Stockholders' Equity

12 Months Ended

Dec. 31, 2014

Stockholders' Equity

5. Stockholders’ Equity

Common Stock and Warrants

At December 31, 2013, the Company has reserved 4,005,174 shares of common stock pursuant to the Plans, as described below. On April 6, 2007, the Company issued warrants to an individual at Scripps to purchase up to 150,000 shares of common stock at $0.01 per share, as discussed in Note 10. The warrants have a seven-year term and are exercisable based on performance criteria as detailed in the warrant agreement during 2014. The warrant expired prior to the performance criteria being achieved.

Stock-Based Compensation

The Company recorded stock-based compensation expense of approximately $1,767,000, $1,060,000 and $1,024,000 for the years ended December 31, 2014, 2013 and 2012, respectively, for share-based awards granted under the Second Amended and Restated 2001 Repligen Corporation Stock Plan (the “2001 Plan”) and the Repligen Corporation 2012 Stock Option and Incentive Plan (the “2012 Plan,” and collectively with the 2001 Plan and the 1992 Repligen Corporation Stock Option Plan, the “Plans”).

The following table presents stock-based compensation expense in the Company’s consolidated statements of operations:

	Years ended December 31,
	2014		2013		2012
Cost of product revenue	$	129,000	$	74,000	$	45,000
Research and development		185,000		97,000		219,000
Selling, general and administrative		1,453,000		889,000		760,000
Total	$	1,767,000	$	1,060,000	$	1,024,000

The 2012 Plan allows for the granting of incentive and nonqualified options to purchase shares of common stock, restricted stock and other equity awards. Incentive options granted to employees under the Plans generally vest over a three to five-year period, with 20%-33% vesting on the first anniversary of the date of grant and the remainder vesting in equal yearly installments thereafter. Nonqualified options issued to non-employee directors and consultants under the Plans generally vest over one year. Options granted under the Plans have a maximum term of ten years from the date of grant and generally, the exercise price of the stock options equals the fair market value of the Company’s common stock on the date of grant. At December 31, 2014, options to purchase 1,225,117 shares were outstanding under the Plans. At December 31, 2014, 2,780,057 shares were available for future grant under the 2012 Plan.

The Company uses the Black-Scholes option pricing model to calculate the fair value of share-based awards on the grant date. The fair value of share-based awards granted during the years ended December 31, 2014, 2013 and 2012 were calculated using the following estimated assumptions:

	2014	2013	2012
Expected term (years)	6.5	6.5	6.5
Volatility	51.00 - 51.71%	51.39% - 53.63%	49.76% - 53.54%
Risk-free interest rate	1.88 - 2.11%	1.09% - 2.08%	0.89% - 1.06%
Expected dividend yield	—	—	—

Information regarding option activity for the year ended December 31, 2014 under the Plans is summarized below:

	Options Outstanding			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Options outstanding at December 31, 2013		1,610,988		$	5.07
Granted		420,698			13.98
Exercised		(700,738	)		4.41
Forfeited/cancelled		(105,831	)		7.49
Options outstanding at December 31, 2014		1,225,117		$	8.31		7.30	$	14,261,197
Options exercisable at December 31, 2014		412,500		$	4.31		4.75	$	6,391,377
Vested and expected to vest at December 31, 2014 (1)		723,010		$	10.40		8.64	$	6,969,962

(1) This represents the number of vested options as of December 31, 2014 plus the number of unvested options expected to vest as of December 31, 2014 based on the unvested outstanding options at December 31, 2014 adjusted for estimated forfeiture rates of 8% for awards granted to non-executive level employees and 3% for awards granted to executive level employees.

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the closing price of the common stock on December 31, 2014 of $19.80 per share and the exercise price of each in-the-money option) that would have been received by the option holders had all option holders exercised their options on December 31, 2014. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2014, 2013 and 2012 was approximately $10,474,833, $3,723,000 and $1,384,000, respectively.

The weighted average grant date fair value of options granted during the years ended December 31, 2014, 2013 and 2012 was $4.41, $4.31 and $3.62, respectively. The total fair value of stock options that vested during the years ended December 31, 2014, 2013 and 2012 was approximately $1,084,000, $991,000 and $931,000, respectively.

As of December 31, 2014, there was $4,143,883 of total unrecognized compensation cost related to unvested share-based awards. This cost is expected to be recognized over a weighted average remaining requisite service period of 3.26 years. The Company expects 723,010 unvested options to vest over the next five years.