Note 8. Stock-Based Compensation

The following table summarizes stock-based compensation expense by financial statement line item in the Company’s condensed consolidated statements of operations for the three and nine months ended December 31, 2017 and 2016:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2017		2016		2017		2016
	(in $000's)				(in $000's)
Cost of product revenue	$	489	$	234	$	1,221	$	754
Research and development		1,673		900		4,217		4,793
Selling, general and administrative		9,070		5,340		23,732		18,974
	$	11,232	$	6,474	$	29,170	$	24,521

Stock Options

The following table summarizes the stock option activity for the nine months ended December 31, 2017:

						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Options			Exercise		Contractual		Value
	(in thousands)			Price		Term (years)		(in thousands)
Outstanding at beginning of period		1,646		$	32.09		5.46
Granted		152			140.41
Exercised		(371	)		20.54
Cancelled and expired		(55	)		100.57
Outstanding at end of period		1,372		$	44.49		5.42	$	196,132
Exercisable at end of period		1,048		$	24.03		4.42	$	171,235
Options vested and expected to vest at end of period		1,347		$	43.85		5.37	$	193,386

The aggregate intrinsic value of options exercised was $46.1 million for the nine months ended December 31, 2017. The total fair value of options that vested during the nine months ended December 31, 2017 was $4.8 million.

The remaining unrecognized stock-based compensation expense for unvested stock option awards at December 31, 2017 was approximately $10.6 million and the estimated weighted-average period over which this cost will be recognized is 2.4 years.

The Company estimates the fair value of each stock option granted at the grant date using the Black-Scholes option valuation model. The weighted average grant-date fair values and weighted average assumptions used in the calculation of fair value of options granted during the three and nine months ended December 31, 2017 and 2016 was as follows:

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
		2017			2016			2017			2016
Weighted average grant-date fair value	$	70.14		$	48.15		$	51.20		$	42.21

Valuation assumptions:
Risk-free interest rate		2.13	%		1.37	%		1.86	%		1.32	%
Expected option life (years)		4.08			4.17			4.07			4.14
Expected volatility		42.2	%		48.5	%		43.6	%		49.5	%

Restricted Stock Units

The following table summarizes activity of restricted stock units for the nine months ended December 31, 2017:

	Number of Shares			Weighted Average Grant Date Fair Value
	(in thousands)			(per share)
Restricted stock units at beginning of period		1,056		$	80.50
Granted		295		$	136.80
Vested		(363	)	$	53.16
Forfeited		(94	)	$	98.08
Restricted stock units at end of period		894		$	108.35

The remaining unrecognized compensation expense for outstanding restricted stock units, including performance and market-based awards, as of December 31, 2017 was $38.5 million and the estimated weighted-average period over which this cost will be recognized is 2.0 years.

Performance-Based Awards

In May 2017, performance-based awards of restricted stock units for the potential issuance of approximately 159,000 shares of common stock were issued to certain executive officers and employees, which vest upon achievement of prescribed service milestones by the award recipients and performance milestones by the Company. As of December 31, 2017, the Company is recognizing compensation expense based on the probable outcome related to the prescribed performance targets on the outstanding awards.