Stock-Based Compensation

3 Months Ended

Mar. 31, 2016

6. Stock-Based Compensation

Under the provisions of the Company's 2013 Stock Incentive Plan (2013 Plan), the number of shares of common stock reserved for issuance will automatically increase on January 1 of each year from January 1, 2014 through and including January 1, 2023, by the lesser of (a) 1,960,168 shares, (b) 4.0% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, or (c) the number of shares of common stock determined by the Board of Directors. During the three months ended March 31, 2016, the maximum number of shares of common stock authorized to be issued by the Company under the 2013 Plan was increased to 5,375,064. As of March 31, 2016 there were options to purchase an aggregate of 2,544,391 shares of common stock outstanding at a weighted average exercise price of $26.51 per share under the 2013 Plan.

The following stock-based compensation amounts were recognized for the periods indicated (in thousands):

	Three Months Ended March 31,
	2016			2015
Research and development		$	1,396		$	810
General and administrative			1,605			821
Total stock-based compensation expense		$	3,001		$	1,631

Employee Stock Options

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model using the assumptions in the following table:

	Three Months Ended March 31,
	2016	2015
Expected dividend yield	0%	0%
Expected volatility	64 %	74 %
Risk-free interest rate	1.5% - 2.1%	1.6% - 2.0%
Expected term	6.25 years	6.25 years

The following table summarizes stock option and restricted stock unit (RSU) activity during the three months ended March 31, 2016:

	Shares			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (in thousands)
Outstanding, December 31, 2015		4,146,064		$	16.90		7.4
Granted		110,125			14.42
Exercised		(190,867	)		1.18
Forfeited or expired		(46,598	)		29.07
Outstanding, March 31, 2016		4,018,724			17.44		7.4		$	27,049
As of March 31, 2016:
Exercisable		1,984,117			9.50		5.9			22,670
Vested and expected to vest		3,782,077			17.06		7.3			26,382

The weighted-average grant-date fair value of options granted for the three months ended March 31, 2016 was $12.82. The total intrinsic value of options exercised during the three months ended March 31, 2016 was approximately $4.3 million, and the total cash received for options exercised was approximately $0.2 million. The total fair value of shares vested in the three months ended March 31, 2016 was approximately $2.0 million. As of March 31, 2016, the total unrecognized compensation expense related to non-vested stock options, net of related forfeiture estimates, was approximately $28.1 million, which the Company expects to recognize over a weighted-average period of approximately three years.