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Stockholders' Equity | 12 Months Ended
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Dec. 31, 2019
Equity [Abstract] |
Stockholders’ Equity |
9. | Stockholders’ Equity
2017 Common Stock Offerings In January 2017, we sold 14.1 million shares of our common stock at a public offering price of $12.20 per share. We received total net proceeds of $163.7 million (net of $8.8 million in issuance costs) from the sale of the common stock. In December 2017, we sold 9.7 million shares of our common stock at a public offering price of $15.50 per share. We received total net proceeds of $142.6 million (net of $7.4 million in issuance costs) from the sale of the common stock. 2018 Common Stock Offerings In April 2018, we sold 6.9 million shares of our common stock at a public offering price of $26.00 per share. We received total net cash proceeds of $168.7 million (net of $10.7 million in issuance costs) from the sale of the common stock. In June 2018, we sold 5.1 million shares of our common stock at a public offering price of $39.50 per share. We received total net cash proceeds of $194.4 million (net of $5.6 million in issuance costs) from the sale of the common stock. 2019 Common Stock Offerings In October 2019, we sold 9.9 million shares of our common stock at a public offering price of $17.50 per share. We received total net cash proceeds of $162.2 million (net of $10.3 million in issuance costs) from the sale of the common stock. Public Offering Warrants In June 2014, as a component of our public offering, we sold 600,000 pre-funded warrants to purchase shares of our common stock. The pre-funded warrants have an exercise price of $0.01 per share and expire on June 30, 2021. During the year ended December 31, 2017, warrant holders exercised 4,426 warrants under the cashless exercise provision in each such holder’s warrant, which resulted in the net issuance of 4,423 shares of common stock and no net cash proceeds to us. During the year ended December 31, 2019, warrant holders exercised 132,130 warrants, which resulted in the issuance of 132,130 shares for net cash proceeds of $1,321. As of December 31, 2019, 463,444 warrants from the June 2014 public offering remain outstanding. Common Stock Reserved for Future Issuance Shares of our common stock reserved for future issuance as of December 31, 2019 were as follows (in thousands):
|  | Number of |
|  | Shares |
Stock options outstanding |  |  | 16,665 |
Stock options available for grant |  |  | 4,971 |
Employee Stock Purchase Plan |  |  | 370 |
Warrants outstanding |  |  | 508 |
Shares of common stock underlying Convertible Notes outstanding (see Note 8) |  |  | 8,960 |
Total shares reserved for future issuance |  |  | 31,474 |
Employee Stock Purchase Plan In 1997, our stockholders approved our Employee Stock Purchase Plan (“ESPP”) at which time a maximum of 10,000 shares of common stock were available for issuance. In December 2007, May 2009, June 2011, May 2014, May 2015, June 2016, June 2017 and June 2019, our stockholders authorized increases in the number of shares reserved for issuance under the ESPP by 5,000, 10,000, 25,000, 25,000, 100,000, 100,000, 200,000 and 300,000 shares, respectively, for a total of 775,000 shares reserved at December 31, 2019. Under the terms of the ESPP, employees can elect to have up to a maximum of 10% of their base earnings withheld to purchase shares of our common stock. The purchase price of the stock is 85% of the lower of the closing prices for our common stock on either: (i) the first trading day in the enrollment period, as defined in the ESPP, in which the purchase is made, or (ii) the purchase date. The length of the enrollment period is 6 months. Enrollment dates are the first business day of May and November. Under the ESPP, we issued 125,727, 71,499, and 77,283 shares in 2019, 2018 and 2017, respectively. The weighted-average exercise price per share of the purchase rights exercised during 2019, 2018 and 2017 was $16.77, $16.48 and $12.80, respectively. As of December 31, 2019, 404,909 shares of common stock have been issued under the ESPP and 370,091 shares of common stock are available for future issuance. Stock Option Plans We currently have one stock option plan from which we can grant options and restricted stock awards to employees, officers, directors and consultants. In December 2007, the stockholders approved our 2007 Equity Incentive Plan (“2007 Plan”) at which time a maximum of 150,000 shares of common stock were available for grant. In May 2010, June 2011, May 2014, May 2015, June 2016, June 2017 and June 2019, our stockholders approved amendments to our 2007 Plan to increase the maximum number of shares of common stock available for grant by 100,000, 4,500,000, 1,750,000, 4,300,000, 3,000,000, 5,000,000 and 7,000,000 shares of common stock, respectively, resulting in an aggregate of 25,800,000 shares of common stock authorized for issuance as of December 31, 2019. At December 31, 2019, there were 4,971,026 shares available for future grant under the 2007 Plan. Any shares that are issuable on exercise of options granted that expire, are cancelled or that we receive pursuant to a net exercise of options are available for future grant and issuance. In 2014, 2013 and 2012, we granted options to certain employees outside of our stockholder approved stock option plans. All options to purchase our common stock were granted with an exercise price that equals fair market value of the underlying common stock on the grant dates and expire no later than 10 years from the date of grant. The options are exercisable in accordance with vesting schedules that generally provide for them to be fully vested and exercisable 4 years after the date of grant, provided, however, that we have also issued stock options awards that are subject to performance vesting requirements. All stock option grants issued outside of our stockholder approved plans have been registered on Form S-8 with the SEC. The following table summarizes the stock option activity:
|  | Outstanding Options |
|  |  |  |  |  | Weighted- |
|  |  |  |  |  | Average |
|  | Number of |  |  | Exercise |
|  | Shares |  |  | Price |
Balance at December 31, 2016 |  |  | 11,845,376 |  |  | $ | 14.44 |
Granted |  |  | 4,300,621 |  |  | $ | 16.17 |
Exercised |  |  | (1,350,605 | ) |  | $ | 8.49 |
Cancelled |  |  | (1,332,428 | ) |  | $ | 20.06 |
Balance at December 31, 2017 |  |  | 13,462,964 |  |  | $ | 15.03 |
Granted |  |  | 4,052,011 |  |  | $ | 26.83 |
Exercised |  |  | (1,529,509 | ) |  | $ | 11.97 |
Cancelled |  |  | (720,859 | ) |  | $ | 17.98 |
Balance at December 31, 2018 |  |  | 15,264,607 |  |  | $ | 18.33 |
Granted |  |  | 4,933,480 |  |  | $ | 24.21 |
Exercised |  |  | (1,983,221 | ) |  | $ | 11.18 |
Cancelled |  |  | (1,550,226 | ) |  | $ | 23.26 |
Balance at December 31, 2019 |  |  | 16,664,640 |  |  | $ | 20.47 |
For the year ended December 31, 2019, options cancelled (included in the above table) consisted of 1,021,453 options forfeited with a weighted-average exercise price of $20.91 and 528,773 options expired with a weighted-average exercise price of $27.81. As of December 31, 2019, options exercisable have a weighted-average remaining contractual term of 6.3 years. The total intrinsic value of stock option exercises, which is the difference between the exercise price and closing price of our common stock on the date of exercise, during the years ended December 31, 2019 and 2018 was $25.0 million and $31.4 million, respectively. As of December 31, 2019 and 2018, the total intrinsic value of options outstanding and exercisable was $56.3 million and $75.7 million, respectively.
|  | Years Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
|  |  |  |  |  | Weighted- |  |  |  |  |  |  | Weighted- |  |  |  |  |  |  | Weighted- |
|  |  |  |  |  | Average |  |  |  |  |  |  | Average |  |  |  |  |  |  | Average |
|  |  |  |  |  | Exercise |  |  |  |  |  |  | Exercise |  |  |  |  |  |  | Exercise |
|  | Options |  |  | Price |  |  | Options |  |  | Price |  |  | Options |  |  | Price |
Exercisable at end of year |  |  | 7,436,379 |  |  | $ | 17.02 |  |  |  | 6,523,093 |  |  | $ | 14.83 |  |  |  | 5,446,586 |  |  | $ | 13.25 |
Options vested or expected to vest |  |  | 15,962,432 |  |  | $ | 20.31 |  |  |  | 14,449,017 |  |  | $ | 18.11 |  |  |  | 12,854,571 |  |  | $ | 14.98 |
Exercise prices and weighted-average remaining contractual lives for the options outstanding as of December 31, 2019 were:
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Weighted- |
|  |  |  |  |  |  |  | Weighted- |  |  |  |  |  |  |  |  |  |  | Average |
|  |  |  |  |  |  |  | Average |  |  | Weighted- |  |  |  |  |  |  | Exercise |
|  |  |  |  |  |  |  | Remaining |  |  | Average |  |  |  |  |  |  | Price of |
Options |  |  | Range of |  |  | Contractual |  |  | Exercise |  |  | Options |  |  | Options |
Outstanding |  |  | Exercise Prices |  |  | Life (in years) |  |  | Price |  |  | Exercisable |  |  | Exercisable |
| 3,027,881 |  |  | $5.20–$13.00 |  |  |  | 4.97 |  |  | $ | 10.16 |  |  |  | 2,720,921 |  |  | $ | 9.84 |
| 3,834,655 |  |  | $13.05–$17.00 |  |  |  | 7.42 |  |  |  | 16.23 |  |  |  | 2,326,188 |  |  |  | 16.17 |
| 1,623,707 |  |  | $17.05–$24.55 |  |  |  | 8.01 |  |  |  | 20.10 |  |  |  | 704,338 |  |  |  | 20.48 |
| 2,336,151 |  |  |  | $24.97 |  |  |  | 8.93 |  |  |  | 24.97 |  |  |  | 644,066 |  |  |  | 24.97 |
| 3,877,880 |  |  |  | $25.02 |  |  |  | 9.95 |  |  |  | 25.02 |  |  |  | — |  |  |  | — |
| 1,940,366 |  |  | $25.06–$38.75 |  |  |  | 7.58 |  |  |  | 30.48 |  |  |  | 1,032,365 |  |  |  | 30.38 |
| 24,000 |  |  |  | $39.00 |  |  |  | 8.56 |  |  |  | 39.00 |  |  |  | 8,501 |  |  |  | 39.00 |
| 16,664,640 |  |  |  |  |  |  |  | 7.58 |  |  |  | 20.47 |  |  |  | 7,436,379 |  |  |  | 17.02 |
On December 31, 2019, we had reserved 16,664,640 shares of common stock for future issuance on exercise of outstanding options granted under the 2007 Plan, as well as the non-plan grants. Valuation and Expense Information The following table summarizes stock-based compensation expense related to stock-based payment awards granted pursuant to all of our equity compensation arrangements (in thousands):
|  | December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Research and development |  | $ | 19,202 |  |  | $ | 13,689 |  |  | $ | 11,312 |
General and administrative |  |  | 13,564 |  |  |  | 9,630 |  |  |  | 9,469 |
Sales and marketing |  |  | 18,645 |  |  |  | 10,048 |  |  |  | 9,757 |
Total stock-based compensation expense |  | $ | 51,411 |  |  | $ | 33,367 |  |  | $ | 30,538 |
As of December 31, 2019, there was $128.7 million of total unrecognized compensation cost related to non-vested, stock-based payment awards granted under all of our equity compensation plans and all non-plan option grants. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. We expect to recognize this compensation cost over a weighted-average period of 3.0 years. We estimated the fair value of each option grant and ESPP purchase right on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: Options:
|  | December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Risk-free interest rate |  |  | 1.8 | % |  |  | 2.8 | % |  |  | 2.1 | %
Dividend yield |  |  | — | % |  |  | — | % |  |  | — | %
Volatility |  |  | 66.5 | % |  |  | 70.4 | % |  |  | 74.0 | %
Expected life (years) |  |  | 6 |  |  |  | 6 |  |  |  | 6 |
ESPP:
|  | December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Risk-free interest rate |  |  | 1.9 | % |  |  | 2.4 | % |  |  | 1.2 | %
Dividend yield |  |  | — | % |  |  | — | % |  |  | — | %
Volatility |  |  | 52.1 | % |  |  | 59.7 | % |  |  | 50.0 | %
Expected life (months) |  |  | 6 |  |  |  | 6 |  |  |  | 6 |
The weighted-average fair value of options granted was $14.70, $17.24 and $10.61 for the years ended December 31, 2019, 2018 and 2017, respectively. The weighted-average fair value of shares purchased through the ESPP was $5.94, $9.95 and $4.51 for the years ended December 31, 2019, 2018 and 2017, respectively. The risk-free interest rate assumption is based on observed interest rates on U.S. Treasury debt securities with maturities close to the expected term of our employee and director stock options and ESPP purchases. The dividend yield assumption is based on our history and expectation of dividend payouts. We have never paid dividends on our common stock, and we do not anticipate paying dividends in the foreseeable future. We used our historical stock price to estimate volatility. The expected life of employee and director stock options represents the average of the contractual term of the options and the weighted-average vesting period, as permitted under the simplified method. We have elected to use the simplified method, as we do not have enough historical exercise experience to provide a reasonable basis on which to estimate the expected term. The expected life for the ESPP purchase rights is 6 months, which represents the length of each purchase period.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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