Quarterly report pursuant to Section 13 or 15(d)

Stock-based Compensation

v2.4.1.9
Stock-based Compensation
 3 Months Ended
Mar. 31, 2015
Stock-based Compensation [Abstract]  
Stock-based Compensation
8.
Stock-based Compensation

In the first quarter of 2015, the Board of Directors of the Company approved grants under the Company’s Long Term Incentive Plan for stock options to purchase an aggregate of 1,322,528 shares and an aggregate of 1,401,652 restricted stock units (“RSUs”) to certain employees of the Company. The stock options vest monthly over four years, and the RSUs vest annually over three years, in equal increments.

The Company recognizes compensation expense for all stock-based payment awards made to the Company’s employees, consultants and directors based on estimated fair values. Compensation expense is recognized from the grant date to the earlier of the retirement-eligible date or the vesting date.  The valuation of stock option awards is determined at the date of grant using the Black-Scholes Model. This model requires inputs such as the expected term of the option, expected volatility and risk-free interest rate. To establish an estimate of expected term, the Company considers the vesting period and contractual period of the award and its historical experience of stock option exercises, post-vesting cancellations and volatility. The estimate of expected volatility is based on the Company’s historical volatility. The risk-free rate is based on the yield available on U.S. Treasury zero-coupon issues. The forfeiture rate impacts the amount of aggregate compensation for both stock options and RSUs. To establish an estimate of forfeiture rate, the Company considers its historical experience of option forfeitures and terminations.
 
The fair value of the stock options granted was estimated based on the following weighted average assumptions for three months ended March 31, 2015 and 2014:

   
Three Months Ended March 31,
  
   
2015
    
2014
  
Dividend yield
    
0
%
    
0
%
Expected volatility
    
82
%
    
94
%
Risk-free interest rate
    
1.34
%
    
1.73
%
Expected term
  
5.6 years
    
5.6 years
  
 
Stock option activity for the three months ended March 31, 2015 was as follows:
 
   
Options
    
Weighted
Average Exercise
Price Per Share
    
Weighted
Average
 Remaining
 Contractual
Life
 (in years)
    
Aggregate
 Intrinsic
Value
 (in thousands)
  
Outstanding at January 1, 2015
    
7,702,309
    
$
8.15
    
   
 
Granted
    
1,322,528
      
3.82
    
   
 
Exercised
    
(65,815
)
    
1.55
    
   
 
Forfeited, expired or cancelled
    
(620,440
)
    
25.65
    
 
    
 
  
Outstanding at March 31, 2015
    
8,338,582
    
$
6.22
      
7.50
    
$
3,174
  
Vested and expected to vest at March 31, 2015
    
7,928,331
    
$
6.30
      
7.41
    
$
3,131
  
Exercisable at March 31, 2015
    
4,621,508
    
$
7.52
      
6.34
    
$
2,409
  

The valuation of RSUs is determined at the date of grant using the closing stock price.

Unvested RSU activity for the three months ended March 31, 2015 is summarized below:

   
Number of
Shares
    
Weighted-
Average Grant-
Date Fair Value
  
Unvested balance at January 1, 2015
    
1,953,879
    
$
5.46
  
Granted
    
1,401,652
      
3.83
  
Vested
    
(802,081
)
    
5.04
  
Forfeited
    
(27,138
)
    
5.88
  
Unvested balance at March 31, 2015
    
2,526,312
    
$
4.69
  

The following table shows allocated stock-based compensation expense included in the condensed consolidated statements of comprehensive loss for the three months ended March 31, 2015 and 2014 (in thousands):

   
Three Months Ended March 31,
  
   
2015
    
2014
  
Research and development
  
$
2,196
    
$
2,406
  
Selling, general and administrative
    
1,469
      
1,518
  
Total stock-based compensation expense
  
$
3,665
    
$
3,924