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Note 2 - Stock-based Compensation | 6 Months Ended
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Jun. 30, 2019
Notes to Financial Statements |
Share-based Payment Arrangement [Text Block] | Note 2 - Stock-Based Compensation As of June 30, 2019, the Company had three stock-based employee compensation plans, the Amended and Restated Stock Incentive Plan (“Incentive Plan”), the Inducement Equity Incentive Plan (“Inducement Plan”) and the Employee Stock Purchase Plan (“ESPP”). The Incentive Plan was amended and restated in on April 19, 2019 and approved by the Company’s stockholders on May 29, 2019. The Inducement Plan was adopted by the Board of Directors on April 24, 2019. The ESPP was amended and restated in March 2014 and approved by the Company’s stockholders in May 2014. Stock-based compensation expense of $8,702 ( $8,535 of expense related to the Incentive Plan, $16 of expense related to the Inducement Plan and $151 of expense related to the ESPP) was recognized during the first six months of 2019, while $4,987 ( $4,904 of expense related to the Incentive Plan and $83 of expense related to the ESPP) was recognized during the first six months of 2018. There was approximately $29,218 of total unrecognized compensation cost related to non-vested stock option awards granted by the Company as of June 30, 2019. That cost is expected to be recognized as follows: $8,827 during the remainder of 2019, $8,574 in 2020, $6,529 in 2021, $5,103 in 2022 and $185 in 2023. In addition, the Company has outstanding performance-based stock options for which no compensation expense is recognized until “performance” becomes probable. Stock Incentive Plan The Company grants stock option awards and restricted stock unit awards to its employees, directors, and consultants under the Incentive Plan. Under the Incentive Plan, stock option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant. Stock option awards and restricted stock units granted to employees generally vest 25% each year until fully vested after four years. In August 2013 and December 2014, the Company issued 1,032 and 1,250 performance-based stock options, respectively. These awards vest upon successful completion of specific development milestones. As of June 30, 2019, 75% of the August 2013 grants have vested based upon achievement of three milestones and 30% of the December 2014 grants have vested based upon achievement of a single milestone. During the second quarter of 2019, the Company recognized $2.0 million of stock compensation expense related to two milestones within the December 2014 grants for which achievement became probable. Stock option awards granted to non-employee directors of the Company generally vest over one year. All stock option awards have contractual terms of 5 to 10 years. The vesting and exercise provisions of all awards granted under the Incentive Plan are subject to acceleration in the event of certain stockholder-approved transactions, or upon the occurrence of a change in control as defined in the Incentive Plan. Related activity under the Incentive Plan is as follows:
|  | Awards Available |  | Options Outstanding |  | Weighted Average Exercise Price
Balance December 31, 2018 |  |  | 805 |  |  |  | 17,491 |  |  | $ | 6.49 |
Plan amendment |  |  | 4,000 |  |  |  | — |  |  |  | — |
Stock option awards granted |  |  | (826 | ) |  |  | 826 |  |  |  | 6.90 |
Stock option awards exercised |  |  | — |  |  |  | (251 | ) |  |  | 3.75 |
Stock option awards cancelled |  |  | 123 |  |  |  | (123 | ) |  |  | 7.28 |
Balance June 30, 2019 |  |  | 4,102 |  |  |  | 17,943 |  |  | $ | 6.54 |
For stock option awards granted under the Incentive Plan during the first six months of 2019 and 2018, the fair value was estimated on the date of grant using a Black-Scholes option pricing model and the assumptions noted in the table below. The weighted average grant date fair value per share of the awards granted during the first six months of 2019 and 2018 was $4.69 and $4.13, respectively. The fair value of the stock option awards is amortized to expense over the vesting periods using a straight-line expense attribution method. The following table summarizes the key assumptions used by the Company to value the stock option awards granted during the first six months of 2019 and 2018. The expected life is based on the average of the assumption that all outstanding stock option awards will be exercised at full vesting and the assumption that all outstanding stock option awards will be exercised at the midpoint of the current date (if already vested) or at full vesting (if not yet vested) and the full contractual term. The expected volatility represents the historical volatility on the Company’s publicly traded common stock. The Company has assumed no expected dividend yield, as dividends have never been paid to stock or option holders and will not be paid for the foreseeable future. The weighted average risk-free interest rate is the implied yield currently available on zero -coupon government issues with a remaining term equal to the expected term. Inducement Equity Incentive Plan The Company has the ability to grant stock option awards to newly-hired employees as inducements material to each employee entering employment with the Company. Stock option awards granted to newly hired employees generally vest 25% each year until fully vested after four years. Each stock option has a term of 10 years and is subject to the terms and conditions of the Inducement Equity Incentive Plan. The vesting and exercise provisions of all awards granted under the Inducement Equity Incentive Plan are subject to acceleration in the event of certain stockholder-approved transactions, or upon the occurrence of a change in control as defined in the Inducement Equity Incentive Plan. During the six months ended June 30, 2019, the Company’s Board of Directors approved the issuance of 242 options to newly hired employees. The options were granted with an exercise price equal to the Company’s market price on the respective dates of grant. The fair value was estimated on the date of grant using a Black-Scholes option pricing model and the assumptions noted in the table below. The weighted average grant date fair value of these stock option awards was $3.94. The weighted-average exercise price of the inducement grants issued during the six months ended June 30, 2019 was $5.81. Weighted Average Assumptions for Stock Option Awards Granted to Employees and Directors under the Plans
|  | 2019 |  | 2018
Expected Life in Years |  |  | 5.5 |  |  |  | 5.5 |
Expected Volatility |  |  | 81.0 | % |  |  | 82.0 | %
Expected Dividend Yield |  |  | 0.0 | % |  |  | 0.0 | %
Risk-Free Interest Rate |  |  | 2.3 | % |  |  | 2.7 | %
Employee Stock Purchase Plan (“ESPP”) The Company has reserved a total of 1,475 shares of common stock to be purchased under the ESPP, of which 187 shares remain available for purchase at June 30, 2019. Eligible employees may authorize up to 15% of their salary to purchase common stock at the lower of 85% of the beginning or 85% of the ending price during six -month purchase intervals. No more than 3 shares may be purchased by any one employee at the six -month purchase dates and no employee may purchase stock having a fair market value at the commencement date of $25 or more in any one calendar year. The Company issued 47 shares during the first six months of 2019 under the ESPP. Compensation expense for shares purchased under the ESPP related to the purchase discount and the “look-back” option were determined using a Black-Scholes option pricing model.

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