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Common Stock and Stock-Based Compensation
9 Months Ended
Sep. 30, 2016
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Common Stock and Stock-Based Compensation

8.

Common Stock and Stock-Based Compensation

Common Stock

In January 2016, the Company’s shelf registration statement on Form S-3 (File No. 333-208625) (the “Shelf Registration Statement”) was declared effective by the SEC. In May and June 2016, the Company issued and sold 4,025,000 shares of common stock at a price of $18.00 per share. The Company received total gross proceeds from the offering of $72.5 million. After deducting underwriting discounts and commissions of $3.0 million and offering expense of $0.5 million, the net proceeds were $69.0 million.

2016 Employment Commencement Incentive Plan

In June 2016, the Company adopted the 2016 Employment Commencement Incentive Plan (the “2016 Plan”). The 2016 Plan is designed to comply with the inducement exemption contained in Nasdaq’s Rule 5635(c)(4), which provides for the grant of non-qualified stock options, restricted stock units, restricted stock awards, performance awards, dividend equivalents, deferred stock awards, deferred stock units, stock payment and stock appreciation rights to a person not previously an employee or director of the Company, or following a bona fide period of non-employment, as an inducement material to the individual’s entering into employment with the Company. The Company reserved for future issuance under the 2016 Plan a total of 1,000,000 shares of its common stock for new employees. The 2016 Plan does not provide for any annual increases in the number of shares available. As of September 30, 2016, there were 307,000 options issued and outstanding under the 2016 Plan.

Stock-Based Compensation

During 2010 and 2011, the Company issued shares of restricted common stock to its founders under our founders’ shares agreements (such shares, the “Founders’ Shares”). As of September 30, 2016, all shares were fully vested and there were no shares subject to repurchase. The Company recognized stock-based compensation expense within its condensed consolidated statement of operations of $0 and $9,000 for the three and nine months ended September 30, 2015, respectively, and recognized no expense in 2016 related to shares of common stock granted pursuant to the Founders’ Shares agreements.

The stock-based compensation expense recorded related to options granted to employees and nonemployees was as follows (in thousands):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Research and development

 

$

4,399

 

 

$

2,146

 

 

$

9,842

 

 

$

5,602

 

General and administrative

 

 

3,871

 

 

 

2,598

 

 

 

9,894

 

 

 

5,936

 

 

 

$

8,270

 

 

$

4,744

 

 

$

19,736

 

 

$

11,538