Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.19.2
Stockholders' Equity
6 Months Ended
Jun. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stockholders' Equity

9.

Stockholders’ Equity

Our authorized capital stock consists of 520,000,000 shares, all with a par value of $0.0001 per share, of which 500,000,000 shares are designated as common stock and 20,000,000 shares are designated as preferred stock. There were no shares of preferred stock outstanding as of June 30, 2019 and December 31, 2018.

ATM Facility

 

In February 2019, we entered into a sales agreement (the “ATM Facility”) with Cowen and Company, LLC (“Cowen”), which provides for the sale, in our sole discretion, of shares of our common stock, in the aggregate offering price of up to $100.0 million through Cowen, as our sales agent. The issuance and sale of these shares by us pursuant to the ATM Facility are deemed “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), and are registered under the Securities Act. We pay a commission of up to 3.0% of gross sales proceeds of any common stock sold under the ATM Facility.

 

During the three and six months ended June 30, 2019, we sold an aggregate of 359,234 shares of common stock under the ATM Facility, at an average price of $22.18 per share, for gross proceeds of $8.0 million and net proceeds of $7.6 million, after deducting commissions and other offering expenses payable by us. As of June 30, 2019, $92.0 million of common stock remained available to be sold under this facility, subject to certain conditions as specified in the agreement and the expiration of the 60-day lock-up period in relation to the underwritten public offering described in Note 10.

 

Equity Incentive Plans

Under the terms of the 2014 Equity Incentive Plan, as amended (“2014 EIP”), we may grant stock options, restricted stock awards (“RSAs”) and RSUs to employees, directors, consultants and other service providers. RSUs generally vest over four years and typically require settlement by the earlier of seven to ten years from the date of grant or the service termination (or, for RSUs granted prior to February 2014, two years following the service termination date). Stock options are granted at prices no less than 100% of the estimated fair value of the shares on the date of grant as determined by the board of directors, provided, however, that the exercise price of an option granted to a 10% shareholder cannot be less than 110% of the estimated fair value of the shares on the date of grant. Options granted generally vest over four years and expire in seven to ten years. As of June 30, 2019, a total of 12,135,316 shares of common stock were reserved for issuance under the 2014 EIP, of which 4,241,491 shares were available for future grant and 7,893,825 shares were subject to outstanding options and RSUs.

In February 2018, we adopted the 2018 Inducement Plan (“Inducement Plan”), under which we may grant options, stock appreciation rights, RSAs and RSUs to new employees. As of June 30, 2019, 1,223,621 shares of common stock were reserved for issuance under the Inducement Plan, of which 404,172 shares were available for future grant and 819,449 shares were subject to outstanding options and RSUs.

Restricted Stock Units

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 during the six months ended June 30, 2019 and 2018 was $35.17 and $36.69, respectively. As of June 30, 2019, there was $44.6 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 June 30, 2019 was $30.8 million.

 

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

 

 

 

RSUs

 

 

 

Shares

 

 

Weighted

Average

Grant Date Fair Value

 

Unvested as of December 31, 2018

 

 

1,405,460

 

 

$

26.94

 

Granted

 

 

998,567

 

 

$

35.17

 

Forfeited

 

 

(346,327

)

 

$

29.37

 

Vested

 

 

(526,489

)

 

$

23.69

 

Unvested as of June 30, 2019

 

 

1,531,211

 

 

$

32.87

 

Vested and unreleased

 

 

 

 

 

 

 

Outstanding as of June 30, 2019

 

 

1,531,211

 

 

$

32.87

 

 

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 six months ended June 30, 2019, we settled 528,589 shares underlying RSUs, of which 482,714 shares underlying RSUs were net settled by withholding 210,865 shares. The value of the RSUs withheld was $6.7 million, based on the closing price of our common stock on the settlement date. During the six months ended June 30, 2018, we settled 380,034 shares underlying RSUs, of which 233,836 shares underlying RSUs were net settled by withholding 87,954 shares. The value of the RSUs withheld was $3.4 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 and Inducement Plan. The table below also includes the activity relating to options for 275,000 shares of our common stock which were issued in 2017 outside of these plans:

 

 

 

Shares

 

 

Weighted Average

Exercise Price

 

 

Weighted Average

Remaining

Contractual Term

(Years)

 

 

Aggregate Intrinsic

Value

(in thousands)

 

Outstanding as of December 31, 2018

 

 

6,276,999

 

 

$

28.15

 

 

 

 

 

 

 

 

 

Granted

 

 

1,750,825

 

 

 

32.47

 

 

 

 

 

 

 

 

 

Exercised

 

 

(181,664

)

 

 

18.13

 

 

 

 

 

 

 

 

 

Forfeited or expired

 

 

(554,431

)

 

 

33.29

 

 

 

 

 

 

 

 

 

Outstanding as of June 30, 2019

 

 

7,291,729

 

 

$

29.04

 

 

 

5.5

 

 

$

8,693

 

Vested and expected to vest as of

   June 30, 2019

 

 

7,291,729

 

 

$

29.04

 

 

 

5.5

 

 

$

8,693

 

Exercisable as of June 30, 2019

 

 

2,972,192

 

 

$

24.40

 

 

 

3.5

 

 

$

5,697

 

 

Aggregate intrinsic value represents the difference between the closing stock price of our common stock on June 30, 2019 and the exercise price of outstanding, in-the-money options. As of June 30, 2019, there was $82.9 million of unrecognized stock-based compensation expense related to stock options that is expected to be recognized over a weighted average period of 2.9 years.

Options for 181,664 and 622,982 shares of our common stock were exercised during the six months ended June 30, 2019 and 2018, with an intrinsic value of $3.3 million and $11.3 million, respectively. 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:

 

 

Six months ended

June 30, 2019

 

 

Six months ended

June 30, 2018

 

Assumptions:

 

 

 

 

 

 

 

Expected term (years)

 

5.9

 

 

 

4.6

 

Expected volatility

 

77.0

%

 

 

73.5

%

Risk-free interest rate

 

2.3

%

 

 

2.6

%

Expected dividend yield

 

0.0

%

 

 

0.0

%

Fair Value:

 

 

 

 

 

 

 

Weighted-average estimated

   grant date fair value per share

$

21.82

 

 

$

22.79

 

Options granted

 

1,750,825

 

 

 

1,578,750

 

Total estimated grant date fair value

$

38,203,000

 

 

$

35,980,000

 

 

Employee Stock Purchase Plan

 

Our 2014 Employee Stock Purchase Plan (“2014 ESPP”) allows eligible employees to purchase our common stock at 85% of the lower of its fair market value at (i) the beginning of a 12-month offering period, or (ii) at the end of one of the two related 6-month purchase periods. No participant in the 2014 ESPP may purchase shares of common stock valued at more than $25,000 per calendar year. The Company recorded $0.5 million and $0.2 million of expense related to the 2014 ESPP in the six months ended June 30, 2019 and 2018, respectively. 74,439 and 77,100 shares were purchased under the 2014 ESPP during the six months ended June 30, 2019 and 2018, respectively.

 

As of June 30, 2019, there was $1.4 million of unrecognized stock-based compensation expense related to the ESPP that is expected to be recognized by the end of second quarter of 2020.

 

The 2014 ESPP provides for annual increases in the number of shares available for issuance thereunder on the first business day of each fiscal year, beginning with 2015 and ending in 2024, equal to the lower of (i) one percent of the number of shares of our common stock outstanding as of such date, (ii) 230,769 shares of our common stock, or (iii) a lesser number of shares as determined by our board of directors. As of June 30, 2019, there were 1,355,973 shares authorized under the 2014 ESPP.

 

Reserved Shares

The following shares of common stock were reserved for future issuance as of June 30, 2019:

 

 

Total Shares

Reserved

 

2014 Equity Incentive Plan

 

12,135,316

 

2018 Inducement Plan

 

1,223,621

 

2014 Employee Stock Purchase Plan

 

1,067,575

 

Options granted outside the equity plans

 

109,666

 

Total reserved shares of common stock

 

14,536,178

 

 

Stock-based Compensation Expense

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

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

(in thousands)

 

 

(in thousands)

 

Research and development

$

6,672

 

 

$

3,384

 

 

$

12,737

 

 

$

6,316

 

General and administrative

 

8,529

 

 

 

4,614

 

 

 

14,733

 

 

 

8,697

 

Total stock-based compensation expense

$

15,201

 

 

$

7,998

 

 

$

27,470

 

 

$

15,013