Stock-Based Compensation Arrangements

3 Months Ended

Jan. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation Arrangements

9. STOCK BASED COMPENSATION ARRANGEMENTS

In the three months ended January 31, 2018 and 2017, the Company recorded stock-based compensation expense related to restricted stock awards and stock options as follows (in thousands):

	For the Three Months Ended January 31,
	2018		2017
General and administrative expense:
Continuing operations	$	8,910	$	3,975
Discontinued operations		-		442
		8,910		4,417
Research and development expense:
Continuing operations		2,221		-
Total stock-based compensation expense	$	11,132	$	4,417

A summary of the Company’s employee stock option activity in the three months ended January 31, 2018 is presented below:

	Number of shares			Weighted-Average Exercise Price
Outstanding - October 31, 2017		3,525,530		$	6.34
Granted		1,030,500		$	24.47
Exercised		(10,794	)	$	5.10
Forfeited		(34,167	)	$	18.90
Outstanding - January 31, 2018		4,511,069		$	10.39
Options exercisable - January 31, 2018		1,930,500		$	5.79
Weighted-average fair value of options granted during the period				$	16.57

A summary of the Company’s non-employee stock option activity in the three months ended January 31, 2018 is presented below:

	Number of shares		Weighted-Average Exercise Price
Outstanding - October 31, 2017		293,000	$	19.61
No activity		-	$	-
Outstanding - January 31, 2018		293,000	$	19.61
Options exercisable - January 31, 2018		63,292	$	14.24

Stock options are generally granted to employees or non-employees at exercise prices equal to the fair market value of the Company’s stock at the dates of grant. Stock options generally vest over one to three years and have a term of five to ten years. The total fair value of employee options granted during the three months ended January 31, 2018 was approximately $17.1 million. The intrinsic value of options outstanding at January 31, 2018 was $54.7 million. The intrinsic value of options exercised during the three months ended January 31, 2018 was $141,000. The weighted average remaining contractual term of outstanding and exercisable options at January 31, 2018 was 9.1 years and 8.9 years, respectively. As of January 31, 2018, there was approximately $18.3 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a remaining weighted-average vesting period of 0.8 years.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions for the three months ended January 31, 2018:

Risk free annual interest rate	2.01%-2.65	%
Expected volatility	81.32-85.54	%
Expected life	5.00-6.01
Assumed dividends	None

Restricted stock and restricted stock units activity for employees and non-employees in the fiscal year ended October 31, 2017:

	Number of shares			Weighted-Average Grant-Date Fair Value
Unvested - October 31, 2017		227,132		$	7.83
Granted		102,500		$	23.91
Vested		(97,049	)	$	12.53
Unvested - January 31, 2018		232,583		$	12.95

The total fair value of restricted stock and restricted stock units granted during the three months ended January 31, 2018 was approximately $2.5 million.

The value of restricted stock and restricted stock unit grants is measured based on the fair market value of the Company’s common stock on the date of grant and amortized over the vesting period of, generally, six months to three years. As of January 31, 2018, there was approximately $2.1 million of unrecognized compensation cost related to unvested restricted stock and restricted stock unit awards, which is expected to be recognized over a remaining weighted-average vesting period of 0.5 years.