12. Equity Plans and Stock-Based Compensation

Option activity under our stock-based compensation plans during the three months ended March 31, 2018 was as follows (in thousands except per share amounts):

	Shares Underlying Outstanding Options (in thousands)			Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in thousands)
Balance at December 31, 2017		3,555		$	19.56
Options granted		1,807			16.81
Options exercised		(25	)		14.67
Options cancelled:
Options forfeited (unvested)		(2	)		21.00
Options cancelled (vested)		(28	)		50.70
Balance at March 31, 2018		5,307		$	18.47		6.18	$	15,064
Vested and expected to vest at March 31, 2018		5,030		$	18.56		6.12	$	14,156
Exercisable at March 31, 2018		2,462		$	20.55		5.61	$	4,985

Restricted stock unit activity under our stock-based compensation plans during the three months ended March 31, 2018 was as follows (in thousands except per share amounts):

	Number of Shares (In thousands)			Weighted-Average Grant-Date Fair Value
Non-vested as of December 31, 2017		2,443		$	6.01
Granted		433			16.12
Vested		(681	)		5.33
Forfeited		-			-
Non-vested as of March 31, 2018		2,195		$	8.21

The aggregate intrinsic value of the restricted stock units outstanding as of March 31, 2018, based on our stock price on that date, was $43.6 million. Fair value of restricted stock units is determined at the date of grant using our closing stock price.

As of March 31, 2018, approximately 151,000 shares underlying stock options and approximately 14,500 restricted stock unit awards with performance-based vesting criteria were outstanding. Vesting criteria for 11,000 of the awards with performance-based vesting criteria were not probable as of March 31, 2018.

Under our stock-based compensation plans, option awards generally vest over a three or four-year period contingent upon continuous service, and expire seven to ten years from the date of grant (or earlier upon termination of continuous service). The fair value-based measurement of each option is estimated on the date of grant using the Black-Scholes option valuation model.

The fair value-based measurements and weighted-average assumptions used in the calculations of these measurements are as follows:

	Stock Options						Employee Stock Purchase Plan
	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2018			2017			2018			2017
Weighted-average fair value	$	10.84		$	4.31		$	10.39		$	2.34
Risk-free interest rate		2.6	%		2.0	%		2.1	%		0.9	%
Expected life (in years)		4.5			4.5			1.3			1.3
Volatility		0.8			0.9			1.1			1.0

Compensation expense is based on awards ultimately expected to vest and reflects estimated forfeitures. The components of stock-based compensation expense were (in thousands):

	Three Months Ended
	March 31,
	2018		2017
Research and development	$	2,187	$	1,963
Selling, general and administrative		2,589		1,858
Cost of sales - product		23		-
Total	$	4,799	$	3,821

As of March 31, 2018, the total unrecognized compensation cost related to non-vested equity awards including all awards with time-based vesting amounted to $40.1 million, which is expected to be recognized over the remaining weighted-average vesting period of 2.2 years. Additionally, as of March 31, 2018, the total unrecognized compensation cost related to equity awards with performance-based vesting criteria amounted to $1.5 million.

Employee Stock Purchase Plan

The 2014 Employee Stock Purchase Plan, as amended, (the “Purchase Plan”) provides for the purchase of common stock by eligible employees and became effective on May 28, 2014. The purchase price per share is the lesser of (i) 85% of the fair market value of the common stock on the commencement of the offer period (generally, the sixteenth day in February or August) or (ii) 85% of the fair market value of the common stock on the exercise date, which is the last day of a purchase period (generally, the fifteenth day in February or August). For the three months ended March 31, 2018, employees have acquired 57,788 shares of our common stock under the Purchase Plan and 40,439 shares of our common stock remained available for future purchases under the Purchase Plan.