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Stock-based compensation and warrants
6 Months Ended
Jun. 30, 2015
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock-based compensation and warrants

8. Stock-based compensation and warrants

In January 2015, the number of shares of common stock available for issuance under the 2013 Stock Option and Incentive Plan (“2013 Plan”) was increased by approximately 1.3 million shares as a result of the automatic increase provision of the 2013 Plan. As of June 30, 2015, the total number of shares of common stock available for issuance under the 2013 Plan was approximately 0.9 million.

Stock-based compensation expense

Stock-based compensation expense by award type was as follows (in thousands):

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2015

 

 

 

2014

 

 

 

2015

 

 

 

2014

 

Stock options

$

15,310

 

 

$

2,335

 

 

$

20,065

 

 

$

4,812

 

Restricted stock awards

 

 

 

 

16

 

 

 

 

 

 

31

 

Restricted stock units

 

668

 

 

 

 

 

 

1,285

 

 

 

 

Employee stock purchase plan

 

72

 

 

 

 

 

 

132

 

 

 

 

 

$

16,050

 

 

$

2,351

 

 

$

21,482

 

 

$

4,843

 

 

As of June 30, 2015, the Company had $80.5 million of unrecognized stock-based compensation expense, net of estimated forfeitures, related to unvested stock options, restricted stock units, and the employee stock purchase plan that is expected to be recognized over a weighted-average period of 2.9 years.

On January 29, 2015, the Company entered into a Transitional Services and Separation Agreement with its Chief Scientific Officer, ending his employment with the Company effective July 6, 2015. Subsequent to this separation date, he is serving as a member of the Company’s Scientific Advisory Board. Under the terms of the agreement, outstanding options held by the Chief Scientific Officer were modified. The incremental value of the modification was estimated to be $3.0 million using a Black-Scholes option valuation model, which is being recognized within research and development expense on a straight-line basis through the date of separation. As a result of the modification, the Company recognized $1.8 million and $2.8 million of stock-based compensation expense during the three and six months ended June 30, 2015, respectively.

On April 10, 2015, the Company modified the vesting conditions of a stock option award held by a non-employee founder, which resulted in $6.7 million of stock-based compensation expense recognized to research and development expense during the second quarter of 2015.

 

Restricted stock units

The following table summarizes the restricted stock unit activity under the Company’s equity award plans (shares in thousands):

 

 

Shares

 

 

Weighted-average

grant date

fair value

 

Unvested balance at December 31, 2014

 

179

 

 

$

30.47

 

Granted

 

25

 

 

$

179.30

 

Vested

 

 

 

 

 

Forfeited

 

(1

)

 

$

30.47

 

Unvested balance at June 30, 2015

 

203

 

 

$

48.77

 

 

Stock options

The following table summarizes the stock option activity under the Company’s equity award plans (shares in thousands):

 

 

Shares

 

 

Weighted-average

exercise price

per share

 

Outstanding at December 31, 2014

 

3,652

 

 

$

12.30

 

Granted

 

915

 

 

$

106.87

 

Exercised

 

(671

)

 

$

7.97

 

Canceled or forfeited

 

(43

)

 

$

44.68

 

Outstanding at June 30, 2015

 

3,853

 

 

$

35.15

 

Exercisable at June 30, 2015

 

1,325

 

 

$

7.89

 

Vested and expected to vest at June 30, 2015

 

3,776

 

 

$

35.61

 

 

Options exercisable for approximately 0.7 million shares of common stock were exercised during the six months ended June 30, 2015, resulting in total proceeds to the Company of $5.3 million. In accordance with the Company’s stock option plans, the shares were issued from a pool of shares reserved for issuance under the stock option plans.

Employee stock purchase plan

The Company’s 2013 Employee Stock Purchase Plan (“2013 ESPP”) authorizes the initial issuance of up to a total of 238,000 shares of the Company’s common stock to participating employees. The first offering period under the 2013 ESPP closed on January 31, 2015, resulting in the purchase of 6,780 common shares.  

Warrants

As of June 30, 2015 and December 31, 2014, the Company had 0.2 million warrants outstanding to purchase common stock. During the six months ended June 30, 2015, there were no warrants exercised and no cancellations or expirations.