Stock-Based Compensation

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Note 11 — Stock-Based Compensation

We issue stock-based awards from our equity incentive plans, which are more fully described in Note 9. Stock-based compensation expense was recognized as follows (in thousands):

	Year Ended December 31,
	2014		2013		2012
Cost of goods sold	$	1,161	$	1,297	$	1,496
Research and development		7,528		7,910		7,082
General and administrative		8,328		8,501		7,621
Total stock-based compensation	$	17,017	$	17,708	$	16,199

As of December 31, 2014, total unrecognized compensation costs of $51.9 million related to unvested stock-based compensation arrangements are expected to be recognized as expense over a weighted-average period of 2.1 years.

Black-Scholes Assumptions

The following tables list the Black-Scholes option-pricing model assumptions used to calculate the fair value of employee and director stock options.

	Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
Average risk-free interest rate		1.6	%		0.9	%		0.9	%
Dividend yield		0.0	%		0.0	%		0.0	%
Average volatility factor		51.6	%		61.2	%		62.2	%
Average weighted average expected life		5.2 years			5.2 years			5.0 years

The average risk-free interest rate is based on the U.S. treasury yield curve in effect at the time of grant for periods commensurate with the expected life of the stock-based award. We have never paid dividends, nor do we expect to pay dividends in the foreseeable future; therefore, we used a dividend yield of 0.0%. Our estimate of expected volatility is based on the daily historical trading data of our common stock at the time of grant over a historical period commensurate with the expected life of the stock-based award.

For the years ended December 31, 2014, 2013, and 2012, we estimated the weighted-average expected life based on the contractual and vesting terms of the stock options, as well as historic cancellation and exercise data.

Stock-based compensation resulting from our ESPP was not material in the years ended December 31, 2014, 2013, and 2012.

Summary of Stock Option Activity

The table below presents a summary of stock option activity under our equity incentive plans (in thousands, except for price per share and contractual life information):

	Number of Shares			Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Life (in Years)		Aggregate Intrinsic Value(1)
Outstanding at December 31, 2013		20,655		$	9.06
Options granted		7,713			13.96
Options exercised		(4,852	)		9.43
Options forfeited & canceled		(1,521	)		11.89
Outstanding at December 31, 2014		21,995		$	10.50		4.96	$	112,549
Vested and expected to vest at December 31, 2014		21,338		$	10.41		4.89	$	111,071
Exercisable at December 31, 2014		13,007		$	8.90		3.47	$	85,839

(1) Aggregate intrinsic value represents the difference between the exercise price of the option and the closing market price of our common stock on December 31, 2014.

The weighted-average grant-date fair value per share of options granted during the years ended December 31, 2014, 2013, and 2012 was $6.50, $4.95, and $3.92, respectively. The total intrinsic value of options exercised during the years ended December 31, 2014, 2013, and 2012 was $25.9 million, $4.5 million, and $1.9 million, respectively. The estimated fair value of options vested during the years ended December 31, 2014, 2013, and 2012 was $15.2 million, $14.1 million, and $15.7 million, respectively.