Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.8.0.1
Stockholders' Equity
3 Months Ended
Mar. 31, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stockholders' Equity

8.

Stockholders’ Equity

Equity Offering

In January 2018, we completed an underwritten public offering of 7,675,072 shares of common stock at an offering price of $18.25 per share and received net proceeds of $131.4 million, after deducting underwriting discounts and commissions and offering expenses payable by us. Further, in March 2018, we completed an underwritten public offering of 4,928,571 shares of common stock at an offering price of $35.00 per share and received net proceeds of $161.9 million, after deducting underwriting discounts and commissions and offering expenses payable by us.

ATM Facility

 

In March 2017, we entered into a sales agreement (the “ATM Facility”) with Cowen and Company, LLC (“Cowen”) under which we may offer and sell, in our sole discretion, shares of our common stock, having an aggregate offering price of up to $75.0 million through Cowen, as our sales agent. We will pay Cowen a commission of up to 3.0% of the gross sales proceeds of any common stock sold under the ATM Facility. The issuance and sale of these shares by us pursuant to the ATM Facility are deemed “at the market” offerings and are available under the Securities Act of 1933, as amended.

During the three months ended March 31, 2018 and 2017, we did not sell any shares of common stock, under the ATM Facility. As of March 31, 2018, $55.0 million of common stock remained available to be sold under this facility, subject to certain conditions as specified in the agreement.

 

Equity Incentive Plan

Under the terms of the 2014 Equity Incentive Plan (“2014 EIP”), we may grant options, restricted stock awards (“RSAs”) and RSUs to employees, directors, consultants and other service providers. As of March 31, 2018, a total of 11,191,315 shares of common stock were reserved for issuance under the 2014 EIP, of which 4,090,015 shares were available for future grant and 7,101,300 shares were subject to outstanding options and RSUs.

Restricted Stock Units

The following is a summary of RSU activity under our 2014 EIP:

 

 

 

RSUs

 

 

 

Shares

 

 

Weighted

Average

Grant Date Fair Value

 

Unvested as of December 31, 2017

 

 

1,685,000

 

 

$

16.90

 

Granted

 

 

642,487

 

 

$

35.80

 

Forfeited

 

 

(99,257

)

 

$

17.10

 

Vested

 

 

(328,725

)

 

$

15.10

 

Unvested as of March 31, 2018

 

 

1,899,505

 

 

$

23.59

 

Vested and unreleased

 

 

9,970

 

 

 

 

 

Outstanding as of March 31, 2018

 

 

1,909,475

 

 

 

 

 

 

The fair value of RSUs is determined as the closing stock price on the date of grant. The weighted average grant date fair value of RSUs granted was $35.80 and $15.09 for the three months ended March 31, 2018 and 2017, respectively. As of March 31, 2018, there was $39.1 million of unrecognized stock-based compensation expense related to RSUs that is expected to be recognized over a weighted average period of 2.9 years. The aggregate intrinsic value of the RSUs outstanding as of March 31, 2018 was $74.5 million.  

 

Under our RSU net settlement procedures, for most of our employees, we withhold shares at settlement to cover the minimum payroll withholding tax obligations. During the three months ended March 31, 2018, we settled 336,240 RSUs, of which 229,854 RSUs were net settled by withholding 86,359 shares.  The value of the RSUs withheld was $3.4 million, based on the closing price of our common stock on the settlement date. During the three months ended March 31, 2017, we settled 195,957 RSUs, of which 47,017 RSUs were net settled by withholding 20,234 shares.  The value of the RSUs withheld was $0.3 million, based on the closing price of our common stock on the settlement date. The value of RSUs withheld in each period was remitted to the appropriate taxing authorities and has been reflected as a financing activity in our condensed consolidated statements of cash flows.

 

Stock Options

The following is a summary of stock option activity under our 2014 EIP:

 

 

 

Shares

 

 

Weighted Average

Exercise Price

 

 

Weighted Average

Remaining

Contractual Term

(Years)

 

 

Aggregate Intrinsic

Value

(in thousands)

 

Outstanding as of December 31, 2017

 

 

4,954,648

 

 

$

21.46

 

 

 

 

 

 

 

 

 

Granted

 

 

719,950

 

 

 

34.37

 

 

 

 

 

 

 

 

 

Exercised

 

 

(309,497

)

 

 

20.02

 

 

 

 

 

 

 

 

 

Forfeited or expired

 

 

(173,276

)

 

 

32.72

 

 

 

 

 

 

 

 

 

Outstanding as of March 31, 2018

 

 

5,191,825

 

 

$

22.96

 

 

 

5.2

 

 

$

85,253

 

Vested and expected to vest as of

   March 31, 2018

 

 

5,191,825

 

 

$

22.96

 

 

 

5.2

 

 

$

85,253

 

Exercisable as of March 31, 2018

 

 

1,956,920

 

 

$

24.63

 

 

 

3.9

 

 

$

30,000

 

 

Aggregate intrinsic value represents the difference between the closing stock price of our common stock on March 31, 2018 and the exercise price of outstanding, in-the-money options. As of March 31, 2018, there was $38.0 million of unrecognized stock-based compensation expense related to stock options that is expected to be recognized over a weighted average period of 2.8 years.

Options for 309,497 shares of our common stock were exercised during the three months ended March 31, 2018, with an intrinsic value of $4.9 million. No options were exercised during the three months ended March 31, 2017. As we believe it is more likely than not that no stock option related tax benefits will be realized, we do not record any net tax benefits related to exercised options.

 

The fair value of each option issued was estimated at the date of grant using the Black-Scholes valuation model. The following table summarizes the weighted-average assumptions used as inputs to the Black-Scholes model, and resulting weighted-average grant date fair values of stock options granted to employees during the periods indicated:

 

 

Three months ended

March 31, 2018

 

 

 

Three months ended

March 31, 2017

 

Assumptions:

 

 

 

 

 

 

 

 

Expected term (years)

 

4.5

 

 

 

 

4.4

 

Expected volatility

 

74.0

%

 

 

 

69.2

%

Risk-free interest rate

 

2.5

%

 

 

 

1.9

%

Expected dividend yield

 

0.0

%

 

 

 

0.0

%

Fair Value:

 

 

 

 

 

 

 

 

Weighted-average estimated

   grant date fair value per share

$

20.39

 

 

 

$

8.21

 

Options granted

 

719,950

 

 

 

 

155,100

 

Total estimated grant date fair value

$

14,680,000

 

 

 

$

1,273,000

 

 

The estimated fair value of stock options that vested in the three months ended March 31, 2018 and 2017 was $3.3 million and $4.2 million, respectively.

Inducement Plan

In February 2018, we adopted the 2018 Inducement Plan (“2018 IP”), under which we may grant options, stock appreciation rights, RSAs and RSUs to new employees. Shares reserved for issuance under the plan is 1,250,000. As of March 31, 2018, 1,250,000 shares of common stock were reserved for issuance under the 2018 IP. In April 2018, we granted 70,000 options at weighted average exercise price of $36.00 per share and 42,500 RSUs under our 2018 IP.

 

Options Granted Outside the Equity Plans

 

As of March 31, 2018, we granted 275,000 options, at weighted average exercise price of $13.96 per share, outside of our equity plans. These options have terms similar to the options granted under the 2014 EIP. The weighted average grant date fair value of such grants were $2.2 million. No options were granted outside our equity plans during the three months ended March 31, 2018 and 2017. As of March 31, 2018, there was $1.8 million of unrecognized stock-based compensation expense related to options issued outside the 2014 EIP that is expected to be recognized over a weighted average period of 3.3 years. The aggregate intrinsic value of such options as of March 31, 2018 was $6.9 million.

 

Employee Stock Purchase Plan

 

As of March 31, 2018, there were 1,020,438 shares available for purchase under the 2014 Employee Stock Purchase Plan (“2014 ESPP”). The Company recorded $0.1 million and $0.1 million of expense related to the 2014 ESPP in the three months ended March 31, 2018 and 2017, respectively. No shares were purchased under the 2014 ESPP during the three months ended March 31, 2018 and 2017.

Reserved Shares

The following shares of common stock were reserved for future issuance as of March 31, 2018:

 

 

Total Shares

Reserved

 

2014 Equity Incentive Plan

 

11,191,315

 

2018 Inducement Plan

 

1,250,000

 

2014 Employee Stock Purchase Plan

 

1,020,438

 

Options granted outside the equity plans

 

275,000

 

Total reserved shares of common stock

 

13,736,753

 

 

Stock-based Compensation Expense

Total stock-based compensation expense related to all employee and non-employee stock awards was as follows:

 

 

Three months ended March 31,

 

 

2018

 

 

2017

 

 

(in thousands)

 

Research and development

$

2,932

 

 

$

2,141

 

General and administrative

 

4,082

 

 

 

3,206

 

Total stock-based compensation expense

$

7,014

 

 

$

5,347