of the Board of Directors as selected by the Compensation Committee, with an opportunity to defer the receipt of such participant's base salary, bonus and director's fees, as applicable. The Deferral Plan is intended to be a nonqualified deferred compensation plan that complies with the provisions of Section 409A of the Internal Revenue Code of 1986 as amended. The following table summarizes the deferred compensation amounts under the Deferral Plan as of December 31, 2017 and 2016, respectively (in thousands):
|  | Year ended December 31, |
|  | 2017 |  | 2016 |
Deferred compensation investment |  | $ | 2,248 |  | $ | 1,469 |
Deferred compensation liability |  | $ | 2,258 |  | $ | 1,479 |
Investment income |  | $ | 66 |  | $ | 34 |
Unrealized gain |  | $ | 92 |  | $ | 32 |
Deferral Plan investment assets are classified as trading securities and are recorded at fair value with changes in the investments' fair value recognized in AOCI in the period they occur. Deferred compensation liability amounts under the Deferral Plan are included in other long-term liabilities. Equity Incentive Plans The Company's Equity Incentive Plans consist of the Amended and Restated 2007 Equity Incentive Plan (the "Plan") and the 2007 Director Option Plan (the "2007 Director Plan"). The Plan provides for the granting of restricted stock and options to purchase common stock in the Company to employees, advisors and consultants at a price to be determined by the Company's board of directors. The Plan is intended to encourage ownership of stock by employees and consultants of the Company and to provide additional incentives for them to promote the success of the Company's business. The 2007 Director Plan is intended to promote the recruiting and retention of highly qualified eligible directors and strengthen the commonality of interest between directors and stockholders by encouraging ownership of common stock of the Company. Under the provisions of each plan, no option will have a term in excess of 10 years. The Board of Directors, or its committee, is responsible for determining the individuals to be granted options, the number of options each individual will receive, the option price per share, and the exercise period of each option. Options granted pursuant to the Plan generally vest 25% on the first year anniversary date of grant plus an additional 1/48th for each month thereafter and may be exercised in whole or in part for 100% of the shares vested at any time after the date of grant. Options under the 2007 Director Plan may be granted to new directors upon joining the Board and vest in the same manner as options under the Plan. In addition, options are automatically granted to all directors at each annual meeting of stockholders and vest on the date of the annual meeting of stockholders of the Company in the year following the year during which the options were granted. As of December 31, 2017, the Company has reserved up to 7,855,550 shares for issuance under the Plan and the 2007 Director Plan. Stock Option Grants The Company adopted the fair value method of measuring stock-based compensation, using the fair value of each equity award granted. The Company chose the "straight-line" attribution method for allocating compensation costs and recognized the fair value of each stock option on a straight-line basis over the vesting period of the related awards. The Company uses the Black-Scholes option pricing model when estimating the grant date fair value for stock-based awards. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility was based on our historical volatility since our initial public offering in May 2007. Beginning in the third quarter of 2017, the average expected life was determined using our actual historical data versus a "simplified" method used in prior quarters. The "simplified" method of estimating the expected exercise term uses the mid-point between the vesting date and the end of the contractual term. In earlier quarters, we did not have sufficient reliable exercise data to justify a change from the use of the "simplified" method of estimating the expected exercise term of employee stock option grants. The impact from this change was not material. The risk-free interest rate is based on U.S. Treasury, zero-coupon issues with a remaining term equal to the expected life assumed at the date of grant. Forfeitures are estimated based on voluntary termination behavior, as well as a historical analysis of actual option forfeitures. The weighted average assumptions used in the Black-Scholes option pricing model are as follows:
|  | Years Ended December 31, |
|  | 2017 |  | 2016 |  | 2015 |
Expected stock price volatility |  |  | 82.8 | % |  | 81.3 | % |  | 75.9 | %
Risk free interest rate |  |  | 2.0 | % |  | 1.5 | % |  | 1.7 | %
Expected life of options (years) |  |  | 6.18 |  |  | 6.25 |  |  | 6.25 |
Expected annual dividend per share |  | $ | 0.00 |  | $ | 0.00 |  | $ | 0.00 |
The weighted average grant-date fair value per share of options granted during 2017, 2016 and 2015 were $5.09, $5.28 and $7.51, respectively. The following table summarizes information about stock options outstanding:
|  | Number of Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life |  | Aggregate Intrinsic Value |
|  | (in thousands) |  |  |  |  |  | (in millions) |
Options outstanding, December 31, 2014 |  |  | 10,020.7 |  | $ | 5.02 |  |  |  |  |  |
Granted |  |  | 3,917.2 |  | $ | 11.61 |  |  |  |  |  |
Exercised |  |  | (2,070.3 | ) | $ | 5.43 |  |  |  |  |  |
Forfeited |  |  | (138.4 | ) | $ | 7.76 |  |  |  |  |  |
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Options outstanding, December 31, 2015 |  |  | 11,729.2 |  | $ | 7.11 |  |  |  |  |  |
Granted |  |  | 5,114.1 |  | $ | 7.67 |  |  |  |  |  |
Exercised |  |  | (723.1 | ) | $ | 4.20 |  |  |  |  |  |
Forfeited |  |  | (622.7 | ) | $ | 8.62 |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Options outstanding, December 31, 2016 |  |  | 15,497.5 |  | $ | 7.37 |  |  |  |  |  |
Granted |  |  | 3,695.3 |  | $ | 7.17 |  |  |  |  |  |
Exercised |  |  | (2,878.7 | ) | $ | 5.67 |  |  |  |  |  |
Forfeited |  |  | (1,133.0 | ) | $ | 9.55 |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Options outstanding, December 31, 2017 |  |  | 15,181.1 |  | $ | 7.48 |  | 7.2 years |  | $ | 105.8 |
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Vested and unvested expected to vest, December 31, 2017 |  |  | 14,398.5 |  | $ | 7.45 |  | 7.1 years |  | $ | 100.9 |
Exercisable at December 31, 2017 |  |  | 7,985.6 |  | $ | 7.05 |  | 6.0 years |  | $ | 59.1 |
The aggregate intrinsic value of options exercised during the years ended December 31, 2017, 2016 and 2015 was $20.8 million, $2.6 million and $14.7 million respectively. Cash proceeds from stock options exercised during the years ended December 31, 2017, 2016, and 2015 were $16.3 million, $3.0 million, and $11.2 million, respectively. As of December 31, 2017, the total unrecognized compensation cost related to non-vested stock options granted was $31.9 million and is expected to be recognized over a weighted average period of 2.5 years. Restricted Stock Units ("RSUs")and Performance-Based Restricted Stock Units RSUs awarded under the Plan are generally subject to graded vesting and are contingent on an employee's continued service. RSUs are generally subject to forfeiture if employment terminates prior to the release of vesting restrictions. The Company expenses the cost of the RSUs, which is determined to be the fair market value of the shares of Common Stock underlying the RSUs at the date of grant, ratably over the period during which the vesting restrictions lapse. A summary of non-vested RSU activity under the Plan for the year ended December 31, 2017 is as follows:
|  | Number of Share |  | Weighted Average Grant Date Fair Value |  | Weighted Average Remaining Years |  | Aggregate Intrinsic Value |
|  | (in thousands) |  |  |  |  |  | (in millions) |
Non-vested units as of December 31, 2015 |  |  | 478.5 |  | $ | 10.38 |  |  |  |  |  |  |
Granted |  |  | 582.7 |  | $ | 6.21 |  |  |  |  |  |  |
Vested |  |  | (281.9 | ) | $ | 8.73 |  |  |  |  |  |  |
Forfeited |  |  | (34.9 | ) | $ | 7.71 |  |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-vested units as of December 31, 2016 |  |  | 744.4 |  | $ | 7.86 |  |  |  |  |  |  |
Granted |  |  | 2,348.7 |  | $ | 5.69 |  |  |  |  |  |  |
Vested |  |  | (318.2 | ) | $ | 9.23 |  |  |  |  |  |  |
Forfeited |  |  | (199.8 | ) | $ | 6.24 |  |  |  |  |  |  |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Non-vested units as of December 31, 2017 |  |  | 2,575.1 |  | $ | 5.85 |  |  | 2.47 |  | $ | 37.1 |
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On December 30, 2016, the Compensation Committee approved a form of Performance-Based Restricted Stock Unit Award Agreement (the "Performance-Based RSU Agreement"), to be used for performance-based RSUs granted to participants under the Amended and Restated Amicus Therapeutics, Inc. 2007 Equity Incentive Plan, including named executive officers. Certain awards under the form of Performance-Based RSU Agreement were granted in January 2017. The table above includes 401,413 market performance-based restricted stock units ("MPRSUs") granted to executives. Vesting of these awards is contingent upon the Company meeting certain total shareholder return ("TSR") levels as compared to a select peer group over the next three years. The MPRSUs cliff vest at the end of the three-year period and have a maximum potential to vest at 200% (802,826 shares) based on TSR performance. The related share-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized straight-line over the vesting term. The estimated fair value per share of the MPRSUs was $8.08 and was calculated using a Monte Carlo simulation model. The table above also includes 401,413 performance based awards that will vest over the next three years based on the Company achieving certain clinical milestones. For the year ended December 31, 2017, 0.3 million of the RSUs vested and all non-vested units are expected to vest over their normal term. As of December 31, 2017, there was $11.4 million of total unrecognized compensation cost related to unvested RSUs with service-based vesting conditions. These costs are expected to be recognized over a weighted average period of 2.47 years. Compensation Expense Related to Equity Awards The following table summarizes the equity-based compensation expense recognized in the statements of operations (in thousands):
|  | Years Ended December 31, |
|  | 2017 |  | 2016 |  | 2015 |
Equity compensation expense recognized in: |  |  |  |  |  |  |  |  |  |
Research and development expense |  | $ | 10,328 |  | $ | 8,071 |  | $ | 4,600 |
Selling, general and administrative expense |  |  | 12,773 |  |  | 9,433 |  |  | 5,372 |
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Total equity compensation expense |  | $ | 23,101 |  | $ | 17,504 |  | $ | 9,972 |
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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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