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Stock-Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Schedule of Weighted Average Assumptions For Employee Stock Option Grants
Compensation cost for stock options granted to employees and directors is based on the grant-date fair value and is recognized over the vesting period of the applicable option on a straight-line basis. Stock-based compensation expense is based on options ultimately expected to vest, and therefore has been reduced for estimated forfeitures. We estimate forfeitures based on our historical experience; separate groups of employees that have similar historical forfeiture behavior are considered separately for expense recognition.
The fair value of each option grant to employees and directors is estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions were applied to employee & director stock option grants during the periods ended:
 
Year Ended December 31,
 
2014
 
2013
 
2012
Estimated weighted-average fair value
$
7.39

 
$
6.87

 
$
7.35

Weighted-average assumptions:
 
 
 
 
 
Expected volatility
73
%
 
88
%
 
86
%
Expected term, in years
5.8

 
5.8

 
5.7

Risk-free interest rate
1.87
%
 
1.66
%
 
0.95
%
Expected dividend yield
—
%
 
—
%
 
—
%

(A)
Expected Volatility. Historically the expected volatility rate used to value stock option grants was based on volatilities of a peer group of similar companies whose share prices were publicly available due to our limited trading history. The peer group was developed based on companies in the pharmaceutical and biotechnology industry in a similar stage of development. As of October 2014, we believe it is appropriate to rely 100% on our own historical realized volatility given our own trading history is roughly equivalent to the average expected term of our options and we do not anticipate future volatility will differ significantly from the past. This change in estimate did not have a material impact on our operating income, net income or earnings per share.
(B)
Expected Term. We elected to utilize the “simplified” method for “plain vanilla” options to determine the expected term of our stock option grants. We will continue to use the simplified method until we have sufficient historical data necessary to provide a reasonable estimate of expected life based on the exercise behavior of our option holders. Under this approach, the weighted-average expected life is presumed to be the average of the vesting term and the contractual term of the option.
(C)
Risk-free Interest Rate. The risk-free interest rate assumption was based on zero-coupon U.S. Treasury instruments that had terms consistent with the expected term of our stock option grants.
(D)
Expected Dividend Yield. We have never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future.
Stock-Based Compensation Expense
Stock-based compensation expense includes amortization of stock options granted to employees and non-employees and has been reported in our Consolidated Statements of Operations and Comprehensive Loss as follows:
 

 
Year Ended December 31,
 
2014
 
2013
 
2012
 
(In thousands)
Research and development
$
4,754

 
$
3,588

 
$
2,191

Selling, general and administrative
4,164

 
2,664

 
2,090

Total stock-based compensation expense
$
8,918

 
$
6,252

 
$
4,281



In connection with the non-employee options, we recognized expense of $289,000, $71,000 and $64,000 during the years ended December 31, 2014, 2013 and 2012, respectively.
Stock Option Activity and Related Information
Stock option activity for all stock plans and related information is as follows: 
 
Options
Outstanding
 
Weighted-
Average
Exercise
Price per
Share
 
Remaining
Contractual Life
(in years)
 
Aggregate
Intrinsic
Value
(In thousands)
Balance at December 31, 2013
6,969,303

 
$
6.38

 
 
 
 
Granted
2,005,850

 
11.72

 
 
 
 
Exercised
(297,303
)
 
6.06

 
 
 
 
Forfeited and expired
(313,381
)
 
10.30

 
 
 
 
Balance at December 31, 2014
8,364,469

 
$
7.52

 
6.99
 
$
144,348

Vested and expected to vest at December 31, 2014
8,047,969

 
$
7.40

 
6.91
 
$
139,877

Exercisable at December 31, 2014
5,166,081

 
$
5.63

 
5.69
 
$
98,949
Stock Options Outstanding and Exercisable
Information about stock options outstanding and exercisable is as follows:
 
 
December 31, 2014
 
 
Options Outstanding 
 
Options Exercisable 
Range of Exercise Price
 
 
Number of
Options 
 
 
Weighted-
Average
Remaining
Contractual
Life (Years) 
 
 
Weighted-
Average
Exercise
Price 
 
 
Number of
Options 
 
 
Weighted-
Average
Exercise
Price 
 
$0.98 - $4.09
 
1,565,934

 
2.09
 
$
1.19

 
1,564,898

 
$
1.19

$4.10 - $8.00
 
2,063,380

 
6.37
 
5.31

 
1,897,969

 
5.29

$8.01- $11.42
 
2,839,321

 
8.27
 
9.80

 
1,425,343

 
9.78

$11.43 - $21.49
 
1,895,834

 
9.79
 
11.76

 
277,871

 
11.61

$0.98 - $21.49
 
8,364,469

 
6.99
 
$
7.52

 
5,166,081

 
$
5.63